Electro-Motive Canada says it has reached a tentative closeout deal for the "safe and orderly" shutdown of its locomotive manufacturing plant in London, Ont.
The unit of U.S. heavy equipment giant Caterpillar Inc. said Tuesday the deal is subject to a ratification vote Thursday by 465 affected members of the Canadian Auto Workers union.
Details of the agreement, which covers severance, pension and other financial and closing issues, were unavailable.
In the past, Canadian plants that shut down were sometimes picketed by workers who blocked gates and prevented equipment from being moved out until they had negotiated a closeout deal.
Electro-Motive shut down the southwestern Ontario plant this month and is moving the work to a plant in Indiana after locking out the Local 27 CAW hourly workers in a pay dispute.
The company had demanded wage cuts of nearly half and other concessions so the plant could be in line with labour costs at its U.S. and other plants.
The union refused such large concessions and the company locked out the workers Jan. 1. The plant closing led critics to question federal foreign investment rules in Canada.
The shutdown will hit the industrial economy in southwestern Ontario hard and cut another 1,700 spinoff jobs linked to the locomotive plant.
Ontario's manufacturing economy has been battered in recent years from the restructuring of the North American auto sector as well as other blue-collar industries.
While economic power in Canada has shifted to the resource-rich Western provinces, the high dollar and the streamlining at General Motors, Ford and Chrysler have led to the shutdown of several auto and truck plants across southern Ontario, home of Canada's auto sector.
The provincial jobless rate jumped to 8.1 per cent last month, well above the national average.