London Ontrio Plant Closing

No surprise here.  Asking anyone, union or not, to take a 50% pay cut is ridiculous and unreasonable.  It just shows that Catapiller wanted to get out of Canada.  I guess on the plus side, it looks like jobs are coming back to America (sorry Canada).

The other shoe finally dropped.

So, manufacturing will be in Indiana now?  An easier trip between HQ and the plant....

Should put EMD in a good position to compete with GE on price.  

I have mixed emotions as I have had from the start on this.

It's hard to sympathize with Caterpillar, a company known to play hardball with their employees, but it's nice to see production in the US.

In some sense, you could say this is a delayed fall out from GM.

oltmannd

 

So, manufacturing will be in Indiana now?  An easier trip between HQ and the plant....

 

 

For now.  I'm sure in a few years, we'll be reading about their new plant in Mexico or China, or somewhere else.

Canadian workers "Guess we should have taken that pay cut"

I am at a small shock, but reflecting on t, not at chock anymore!

Maybe with luck EMD will have to rebuild LaGrange...and restore the original location of complete locomotive production!

zugmann

oltmannd:

 

So, manufacturing will be in Indiana now?  An easier trip between HQ and the plant....

 

 

 

 

For now.  I'm sure in a few years, we'll be reading about their new plant in Mexico or China, or somewhere else.

I believe that "China movement" is starting to slow, and soon may be turning  around.  The workers are starting to go after higher wages....and others factors may be beginning to rise.

I have a feeling CAT was going to close the plant anyhow.  The 50% ploy was to direct the attention to the union instead,

Modelcar

 

 

 

I believe that "China movement" is starting to slow, and soon may be turning  around.  The workers are starting to go after higher wages....and others factors may be beginning to rise.

There's still a lot of developing countries left on this country to use.  Unless we win that race to the bottom.

I guess this plant closure marks a milestone...after some  150 years , it is the end of locomotive production in Canada... We had MLW which was sold to Bombardier, which subsequently got out of the locomotive business. And prior to that we had Baldwin/Lima/Fairbanks Morris in Kingston which closed in the 1960s. Not all bad news though, our economy continues to grow albeit slowly, and the many small business that start up every year never make the headlines but have been the greatest creator of jobs.

zugmann

 

oltmannd:

 

 

So, manufacturing will be in Indiana now?  An easier trip between HQ and the plant....

 

 

 

 

 

For now.  I'm sure in a few years, we'll be reading about their new plant in Mexico or China, or somewhere else.

Maybe, not forever.  You are probably too young to remember when Japan was where the cheap labor was.  Now they are the high-priced place...  The bottom is coming up.  Africa is the last stop  (and the Chinese are investing there...)

Ladies and gentlemen...there is another reson as to why their moving their jobs to Indiana

Indiana just became a work union-free state! You don't have to be in a union to work...

C'mon, C'mon guys, moving the plant to Indiana? ?  you better get a seat by the railroad tracks to wave to the train on it's way to Mexico. That was the talk in Ontario 2 years ago.

Except that they just built the plant in Muncie, it's brand new and Caterpiller builds plenty of stuff in the states.

Locomotive production is very unlikely to move to China, the cost of shipping would be too high. Same for South America. Mexico is possible. And of course, Tatans clearly doesn't realize that EMD has sent parts to mexico to build units for years now and will likely continue to do so. In fact, Progress Rail has other facilities in the US that it could build units at as well.

In short, Huge industrial equipment manufacturer doesn't move overseas or even south of the boarder nearly as readily as say an iPad. The odds that a thousand chinese workers will be assembling SD70ACes down the line is really quite unlikely. 

YoHo1975

 

In short, Huge industrial equipment manufacturer doesn't move overseas or even south of the boarder nearly as readily as say an iPad. The odds that a thousand chinese workers will be assembling SD70ACes down the line is really quite unlikely. 

Doesn't GE have a locomotive plant in S. America already?   And with China continuing to grow, there will be a huge demand for new locomotives there for some time to come. Bottom line:  I wouldn't be surprised to see some SD90Aces (or whatever the new models will be) with "Made in China" printed on the bottom.

....Some more comments from Muncie.

For those who might be interested, our local paper www.thestarpress.com has another article about this subject today.  I believe the article can be found at the above address.

Yes, the plant here is in place and P R has been in it now for a year plus.

This plant is large enough to build anything "railroad"....

zugmann

 

YoHo1975:

 

 

In short, Huge industrial equipment manufacturer doesn't move overseas or even south of the boarder nearly as readily as say an iPad. The odds that a thousand chinese workers will be assembling SD70ACes down the line is really quite unlikely. 

 

 

 

 

Doesn't GE have a locomotive plant in S. America already?   And with China continuing to grow, there will be a huge demand for new locomotives there for some time to come. Bottom line:  I wouldn't be surprised to see some SD90Aces (or whatever the new models will be) with "Made in China" printed on the bottom.

 

 

'cept the Chinese will steal your technology and start selling their "own" locomotives here. They have started in New Zealand, and I believe they have at least one order in Australia. They tried but failed for now in Poland.

YoHo1975

Locomotive production is very unlikely to move to China, the cost of shipping would be too high. Same for South America. Mexico is possible.

Don't be so sure about that.  Ever see the massive container cranes they use to unload ships at ports?  Guess where those are built and shipped from.

zugmann

oltmannd:

 

So, manufacturing will be in Indiana now?  An easier trip between HQ and the plant....

 

 

 

 

For now.  I'm sure in a few years, we'll be reading about their new plant in Mexico or China, or somewhere else.

UP has some EMD engines that were assembled in Mexico.  I think it was because of capacity issues up north at the time.  I wouldn't be surprised at all for them to open a Mexican plant to handle the "overflow" from Muncie.  Also to keep there US workforce in line.

Jeff 

jeffhergert

 

zugmann:

 

 

oltmannd:

 

So, manufacturing will be in Indiana now?  An easier trip between HQ and the plant....

 

 

Wouldn't it be more efficient to re-open their LaGrange shops in Illinois,cwhere they already build prime movers and do work on othe rlocomotives, or upgrade their Kentucky remanufacturing location for production of new locomotive? It semms a little silly to build on a new location when they could upgrade locations they have, not only because it could be cheaper (maybe not, though) but it would also keep their facilities close together, which is easy transport from facility to facility, They already have a location in San Luis Porto Si for maintnence of locomotives, so that's another possible upgrade to manufacturing!

 

Maybe it would be a good idea to build a new location on the west coast or east coast since they do build many locomotives for overseas countries like China and Australia.

 

 

For now.  I'm sure in a few years, we'll be reading about their new plant in Mexico or China, or somewhere else.

 

 

UP has some EMD engines that were assembled in Mexico.  I think it was because of capacity issues up north at the time.  I wouldn't be surprised at all for them to open a Mexican plant to handle the "overflow" from Muncie.  Also to keep there US workforce in line.

Jeff 

I have worked for the brotherhood of locomotive engineers, the Teamsters, the boilermakers, and many other unions. I don't understand their logic and believe they are out of touch with reality. They refuse to budge on their pay scale even if it results in the entire plant closing down and everyone losing their jobs.

I understand people don't want to take a pay cut even if it is 50%. But the alternative is no job, and no money. Maybe Unions will start to realize that times have changed, and if they are stubborn and greedy they will end up on the unemployment line with everyone else.

Thomas 9011

I have worked for the brotherhood of locomotive engineers, the Teamsters, the boilermakers, and many other unions. I don't understand their logic and believe they are out of touch with reality. They refuse to budge on their pay scale even if it results in the entire plant closing down and everyone losing their jobs.

I understand people don't want to take a pay cut even if it is 50%. But the alternative is no job, and no money. Maybe Unions will start to realize that times have changed, and if they are stubborn and greedy they will end up on the unemployment line with everyone else.

Thomas 9011,

I don't know and I don't care what you do, but ask yourself, if your boss came to you and said take a "10% pay cut or lose your job", how would you feel? You'd probably feel really shizzy with a "z" and angry.  So you say 10% isn't so bad.  I don't know how much you make but let's say it's $50,000.  A 10% cut is $5,000 less, so now you make $45,000.  Maybe you could live on that.  Now let's pretend you work for Catapiller and you make $50,000 and are asked to take a 50% pay cut.  You're being asked to work for only $25,000 per year.  What if you had a mortgage and kids?  Can you honestly really live on that and be happy that you still have a job with a 50% pay cut?!  It's an insult.  And by the way, yes unions have sometimes been unreasonable for asking for too much or not taking a cut which results in job losses.  But seriously, put yourself in a position where your boss says take a pay cut or take a hike.  It's not fun, it's insulting and it emasculates people, especially if the company is doing just fine.

Based on Caterpillar's financial statements, it looks like they're doing just fine. They're not in bankruptcy or close to it.  I've highlighted some of their key financial indicators below (all $ in billions):

Sales: 2008 - $51.324; 2009 - $32.396; 2010 - $42.588; 2011 - $60.138 <=records sales!

Profit (Sales minus all expenditures/taxes): 2008 - $3.557; 2009 - $0.895; 2010 - $2.700; 2011 - estimated $3.500

Dividends Declared: 2008 - $0.981; 2009 - $1.038; 2010 - $1.103; 2011- estimated $1.153

Source: 2010 Caterpillar Finances; Caterpillar Dividend History; Caterpillar 2011 4Q Results

So getting back to the original question, if you worked at EMD's London plant and management came and told you to take a 50% pay cut or they're closing the plant, how would you feel about that if you knew the company had record sales of $60,138,000,000 and the dividends paid out to shareholders has consistently increased every year since 2003?  Seriously, union or not, would you be open to taking a paying cut if you knew sales and profits are up from the previous year and before the recession?

It's easy to tell someone else to work for less because you don't feel their pain.  It's not painful to you because you're not the one who will either be 1) making 50% less for doing the same work, or 2) making nothing cause management closed the factory and moved elsewhere.  And I'm not saying that pay cuts should never happen, all I'm saying is have a little have a little compassion.  If Caterpillar was in a poor financial position, I would understand the need for pay cuts, but the company is doing fine, so what is the point of the drastic pay cuts?

I don't see where compassion or the lack of it has anything to do with his post.  He wasn't defending Caterpillar nor was he trivializing what these employees are going through or demonstrating a lack of caring.  He was just stating the truth. That doesn't mean he isn't sympathetic. And despite what I'm about to state, my prayers do go out to those affected by this decision and I certainly don't condone what Caterpillar did.

But the cold hard reality of the matter was that it was clearly 50% or nothing. That has been obvious even to the readers at this forum for weeks now. Now they have nothing. I'm sure plenty of those jobs were greater than 50k and that many of those people would've choosen to stay on, even at 50% pay, at least for a while. Now they're at the unemployment line facing a lot less than 50%, part time jobs that are far less than 50% of what they were earning, and no job while they consider their options. And no EMD plant in London after over 60 years that might've been able to grow again in the future and regain some of what they'd of given away. I

Seems like a tall price to pay because the union was insulted. Unions need to learn that things like strikes and contract refusals are only effective when they actually hold some semblance of bargaining power. That said, I don't think EMD had any intentions to keep London going. I think they wanted out and expected the course of events that transpired were going to happen. I think if they had accepted this contract, it would've just served to have delayed the inevitable. So in the long run, I imagine not much was lost by standing their ground, however weak their position was.

Leo_Ames

Unions need to learn that things like strikes and contract refusals are only effective when they actually hold some semblance of bargaining power.  That said, I don't think EMD had any intentions to keep London going. I think they wanted out and expected the course of events that transpired were going to happen. I think if they had accepted this contract, it would've just served to have delayed the inevitable. So in the long run, I imagine not much was lost by standing their ground, however weak their position was.

Hi Leo,

I most definitely agree with you that London was going to close regardless. But what is the point of saying unions need to learn that strikes and contract refusals don't work without bargaining power when in this case learning and accepting management's demands would have resulted in London closing anyway, if not slightly delayed as you have said.  As Mr. Thomas 9011 said: " Maybe Unions will start to realize that times have changed, and if they are stubborn and greedy they will end up on the unemployment line with everyone else."  Again, even if unions did learn not to be stubborn and greedy, the result would have still be the same in this case.  So how does London's closing show that greedy, stubborn, striking unions caused an entire plant to close down when in this case it was pretty much agreed upon that management was going to close down plant regardless of whether their unions caved into their demands or not?  While such accusations may be true in some other cases, I don't believe that pointing out that unions needing to change their ways is a relevant argument in this case.

When corporations have access to any labour market at all it really does not matter whether you have labour unions or not...they will close and move elsewhere. 

No job is safe anymore.

Ulrich

I guess this plant closure marks a milestone...after some  150 years , it is the end of locomotive production in Canada... We had MLW which was sold to Bombardier, which subsequently got out of the locomotive business. And prior to that we had Baldwin/Lima/Fairbanks Morris in Kingston which closed in the 1960s. Not all bad news though, our economy continues to grow albeit slowly, and the many small business that start up every year never make the headlines but have been the greatest creator of jobs.

MLW may not make locomotives in Canada any more but they are a viable loco builder in other parts of the world, not only do they build locomotives but entire transportation systems all over the world, seems Canadians never wanted to buy local made products, Ask calgary and Edmonton.

Even New York bought a massive amount of trains.

.....As for Indiana being a "right to work State", I'd doubt that was a deciding factor to open a Progress Rail plant here.  They did so over a year ago, and at that time RTW issue was not a factor yet in the Legislative body.

At least it certainly was not a "for sure" issue that was to become law.

It was just signed into law about a week ago by Gov. M. Daniels.

From what I am being told the production is going to Indiana , La Grange IL, and Brazil .

tatans

Ulrich:

I guess this plant closure marks a milestone...after some  150 years , it is the end of locomotive production in Canada... We had MLW which was sold to Bombardier, which subsequently got out of the locomotive business. And prior to that we had Baldwin/Lima/Fairbanks Morris in Kingston which closed in the 1960s. Not all bad news though, our economy continues to grow albeit slowly, and the many small business that start up every year never make the headlines but have been the greatest creator of jobs.

 

MLW may not make locomotives in Canada any more but they are a viable loco builder in other parts of the world, not only do they build locomotives but entire transportation systems all over the world, seems Canadians never wanted to buy local made products, Ask calgary and Edmonton.

Even New York bought a massive amount of trains.

True...they build railway equipment..not sure if they still build locomotives anymore though..at least not locomotives as we know them. Maybe they still build them for the highspeed rail, I don't know. About the locally built, wasn't so long ago that every locomotive here was made here. Sd40-2s out of lLondon and their couterparts, M630 and the M636 out of Montreal. 

Thomas 9011

I have worked for the brotherhood of locomotive engineers, the Teamsters, the boilermakers, and many other unions. I don't understand their logic and believe they are out of touch with reality. They refuse to budge on their pay scale even if it results in the entire plant closing down and everyone losing their jobs.

I understand people don't want to take a pay cut even if it is 50%. But the alternative is no job, and no money. Maybe Unions will start to realize that times have changed, and if they are stubborn and greedy they will end up on the unemployment line with everyone else.

The only fault I can see with the unions is that they haven't expanded globally like the large employers have. Had they done so it would be that much more difficult for the CATS of the world to avoid union feedback by simply moving the plants. I for one am glad the workers in London stood their ground. The word NO is a beautiful word. Most will find work elsewhere...contrary to what the media would like to have us believe, losing a job isn't like losing a limb. If you're good at your trade you will be working again soon, and not at Dunkin Donuts wages either. .