01/26/2012 08:50 EST | Updated 03/27/2012 05:12 EDT

Electro-Motive Lockout: Unions Take Fight To Caterpillar Customers As Company Posts Record Profits


The union representing workers locked out of a Caterpillar locomotive plant in London, Ont., is taking the fight to Caterpillar’s customers on the day the company posted record profits and revenue.

The Canadian Auto Workers announced Thursday morning they will be picketing in front of a dozen Caterpillar dealerships and service centres in an effort to raise awareness about the nearly month-long lockout of workers at the Electro-Motive plant in London.

Caterpillar reported a 36 per cent increase in after-tax profit for both the fourth quarter of 2011 and the full year 2011. Revenues for the year increased four per cent to $2.65 billion.

Despite the record profits, the company is pressuring its employees at the London locomotive plant to accept a pay cut from $32 per hour to $16.50. Caterpillar locked out the workers on Jan. 1 after union members rejected the pay cut.

"This is all about greed," says Bob Scott, union plant chair at Electro-Motive. "How are workers supposed to go back to earning wages last paid nearly 25 years ago, while the company is richer than ever?"

The CAW notes that the latest compensation package for Caterpillar CEO Doug Oberhelman was worth $10.5 million, “twice what he received the year before.”

The conflict in London is beginning to gain attention, with many observers growing increasingly alarmed about what massive pay cuts at highly profitable companies could mean for the future of the economy.

The conflict “will have ramifications across Ontario’s industrial heartland, which is why all of us — and the politicians who govern us — need to pay close attention,” writes Martin Regg Cohn at the Toronto Star.

“When high-paying skilled local jobs can be shredded at the whim of a combative multinational giant, it dramatically undermines all the upbeat rhetoric we hear from McGuinty and Prime Minister Stephen Harper about Canada’s global appeal. It sends a signal that Ontario is not so much open for business as it is closed for unions.”

The Canadian Auto Workers and the Communications, Energy and Paperworkers union also believe the lockout is about a lot more than 400 jobs in London. The two largest private sector unions in Canada have launched merger talks.

And in a secret report obtained by the Toronto Star, the two labour groups say they risk obsolescence if they don’t reform the way unions operate.

If unions do not change, and quickly, we will steadily follow U.S. unions into continuing decline,” the paper reportedly states. “We must reverse the erosion of our membership, our power and our prestige.”

The paper urges unions to rebrand themselves and to make themselves more relevant to working people in order to regain the support of the general public.

“This improved brand image will be essential for attracting more individual workers to want to join a union,” says the paper.

In a sign of how tense the standoff has become, locked-out Electro-Motive workers this week blocked the movement of a locomotive from the London plant they say was one of the last ones built before they were locked out.

The union thinks the engine was on its way from Stratford to Ingersoll, where it claims it was to be painted. Union members said the painting would have happened in London if they were back at work.

"Caterpillar's made billions of dollars over the years. They're offering us half of our wage scale. And we're not going to let them send our locomotives elsewhere to be built," said CAW plant chairman Bob Scott.

-- with files from CBC