The Electro-Motive Canada (EMC) staff contract expired on December 31, and the workforce has been locked out of the factory since the start of the year. Caterpillar had been seeking wage and benefit concessions from the CAW in return for keeping the plant open.
In a letter to employees, Caterpillar CEO Mr Billy Ainsworth said: "As you know, we compete in a global marketplace where orders for locomotives are won or lost based on extremely competitive pricing and the ability to meet short turnaround times. All facilities within EMC, EMD and Progress Rail Services must achieve and maintain competitive costs, quality and operating flexibility to win in the global marketplace. The London plant, primarily because of an antiquated labour contract, faced serious competitive disadvantages.
"Even though EMC's final offer addressed these competitive disadvantages, the union would not accept our offer. The gulf between the company and the union was simply too wide to resolve. Market conditions made today's regrettable decision unavoidable."
CAW president Mr Ken Lewenza condemned the closure as a "callous move" by the parent company. "Caterpillar had no intention of keeping this plant open," he says. "From day one, we believed that Caterpillar was trying to provoke a crisis, by forcing deep cuts that were not possible. Our members would have happily continued working under the previous conditions, but that wasn't enough for this incredibly profitable company."
Production will now shift to other sites, including Progress Rail's recently-completed $US 50m facility at Muncie, Indiana, which rolled out its first locomotive last November.
