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EMD London Workers Ratify Severance Deal

February 23, 2012

The picket line is empty, tents and fires are gone and the fences around the Electro-Motive Diesel, London facility, are coming down.  95% of the unionized workers voted in favour of ratifying a severance deal that would have Caterpillar give them more than the mandated minimum requirement.  Instead of the week of pay for every year of service after 5, they will receive 3 weeks of pay for every year of service, regardless of how many years of service they have, plus a $1,500 severance ‘bonus’. Additionally, the company will provide $350k towards re-training and job search tools and support.

At first, the package appears to favour the workers, as some of the senior employees have been at the plant for over 30 years. And in fact, with this deal, those with under 5 years of service will at least be provided with some severance pay versus none under the minimum requirements. The CAW fought to include this last provision and some feel that Caterpillar acquiesced only to save public face.

Note that not included in the severance package, but tabled by the union, was the offer to complete the locomotives that are currently in various stages of manufacture, still within the facility. As Caterpillar did not take the union up on its offer, it will be bringing in non-unionized workers to complete these units.  The fact that the experienced workers will not have a hand in the last locomotives may be telling. One wonders what the quality of these final units will be like and how long it will take to finish them?

And what is not particularly startling, is that Caterpillar did not refute the allegations that they never had any intention of continuing to operate the plant in London. Allegations that were supported by documentation from the Progress Rail website: “The letter on the Progress Rail website from company president Billy Ainsworth advised employees the London plant was closing and was dated May 23, 2011, more than eight months before the closing was announced.”  Hank Daniszewski, London Free Press, 23 February 2012. It is interesting to note that this letter is not only dated prior to the February 2012 closure announcement, it is also prior to the 2011 contract extension agreement that contained concessions made by the union in order to retain work. Another interesting point is that immediately after it was raised to Caterpillar, the letter was summarily removed from the website.

Doesn’t this prove that Caterpillar’s late December offer of up to 55% wage and/or benefit cuts was a fraud, perpetrated in order to make it look like the CAW was forcing them to close the plant? This puts the seemingly overly generous severance package in the light of a payoff.  What it should provide is a shining example of what the next union that is stomped on by a large corporation should demand. But again, this is little comfort for those who are now without jobs.  A fixed severance package is no replacement for a steady income and stable lifestyle.

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4 Comments leave one →
  1. February 24, 2012 9:35 AM

    Excellent piece. You’re quite right. Progress Rail and CAT had no intention of keeping the London EMD plant open. I cannot understand why the local paper continued reporting the ruse without balancing the lie with some mention of the actions of the two companies revealing their true intent.

    The London EMD workers were treated very shabbily. Now, to see if the La Grange, Indiana EMD workers fair any better.

    • February 25, 2012 12:54 AM

      Thanks for commenting. To those close to the situation, it appeared that Caterpillar’s intentions were obvious but they had been unable to buy EMD until they were put up for sale by Greenbriar. It was well-known that it was the intellectual property they wanted, not the plant or its workforce. I too am interested to see how LaGrange will fair. One can only hope that they receive better treatment.

  2. mark pearce permalink
    March 1, 2012 6:45 PM

    they faired better than the sterling workers in st. thomas. we received 2 weeks wages for every year worked.maybe the americans are a little nicer than the germans

    • March 1, 2012 10:22 PM

      It’s been a tough haul for those in the manufacturing industry in SW Ontario the past few years. It is perhaps more likely that Caterpillar received more public backlash than Sterling did in a similar situation.

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