Showdown at Caterpillar Plant 'Watershed Moment' for North American Labor

Workers at Caterpillar's locomotive plant in London, Ontario, are gaining wide support as the profitable company seeks to cut their pay in half. (Photo: Canadian Auto Workers)

Showdown at Caterpillar Plant 'Watershed Moment' for North American Labor

Canada’s Labor Movement Digs in for ‘PATCO Equivalent,’ as Lockouts Drag On

Caterpillar, Inc. (CAT), the world's largest manufacturer of construction and mining equipment, has brought its well-worn job-crushing efforts to Canada, replicating wage suppression tactics used in the US and cutting benefits of union workers. But as the union fights back and gains support from citizens -- including members of the Occupy movement -- observers wonder if the battle against the internationally known corporation can highlight the 'race to the bottom' when it comes to international labor and cross-border manufacturing.

Mike Elk, writing for In These Times, suggests the battle taking place in London, Ontario coupled with recent developments with lockouts of United Steel Workers in Quebec, could mark a "pivotal moment" for Canada's labor movement. If things go well for CAT, but bad for the embattled Canadian Auto Workers (CAW) Local 27 and the steel workers, it could be the equivalent of "the failed 1981 air traffic controllers union (PATCO) strike that kicked of an era of unionbusting in the United States."

Canada's Labor Movement Digs in for 'PATCO Equivalent,' as Lockouts Drag On

According to Mike Elk:

U.S.-based Caterpillar, which owns the Electro-Motive Diesel locomotive plant through a subsidiary, locked out 420 members of the Canadian Auto Workers Local 27. Despite Caterpillar increasing its profits by 44 percent over the last year, the company is asking union workers to let it cut wages by by as $18.50 an hour (55 percent) in some cases. The company is also asking for the elimination of defined benefits pensions as well as reduction in overtime and vacation plans.

"It's no coincidence in my view that two different companies decided to lock out the two biggest industrial unions in Canada--the Steelworkers and the CAW--on the same day. This looks like an orchestrated attack," said Communication, Energy, and Paperworkers Union President Dave Coles, whose union is in the process of merging with the CAW. "When you have these kind of big gigantic struggles, you don't who is going to win, but by the time this is done, these employer are going to have a goddamn bloody noses. We are not going to allow Canadian employers to kick the shit out of Canadian workers."

Both unions and their supporters are demanding that Canadian Prime Minister Stephen Harper get involved, since these are foreign-owned companies. "Get back to the table, Caterpillar," London, Ontario's Mayor Joe Fontana said at the rally. "Get your ass down here, Prime Minister Harper."

'International in scope'

The fight, according to the report, has implications that go far beyond the battle against US-based Caterpillar or Australia-based mining giant Rio Tinto.

The Caterpillar lockout in particular is international in scope, because the company says that if workers don't agree to cut their wages in half, it will move production to a facility in Muncie, Indiana, where workers are already making less than the $16 an hour at Muncie, Indiana. The Muncie facility is already nonunion and the unions in Indiana faced with a loss of dues from the Indiana's recently passed "Right to Work" law would most likely have a difficult time mustering the resources to organize the plant.

"It's what we have been facing at the bargaining table quite a bit in the private sector in Canada. When we are at bargaining table, they compare what we make to lower wages in U.S. facilities," says CAW Local 27 President Tim Carrie, whose union represents Caterpillar workers in London, Ontario. "President Obama talks a lot about creating goods jobs in America. I hope that his idea isn't taking good-paying jobs from Canada and creating low paying jobs in the U.S. Otherwise, we are going to go to be in a race to the bottom."

In both fights at Caterpillar in Ontario and Rio Tinto, workers are gearing up for a massive fight in their respectively small workplaces that could redefine labor relations not just in Canada, but worldwide.

"Rio Tinto has declared war not only on USW members but on our communities, on Quebec and on Canada," said Quebec Director USW Daniel Roy. "We believe Rio Tinto will use its attacks in Alma to begin a major assault on workers and communities around the globe."

"The lockout with Caterpillar is a watershed moment in Canada, it's our equivalent of the PATCO strike," Carrie says. "When PATCO happened [in 1981] we didn't see an uprising of the labor movement, the silence was almost deafening. If we lose this fight at Caterpillar, other employers will recognize that the labor movement in Canada is weak."


Ontario Caterpillar Workers Locked Out for Refusing Half Pay

Jane Slaughter, writing for Labor Notes, also picks up the CAW story, highlighting the history and current projection of Caterpillar's strategy for battering quality wages and union benefits:

In the mid-1990s the company provoked lengthy strikes at its U.S. facilities in order to break the United Auto Workers' pattern agreement in agricultural implements. Management ran the plants with scabs and workers finally returned with no settlement.

At its UAW-represented locomotive engine plant in Illinois, Cat has already achieved a starting wage of $14 an hour and is now demanding to eliminate cost-of-living increases and raise the price of insurance, as members there work under a contract extension.

The concessions Cat is demanding in London are "an insult to the membership," Scott says. Though the company posted a record profit of $4.9 billion for 2011, with even higher profits predicted this year, it wants $18.50 off the $35-an-hour wage for over half the workforce, to eliminate cost-of-living increases, retiree benefits, and the defined-benefit pension plan, and to hike drug insurance costs. On the day profits were announced CAW picketed 12 Cat dealerships and service centers across the country.

In December the company forecast sales for fiscal 2012 would rise as much as 20 percent.

Union leaders say they're receiving unprecedented community support despite members' relatively high wages. Carrie cites Sisters of St. Joseph serving soup on the picket lines. Occupy London is there. Each week a different local union has hosted a barbeque for locked-out members' families.

In seeking support, Scott says the union highlights the notion of wages cut in half. "If today you're making $20, tomorrow you're making $10," he said. "They can relate to that."


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