Caterpillar Leaving Canada for Cheaper, Non-Union Labor in US

By Noel Brinkerhoff and David Wallechinsky, AllGov

14 February 12

ob outsourcing is now a two-way street for the United States. Once the victim of companies taking jobs overseas where labor is cheaper, the U.S. is now receiving new employment from an American company that found Canada too expensive for its operations.

Heavy equipment manufacturer Caterpillar Inc. has decided to shut down the 62-year-old Electro-Motive Diesel (EMD) locomotive assembly plant in London, Ontario, and relocate operations to Muncie, Indiana. The move came after a labor dispute erupted between the company and its Canadian unionized workers, who refused to accept a 50% cut in their pay and benefits. Caterpillar purchased EMD in June 2010.

By relocating to Muncie, Caterpillar is expecting to save money by employing non-union employees. In London, the average hourly wage was $34. Down in Muncie, Caterpillar’s outlay will range from $12 an hour for assemblers to $18.50 for maintenance technicians.

Between 2005 and 2010, Caterpillar’s overseas workforce grew by 15,900 employees. During this time period, the company added only 3,400 Americans to its payroll.

Once word got out that Caterpillar was coming to town with 460 new jobs, residents of Muncie applied by the thousands, with some showing up at 4 a.m., five hours in advance, outside the company’s offices.

To Learn More:

Caterpillar Closure Underscores a Growing Export: Canadian Jobs (by Grace Macaluso, Postmedia News)

Progress Rail Grows, Finds No Shortage of Workers (by Rick Yencer, Muncie Free Press)

Corporate Welfare: State Taxpayers Pay to Train Workers for Large Corporations (by Noel Brinkerhoff, AllGov)