Go to the Globe and Mail homepage

Jump to main navigationJump to main content

CAW workers picket outside at the Electro-Motive plant in London, Ont., on Friday, feb. 3, 2012 (Mark Spowart/THE CANADIAN PRESS/Mark Spowart/THE CANADIAN PRESS)
CAW workers picket outside at the Electro-Motive plant in London, Ont., on Friday, feb. 3, 2012 (Mark Spowart/THE CANADIAN PRESS/Mark Spowart/THE CANADIAN PRESS)

McGuinty presses Ottawa to review 'outdated' foreign-takeover rules Add to ...

Ontario Premier Dalton McGuinty is calling on Ottawa to review Canada’s foreign takeover rules, following the decision by Caterpillar Inc. to pull up stakes, leaving 450 workers in the province out of a job.

Caterpillar announced on Friday that it is closing operations at its Electro-Motive Canada diesel locomotive factory in London after unionized employees refused to have their pay cut in half in many job categories.

More related to this story

“It’s terrible news for the men and women who work at that plant,” Mr. McGuinty said in a speech on Monday to the Oakville Chamber of Commerce.

Canadians deserve clarity on the rules for foreign takeovers, he said in urging the federal government to review its “outdated” legislation that governs such deals.

“We are eager to compete and succeed in the global economy. But if your intention is to buy an Ontario business so you can shut it down and strip out the jobs and the intellectual property, that’s not on,” Mr. McGuinty said to loud applause. “Canadians deserve a new law.”

The Prime Minister’s Office fired back on Monday, saying the issue fell “entirely within the powers” of the province of Ontario and that the transaction wasn’t reviewable by Ottawa.

“We are disappointed in the company’s decision to close the plant in London, and we sympathize with the workers affected by this decision,” PMO spokeswoman Sara MacIntyre said. “This issue fell entirely within the powers of the McGuinty government. There was no ability for the federal government to intervene.”

Earlier in Question Period, Industry Minister Christian Paradis pointed out that tax breaks for new hires and other federal policies have helped to create a net of 600,000 new jobs since the recession.

Meanwhile, the Canadian Auto Workers said its members may occupy the Caterpillar factory if they are unsatisfied with severance payments offered by the world’s largest maker of construction and mining equipment.

“The CAW has occupied workplaces when employers have shown disrespect,” CAW president Ken Lewenza told Bloomberg. “It’s a tool. It’s an option.”

Caterpillar is the third U.S.-based manufacturer in six months to close a Canadian factory and cut some of the best-paying jobs in Southwestern Ontario. The grim news followed a bitter dispute with workers, who had been locked out of the factory since Jan. 1.

Caterpillar was demanding pay cuts of 50 per cent in many job categories, the elimination of a defined-benefit pension plan, reductions in dental and other benefits and the end of a cost-of-living adjustment. The company said on Friday that it plans to relocate the work to other operations in North and South America.

Earlier this month, Caterpillar posted record annual profits of $4.9-billion (U.S.) for 2011, an 83-per-cent increase from 2010.

Mr. McGuinty noted that Caterpillar had to get the green light from the federal government before it could set up shop in Ontario.

Ottawa pledged to spell out the principles to guide the global business community on takeovers of Canadian companies after it blocked BHP Billiton Ltd.’s proposed takeover of Potash Corp. of Saskatchewan in late 2010.



With reports from Globe and Mail reporter Barrie McKenna in Ottawa and Bloomberg News.

In the know

Most popular videos »

Highlights

More from The Globe and Mail

Most popular