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Caterpillar shuts down Electro-Motive plant in London, Ont.


February 3, 2012
By The Canadian Press

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American-based heavy equipment maker Caterpillar is closing its locomotive plant in London, Ont., after failing to win a labour agreement with the factory’s 450 workers.

Caterpillar subsidiary Progress Rail Services says the cost structure at the plant was unsustainable.

The company had asked employees to take a 50 percent pay cut to help keep Electro-Motive going, but locked them out January 1 when the Canadian Auto Workers union members rejected the proposal.

Just two days ago, Premier Dalton McGuinty criticized Caterpillar, although not by name, during a speech in London, saying the company was not living up to Ontarians’ expectations.

Prime Minister Stephen Harper had used Electro-Motive as a backdrop in 2008 to promote big tax breaks for industrial capital investments, but the federal government declined to get involved in the labour dispute.

The union has called Caterpillar greedy and immoral after the company reaped record high sales and a profit of nearly $5 billion US last year, and chief executive Doug Oberhelman received a $10.5-million annual paycheque.