Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Anna Wittich, left, with sign, and Magdalena Schoenmakers, seated, join locked-out Electro-Motive workers on the picket line Friday in London, Ont. The Caterpillar plant's unionized workers were locked out of the factory Jan. 1, 2012. (Mark Spowart for The Globe and Mail/Mark Spowart for The Globe and Mail)
Anna Wittich, left, with sign, and Magdalena Schoenmakers, seated, join locked-out Electro-Motive workers on the picket line Friday in London, Ont. The Caterpillar plant's unionized workers were locked out of the factory Jan. 1, 2012. (Mark Spowart for The Globe and Mail/Mark Spowart for The Globe and Mail)

Background

Bracing for trouble on the picket line Add to ...

The boss of the world’s largest maker of construction and mining equipment took to the stage at a Washington event last spring and described a business philosophy that could have been ripped from the pages of a bulldozer’s operating manual.

Caterpillar Inc.’s chief executive officer, Douglas Oberhelman, told an audience of mostly smaller business owners and managers, hosted by the U.S. Export-Import Bank, that he believed that to survive, he must approach his competitors like one of his machines would attack a mound of rubble.

More related to this story

“You really have to aim the guns out no matter where you are, whether it is government, private business or whatever institution it is – your school for that matter – and really look at your competitor and beat them because if not, they are going to beat you,” Mr. Oberhelman said.

His philosophy is certainly rewarding Caterpillar shareholders. The Peoria, Ill., firm recorded record sales and profits in the third quarter – payoff from Mr. Oberhelman’s push into fast-growing emerging markets. In December, Caterpillar predicted sales could grow by as much as 20 per cent this year from about $58-billion (U.S.) in 2011.

But Mr. Oberhelman isn’t letting up. He is investing aggressively, hiring thousands of workers and opening or expanding plants in North Carolina, Illinois and California, as well as overseas in India, Indonesia and Russia.

One thing he is not expanding, however, is paycheques for unionized labour. Just ask the more than 450 Canadian Auto Workers union members at Caterpillar subsidiary Electro-Motive Canada in London, Ont. They refused to accept what the union says were demands to slash wages in half, along with reduced pensions and benefits.

So on Sunday, the company locked its workers out. The high-profile confrontation has galvanized Canada’s long-declining labour movement, but is also seen by some as a dark sign of conflict to come at workplaces across the country.

The fight is emblematic of what is expected to be a tough year for union members in both Canada and the United States. It is expected to be the first of many such battles, as companies unnerved by the economic uncertainty in Europe, the stumbling recovery in the United States and the rise of new global competitors in China and elsewhere take a long look at what North American workers are costing them.

Canada’s high dollar has also made workers here more expensive than their U.S. counterparts, never mind those in emerging markets. Persistent unemployment in both countries, plus public-sector layoffs, have also strengthened the hand of employers as contract talks get under way.

Add all that to the long decline of the labour movement in Canada and the U.S., which has seen private-sector membership slide dramatically, and you have the recipe for a disappointing year for workers hoping for some light at the end of the economic tunnel.

Bryon Mott, 28, who tests the mechanical and electrical systems on finished locomotives at the Electro-Motive plant, brought his wife and two-year-old daughter to the picket lines this week. He said the company’s final offer would see his hourly wages slashed from $35 (Canadian) an hour down to $16.50.

“We’ve put off having more children because of this unrest,” Mr. Mott said. “… This is an attack, from a profitable company, on the livelihood of working-class people.”

‘They are going to come tough at us’

In many ways, the tone for this year’s picket-line battles is being set at the top. In the public sector, deficit-laden governments are obviously looking to civil servants for savings and major layoffs. The Conservative government in Ottawa, which showed no qualms about ordering workers at Air Canada and Canada Post back to work last year, is now in talks with unions representing 68,000 federal workers.

Tensions in Toronto between populist conservative Mayor Rob Ford and the city’s combative unions have labour leaders raising the spectre of a management lockout that could paralyze the city and leave managers driving Zambonis at the city’s hockey rinks. In B.C., Nova Scotia, and Ontario hundreds of thousands of health-care workers are either at the table or headed into tough bargaining.

Single page

Follow us on Twitter: @CarmichaelKevin, @jeffreybgray

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories