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Electro-Motive Canada employee and welder Kelly Gordon in a building called "The Cottage" on the picket line outside the subsidiary of Caterpillar in London on Feb. 8, 2012, that is filled with names and signatures of the workers. (Deborah Baic/The Globe and Mail/Deborah Baic/The Globe and Mail)
Electro-Motive Canada employee and welder Kelly Gordon in a building called "The Cottage" on the picket line outside the subsidiary of Caterpillar in London on Feb. 8, 2012, that is filled with names and signatures of the workers. (Deborah Baic/The Globe and Mail/Deborah Baic/The Globe and Mail)

Manufacturing

In the Electro-Motive shutdown, an unsettling message for Canadian industry Add to ...

Local businesses have already been hit. Around the corner from the shuttered plant, K’s Sports Lounge and Grill is quiet on a Wednesday night but for a few men sitting at the bar. Manager Kay Phouttharath says business is down 20 per cent.

Paul Giannopoulos, owner of James Place Restaurant, a diner that serves breakfast and lunch to people who work nearby, says he’s lost 30 to 40 customers a day since the Caterpillar closure. Frank Rondinelli, president of Charterhouse Auto Body and Collision, says January was the slowest month in 40 years because few people are driving, and fewer still are getting their cars fixed.

Charities have already been affected. Sarah Smith and her husband, Vince Gugliotta, used to donate $100 a month from their paycheques to the United Way. “I never thought I would be using the services that we were lucky enough to be able to contribute to,” she says.

The United Way of London estimates it lost $108,000 as a result of the Electro-Motive closure. The funding has evaporated just as the need for services such as mental-health and financial counselling is growing.

“We’re trying to break cycles of poverty, but as the dollars decrease, so too does our capacity,” says CEO Andrew Lockie.

THE INDUSTRY

Factories were once Canada’s largest source of employment. That has slid, and today the number of people who work in factories hovers near a 30-year low. But it’s still sizable – almost 1.5 million Canadians work in manufacturing, the third-largest employer after the health care and retail sectors.

Last week’s Drummond report on the state of Ontario’s finances minced no words about manufacturing’s role in Ontario. The sector has dwindled as a share of the province’s output and employment base, it said, and this trend will continue as the manufacturing industry is hammered by a strong dollar and uneven U.S. demand.

Statistics help tell the story:

- Factory employment – traditionally a source of high-paying jobs – has faded to just 11.8 per cent of total employment, half the levels they were in 1976.

- Census numbers this month show just how dramatically the country is tilting. Alberta tops the country’s population growth, followed by British Columbia. Ontario’s rate of growth is below the national average for the first time in a quarter of a century.

- London tumbled out of Ontario’s top-10 big city list.

Much talk on the picket line at Electro-Motive Canada centres on Alberta. One former worker left for Fort McMurray last week. Others are contemplating a similar move. For them, the Made-In-Canada era is over.

If Central Canada’s cost advantage is fading, and if corporate taxes have already been cut to below those of the United States, what else can the industry do?

Ontario has the most educated skilled workforce in the world. It is multilingual and multicultural. The best way for it to compete is on quality, investment in new technology and better use of its labour force, says David Wolfe, a University of Toronto professor who specializes in manufacturing.

It may not be the source of well-paying jobs it once was, but manufacturing is hardly fading into the sunset, says London Mayor Joe Fontana, who is witnessing plenty of vibrancy in the food manufacturing, bio-medical and technology industries.

“If we believe as a country you should produce things, and that it’s not just about oil and natural resources, where do you go?” Mr. Fontana says. “You’ve got to go to our manufacturing base.”

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