Caterpillar Corporation Takes Its Profits and Runs

Caterpillar showed its true colors this Friday, February 3 by announcing that it is closing its locomotive plant in London, Ontario.

CAW members and others from Niagara and other communities across Ontario rally this January in bid to save jobs at Caterpillar plant. Photo courtesy of Tori Crispo

In an all too familiar strategy, Caterpillar locked out its Canadian Auto Workers on January 1, after  unreasonable demands, including pay cuts of up to 50 per cent, were rejected.

Many Canadians, including Mr. Ken Lewenza, CAW National President, suspected, from the beginning of the lock-out, that this was the company’s not-so hidden agenda. “Caterpillar,” he says,” had no intention of keeping this plant open.”

Adding insult to injury, the company recently boasted profits of 60 per cent for 2011.  This, of course, is little consolation to the workers, their families, or the City OfLondon, which is also reeling from the recent closing of the Ford assembly plant in Talbotford.

This issue speaks to numerous factors which are currently underminingCanadaand her economy.  In 2008, prior to the purchase of EMD by Caterpillar in 2010,Canadaoffered  corporate tax cuts of at least $5 million dollars to EMD, as well as other incentives. Clearly, it was the wrong decision, and the taxpayers are, once again, left holding the bill.  It is also a clear cut example of the truism “privatized profits and public losses”.  Huge corporations are interested in profits rather than community welfare, and they will, as Caterpillar has done, exploit a country for market share and technology, and then leave. 

Sid Ryan, President of the Ontario Federation Of Labour, recently observed,” Good jobs and retirement are being threatened by greedy corporations and every level of government.  If workers don’t start to fight back, decent jobs will become a thing of the past, and the middle class will be decimated.”  The middle class is already decimated.

The hollowing out of the middle class is leaving us with a commodity-obsessed (re. tar sands) economy that features an enriched minority and impoverished majority, third world style.  This is why American workers joined Canadian workers in solidarity at the massive rally and protest on January 21.  They know all too well that it can, and does,  happen to them.

Are there lessons to be learned?  Ontario Economic Development Minister Brad Duguid laid the blame elsewhere. “This is a volatile time in the global economy,” he observed.  The all too common tactic of laying the blame elsewhere does nothing to address the problem. A more productive answer would address the issue of corporate tax cuts, especially since the federal Conservatives are planning to reduce the corporate tax rate yet again, from its current low level of 11.5  to 10 per cent, by July 2013.

Caterpillar shareholders may well rejoice in the performance of their stock, and the ruthlessness of their company, but their short-term gains won’t empowerCanada’s manufacturing sector anytime soon. Today’s “gains” may well be tomorrow’s losses.