Manufacturing AUTOMATION

Electro-Motive workers ratify closeout deal with Caterpillar

February 23, 2012
By The Canadian Press

About 95 percent of the unionized workers at Electro-Motive Canada have ratified a closeout deal that will allow the orderly shutdown of the U.S.-owned company’s locomotive manufacturing plant in southwestern Ontario.

The London-based company, Progress Rail Services, a unit of heavy equipment giant Caterpillar Inc., had employed about 500 hourly employees at the plant who were represented by the Canadian Auto Workers union.

The employees unanimously backed the deal on severance and pensions negotiated by the union with the company after the announced shutdown three weeks ago.

The closeout deal provides three weeks pay for each year unionized workers have been on the job – a measure that is beyond current provincial labour standards.


The agreement also pays workers ratification bonuses of $1,500 each, and limited company-paid health care benefits, while Progress will complete funding the employees’ pension trust.

As well, Progress will pay the union $350,000 to fund settlement of all grievances, establish an adjustment program and other measures.

The manufacturer said it will issue cheques in the next two weeks and expects individual severance payments will range between a low of $13,000 for workers with three years on the job and high of about $148,000 for employees with 30 years on the job.

“The agreement, which was ratified today by union members, provides a full settlement of all claims and grievances, present, past and future, that the union or any bargaining unit employee may have against the company,” the locomotive maker said in a release.

“While it is regrettable not being able to reach an agreement with the union that would have sustained the London plant, (Electro-Motive) is pleased that the parties were able to successfully negotiate a generous severance agreement for represented employees.”

CAW president Ken Lewenza said the closure and shutdowns of truck, auto parts and other plants in southwestern Ontario have hit the region hard and require an industrial strategy from Ottawa to help the troubled manufacturing sector recover.

Instead, the economy is shifting towards the Western Canadian oil and other resources sectors, propping up a high dollar that is killing manufacturers in central Canada.

“We need to talk about a jobs strategy in manufacturing,” Lewenza told a conference call. “We’re talking only about energy in Alberta.”

The locomotive plant began operations in 1951 and has many employees with decades on the job.

Electro-Motive shut down the plant early this month and is moving the work to a plant in Indiana after locking out the Local 27 CAW hourly workers in a pay dispute.

The company had demanded wage cuts of nearly half and other concessions so the plant could be in line with labour costs at its U.S. and other plants.

The union refused such large concessions and the company locked out the workers on January 1. The plant closure led critics to question federal foreign investment rules in Canada.

The shutdown will hit the industrial economy in southwestern Ontario hard and cut another 1,700 spinoff jobs linked to the locomotive plant.

Ontario’s manufacturing economy has been battered in recent years from the restructuring of the North American auto sector, as well as other blue-collar industries.

While economic power in Canada has shifted to the resource-rich Western provinces, the high dollar and the streamlining at GM, Ford and Chrysler have led to the shutdown of several auto and truck plants across southern Ontario, home of Canada’s auto sector.

The provincial jobless rate jumped to 8.1 percent last month, well above the national average.

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