On Feb. 3, 2012, Caterpillar’s Progress Rail Services unit announced it would cease operations at its Electro-Motive Diesel locomotive assembly plant in London, Ont. Coverage of the news has garnered immense response from Globe readers, with thousands of comments posted on stories since the announcement. This is a story The Globe and Mail will follow as the year unfolds, through the prism of the lives of half a dozen workers affected by the plant’s demise, and the community members who are bracing for the ripples. Follow the story and join the conversation at tgam.ca/manufacturing.
It’s a wintry Wednesday afternoon, and Vince Gugliotta and his son are playing ball hockey. Five-year-old Orlando slaps the ball, and once again it sails high over the fence behind his dad, landing in an inaccessible parking lot beside a battered toy dump truck.
“No high slap shots!” Mr. Gugliotta says. His son smiles. But he knows the balls are not retrievable. They’ve landed in the lot of Caterpillar Inc.’s locomotive factory in London, Ont., a 62-year-old plant the company abruptly closed on Feb. 3.
Mr. Gugliotta, who still drops by the picket line outside the shuttered plant, lost his job as an assembler that day. The worst of it? His wife, Sarah Smith, who also worked in the plant, lost her job too. And just like that, the family with four children between the ages of 1 and 8 slid from solid middle class to no income at all.
The swiftness of the closure has left them reeling. Electro-Motive Canada (a subsidiary owned by Caterpillar ) initially cut its work force last summer. The company then asked its staff for a wage cut of up to 50 per cent. When workers said no, it never returned to the bargaining table, despite entreaties from London’s mayor and the union.
On Jan. 1, the company locked the workers out. On Feb. 3, citing the need to be cost-competitive in a global market, Caterpillar closed the plant for good, putting 700 people out of work.
“No one should be asked to take a 50-per-cent pay cut,” says Mr. Gugliotta. “It’s morally wrong, what they did.”
The family is now scrambling to draw up a survival plan. They’re applying for jobless benefits and drastically cutting costs – clipping coupons, renegotiating bank and car loans, ruling out restaurants and movies for the kids and all extra-curricular activities.
Mr. Gugliotta’s isn’t the only family struggling in the days after the closure. Some older workers thought they were on the cusp of retirement. Others are immigrants who came to Canada for a better life. They volunteer in their community and donate to charity. They bought houses and cars and clothes and paid their taxes. They went out to movies, ate breakfast at the diner before their shift and bought boots at the local workwear shop.
This isn’t just a story about the 700 people who lost their jobs that day. It’s also about the 1,000-plus who will follow because their jobs as truckers and suppliers depended on the plant, and the impact on a community that already has one of the highest jobless rates in Canada.
It’s a story of the harsh side of global competition and its impact on the middle class. It raises unsettling questions about competitiveness in Central Canada and the future prospects of Ontario – the country’s most populous province and home to 40 per cent of its economic activity.
Caterpillar’s is an extreme and brutal example. But it’s also the latest in a string of closures, from AstraZeneca’s research facility in Montreal (132 jobs) to heavy-truck manufacturer Navistar in Chatham, Ont. (1,100 jobs).
The London area has been particularly hard hit: Ford Motor Co. of Canada closed its doors in nearby St. Thomas last year (1,200-plus jobs) while 3M Canada has trimmed its manufacturing work force in London to 235 people from 400 five years ago.
The closures are the result of fierce global competition, automation, and a currency that trades at parity compared with 62 cents to the U.S. dollar a decade ago, obliterating a key cost advantage.