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Excerpt: "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."

Caterpillar Inc. said Friday it will close a railroad locomotive assembly plant in Canada, where unionized workers have been locked out since the beginning of the year. (photo: AP)
Caterpillar Inc. said Friday it will close a railroad locomotive assembly plant in Canada, where unionized workers have been locked out since the beginning of the year. (photo: AP)



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)

 

Comments   

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+18 # gilda92 2012-02-14 23:12
What you neglected to say: (Reuters) - "Caterpillar Inc reported a 58 percent rise in quarterly earnings that blew away Wall Street expectations on record sales of construction and mining equipment, and projected strong growth for 2012."
It's unlikely Muncie's workers will profit from Caterpillar's rise in earnings anymore than London earners did.
 
 
+9 # MidwestTom 2012-02-14 23:14
As the dollar slowly falls we will see more and more of this. The flip side is that as the dollar falls Americans will be able to afford fewer and fewer imported items. Will effect is already appearing with many items made in China. Literally all of the tools sold at Harbor Freight are 10 to 20% higher than one year ago.
 
 
+14 # cadan 2012-02-15 00:05
I think the huge wage reduction was the goal of globalization all along, from decades ago.

Basically we have to compete with everybody in the world for a job, so our wages sink just as far as possible.

But it is utterly impossible for us to force the big bosses into competition---c an you conveniently shop or open a bank account in (e.g.) India or China?

However, we shouldn't have to be forced into competition with each other. We should just end globalization. Sharing information around the globe is great, as is travel and friendship. But i think for jobs and manufacturing, these should all be local so that the local people (such as us) have them under control. If this requires tariffs, then so be it.
 
 
+11 # Progressive Patriot 2012-02-15 00:41
So they close down the plants in the US and move out of the country, then a few years later they come back and open another plant, where they don't have to pay union labor.
 
 
+7 # Majikman 2012-02-15 12:21
or move to the South. That was the trick used beginning in the 60's (if memory serves) when the Northeast lost most of its textile mfg. to the South with its cheap labor. We have states competing against states for which one has the cheapest labor pool and least taxes. We have created our own race to the bottom. A whole new meaning to a country divided cannot stand.
 
 
+5 # RLF 2012-02-15 06:27
I thought the unions were called international brotherhoods. Time to organize Muncie...but then maybe the republicans living in Muncie are only worth $12.50 an hour. This is how unions will be reborn...it will really piss off the workers when they find this out.
 
 
+9 # Billy Bob 2012-02-15 08:20
HA! HA! Third World!!!

WE BEAT YOU TO IT THIS TIME!!!

TAKE THAT MEXICO!!!

HOO-HAA

USA! USA! USA! USA!

note: sarcasm
 
 
+2 # Kootenay Coyote 2012-02-15 09:44
CDN PM Harper has no concept of sovereignty: anything to Canada’s advantage or use goes, so long as his corporate masters profit thereby: cf. Keystone XL & Northern Gateway, or the brainless F-35 purchase
 
 
-11 # lnason@umassd.edu 2012-02-15 13:08
Halving the labor costs means that more product can be sold which benefits both consumers and new workers who would be able to get more jobs building CAT products.

Staying in Ontario would make the product costly enough to deter sales, employment growth, and the benefits to consumers.

And I think it rather unfair to pay Canadian workers twice the salary of American workers doing the same job.

One can sympathize with the union workers in Ontario who were laid off due to the intransigent demands of their union, but I am sure the good people of Muncie will be happy to take these "slave wages".

Lee Nason
New Bedford, Massachusetts
 
 
+5 # PaineRad 2012-02-15 14:33
It does not mean anything of the sort.

It does mean that Caterpillar is once again playing the role of corporatist/fascist/predator.

I apologize to all wildlife predators for abusing their name; they don't prey on their own species. Caterpillar, like many other irresponsible corporations, deserves a descriptor far worse than anything that applies to nature.

Vampire might be a better descriptor.
 
 
+5 # Billy Bob 2012-02-15 17:15
Couldn't your job, as a maintenence supervisor be done for less than you're currently making too?

Don't say that's off limits or below the belt, or too personal, because that's exactly what you're doing right now, to all of those factory workers.
 
 
+6 # PaineRad 2012-02-15 14:27
That means one other thing -- Cat will NOT be offering health insurance benefits.
 

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