Economy Thread

[go_leafs_go02]

Originally Posted by manny_santos

I guess the LFP's What's At Issue piece was the answer. I am glad to see that any media outlet is reporting this, and it is interesting reading the comments. "London Vitali", who I think is the wife of an EMD worker, went as far as telling us that what the workers make is "none of our business". The Free Press is only reporting the facts, and this comment smacks of desperation by the union. I can imagine today that the CAW is royally pissed that their lies have been exposed in the media.



I'm very much on the fence too. Honestly, though, I am a believer that if an unskilled worker wants to make good money in a skilled trade, he or she should go to college - as anyone who reads my posts know I am a big believer in education. As much as I feel badly for my one family member who works for EMD and is locked out, he has nothing past high school and he really should go to college.

I will give him credit though - instead of sitting around complaining like a lot of the other employees who have been posting on the LFP website, he is actively looking for another job.

That London Vitali was responding to me, saying only about 40-50 people get the $34.00/HR.

I'm just peeved that the CAW made everyone buy in and believe that all workers were being offered $16.50 an hour, regardless of who they are. This offer is quite far from the case.

[north 42]

Originally Posted by go_leafs_go02

That London Vitali was responding to me, saying only about 40-50 people get the $34.00/HR.

I'm just peeved that the CAW made everyone buy in and believe that all workers were being offered $16.50 an hour, regardless of who they are. This offer is quite far from the case.

The CAW does not give the facts unless it serves their needs, and when it does, it's just partial info that they can use to manipulate the media.

[manny_santos]

Economically, there is a bright side to this information coming out. Drywall contractors will have some new business to fix walls at the CAW headquarters that have been punched out. Ken Lewenza has a bad enough temper at the best of times.

[MrSlippery519]

Seems to me that the actually skilled trade people/engineer's etc are all getting paid a very fair wage...granted it's still a decrease but it's not that bad. I am shocked that Electromotive was paying a "cleaner of production parts" $34+ an hour.

People in London that do not have jobs currently would be lined up to get $16.50 an hour for that type of job. While I certainly respect those people have a standard of living the fact is they were being grossly over paid.

Will be interesting to see what happens, my company sells a small amount to Electromotive yearly (50-100K) so I certainly hope things get sorted out.

[manny_santos]

Originally Posted by MrSlippery519

People in London that do not have jobs currently would be lined up to get $16.50 an hour for that type of job. While I certainly respect those people have a standard of living the fact is they were being grossly over paid.

You got that right. In my last job, which I was laid off from, I made $11.50/hour. It involved a lot of driving, working outdoors in high heat and humidity, and trying to sell digital communication services door-to-door. There were benefits and overall it was a good job.

Although I'm employed again now, during my unemployment I would have LOVED to make $16.50/hour to clean machine parts.

In my new job, since it is in another country, I make about $5.30 CAD/hour, but because of the cost of living difference, this is actually a very good wage. I only have to work 28.5 hours per month in order to pay for rent for a nice secure place; where I lived briefly in Toronto, which was a seedy basement apartment with no security in an alley in Chinatown, I would have had to work for at least 91 hours per month at minimum wage in order to pay rent. In Toronto, in order to work only 28.5 days per month in order to pay rent, I would have had to have earned almost $33/hour.

This is one of the reasons companies are leaving Canada - the wages employees in Canada require to live comfortably are far greater than in some other parts of the world. And Caterpillar knows it.

[MolsonExport]

Caterpillar is having a mass hiring frenzy in Muncie, Indiana.

Yesterday, announced massive Quarterly profits.

We all know where this is going.

The new economy: a race to the bottom for most, pot of gold for shareholders and upper management.

[manny_santos]

So we finally have heard officially that Caterpillar's EMD division had a loss of $16 million in 2010, although it is not known if this was directly related to the London plant or not. I am disappointed in the London Free Press that it took them 30 days from the start of the lockout to report this, but now is better than never.

EMD is ultimately responsible to Caterpillar. Caterpillar, like any business, is not going to tolerate continued losses from any of its divisions. EMD is not a charity, non-profit organization, or Crown corporation, so Caterpillar cannot be expected to subsidize EMD's losses. EMD has to do something to improve its profitability. They could raise their prices, but that could lead to a revolt from customers. That leaves them forced to cut costs in order to improve their profitability. Because of Canadian economics, the cost of labour is one of the few things international companies are able to control in Canada.

If you were in management at EMD and were told by Caterpillar that you must improve profitability in light of a $16 million loss in 2010, what would you do? Remember, your career is on the line, and your bosses have to answer to shareholders at the annual meeting.

Added 31-Jan: Another problem facing manufacturing in Ontario as a whole is Dalton McGuinty's expensive hydro program, which has rendered energy costs among the highest in North America.

[Wharn]

Originally Posted by manny_santos

Added 31-Jan: Another problem facing manufacturing in Ontario as a whole is Dalton McGuinty's expensive hydro program, which has rendered energy costs among the highest in North America.

I've been mentioning that for a while, but most people brush it off as "irrelevant". I'll bet 3 manufacturing jobs are killed for every "green" job created.

Otherwise, interesting to see EMD's losses, although it would be preferrable if they were broken down between plants. It is possible (however unlikely) that the London plant may not be the main leak, and that there may be other areas where costs can be trimmed.

If I was in the same position as the managers responsible for EMD, I would have made sure the public was crystal clear with what they were planning to do from Day 1 and, more importantly, why they were planning to do it. If Caterpillar had made it concretely understood that EMD was suffering from a loss and that not everyone would be cut to $16.50 per hour, then the Union would have never been able to gain as much sympathy as they did. Instead of rallying beind the workers, the community would have rightly told them "you're dead weight on the company... suck it up and deal with it!" Now, if EMD was even a marginally profitable division and Caterpillar was still seeking these dramatic cuts, it would be a different story. But this is simply not the case.

I'll admit, they had me fooled. For once I thought the Union might actually be in the right... but it looks like they're just being greedy manipulators, once again.

[manny_santos]

Originally Posted by Wharn

If I was in the same position as the managers responsible for EMD, I would have made sure the public was crystal clear with what they were planning to do from Day 1 and, more importantly, why they were planning to do it. If Caterpillar had made it concretely understood that EMD was suffering from a loss and that not everyone would be cut to $16.50 per hour, then the Union would have never been able to gain as much sympathy as they did. Instead of rallying beind the workers, the community would have rightly told them "you're dead weight on the company... suck it up and deal with it!" Now, if EMD was even a marginally profitable division and Caterpillar was still seeking these dramatic cuts, it would be a different story. But this is simply not the case.

I'll admit, they had me fooled. For once I thought the Union might actually be in the right... but it looks like they're just being greedy manipulators, once again.

The PR firm that Caterpillar has been using should be fired, and whoever was responsible for using that firm should be fired. The PR firm has HORRIBLY managed this situation. I really don't think Caterpillar fully appreciates how much they and their PR firm have allowed their reputation to be needlessly damaged, potentially permanently, in the Canadian market. The PR firm had an opportunity to correct the errors that were made in the media in the days leading up to the lockout, but they dropped the ball. I agree that it is not their job to negotiate in the media, but they should be reporting the facts.

All round, this whole thing has come from a dangerous mixture of Caterpillar management doing their jobs as dictated by the shareholders that elected them, the losses being incurred by the EMD division, toxic leadership in the CAW, and supreme incompetency in the outsourced PR firm.

I still wish the Free Press and AM980 would ask more questions rather than simply rallying behind the workers without reporting facts.

[Pimpmasterdac]

Originally Posted by manny_santos

The PR firm that Caterpillar has been using should be fired, and whoever was responsible for using that firm should be fired. The PR firm has HORRIBLY managed this situation. I really don't think Caterpillar fully appreciates how much they and their PR firm have allowed their reputation to be needlessly damaged, potentially permanently, in the Canadian market. The PR firm had an opportunity to correct the errors that were made in the media in the days leading up to the lockout, but they dropped the ball. I agree that it is not their job to negotiate in the media, but they should be reporting the facts.

All round, this whole thing has come from a dangerous mixture of Caterpillar management doing their jobs as dictated by the shareholders that elected them, the losses being incurred by the EMD division, toxic leadership in the CAW, and supreme incompetency in the outsourced PR firm.

I still wish the Free Press and AM980 would ask more questions rather than simply rallying behind the workers without reporting facts.

Caterpillar always wanted to/is conduct negotiations in private, not make a public spectacle out of them. They don't gain anything by going public and making their position about the lack of EMD's profitability and the need to cut. All people will care about is Caterpillar cutting wages, regardless of the rationale.

The CAW on the other-hand has only the public forum to moan and complain about the proposed wage cuts, making a big spectacle that they hope will draw government intervention, via public outcry. Caterpillar could care less what CAW thinks as ultimately its their money that being lost/spent, and if there's no public outcry against Caterpillar, they can lockout the CAW until they come back begging for their jobs. It's not as though individuals buy locomotives, like a GM or a Ford car. CAW knows their goose is cooked and is gonna make this a dirty, nasty affair.

From LFPress, 980 & CTV2, its natural that they will side and rally behind the workers. I doubt it would be good for either of their subscriptions, ratings or advertisement revenues if they sided or provided neutral facts about Caterpillar/EMD position, as they rely blue-collar followers.

Ultimately I don't see CAWs end game. Caterpillar/EMD won't be budging on their offer, take it or leave down south is their mentality. Any hope of forced government intervention is unlikely, and they've dug too deep a hole and they've dug too deep a hole with their membership to rationalize or agree to Caterpillar/EMDs terms. The loss of jobs or wages will weaken the CAW and other unions and bureaucracies that can't even protect wages or job security

[MolsonExport]

any word on the production volumes shifted through the plant over the last few years? If order volumes are down significantly due to a lousy economy, high overhead can be responsible for the divisional/plant losses.

[manny_santos]

Originally Posted by MolsonExport

any word on the production volumes shifted through the plant over the last few years? If order volumes are down significantly due to a lousy economy, high overhead can be responsible for the divisional/plant losses.

I do know from my source in the company that production at the London plant was down in Fiscal 2009, but rebounded in Fiscal 2010.

You're right about high overhead, as there are certain fixed costs that they incur whether they're producing product or not - heating the facility, for example.

[haljackey]

Well, Electro-Motive is no more.

http://www.lfpress.com/news/london/e.../19333691.html

To be honest I'm not surprised. I don't think there's much more to say about it.

[manny_santos]

All I can say is that various media outlets are STILL reporting the lie that all employees were being asked to take a 50% pay cut, and nobody is reporting the losses EMD incurred in Fiscal 2010. Specifically, CBC and Global. I have now contacted CBC twice about their error.

In the end, Ken Lewenza still has a job. And he can now get to work at putting people out of work at another plant, if he can find one. At least CAT was willing to negotiate.

[Wharn]

Originally Posted by manny_santos

In the end, Ken Lewenza still has a job. And he can now get to work at putting people out of work at another plant, if he can find one. At least CAT was willing to negotiate.

"Bob Scott, chairperson CAW Local 27 representing EMD workers, does not regret the tough stand taken by the union, even if it has resulted in the loss of 465 union jobs."

Yeah, I'll be he doesn't regret the tough stance. What this should have read is "Bob Scott doesn't care that his arrogant and stubborn personality cost 465 people their jobs". I'm sure the affected workers would have much rather taken a 50% wage cut instead of a 100% wage cut. If Bob's so convinced that the Union's course of action was correct, then he should also lose his job, just like his fellow comrades.

This is extremely bad. I would not be surprised if this causes well over 1000 additional job losses to Electro-Motive's suppliers. On the plus side, Syncrude is hiring...

[Symz]

Originally Posted by manny_santos

All I can say is that various media outlets are STILL reporting the lie that all employees were being asked to take a 50% pay cut, and nobody is reporting the losses EMD incurred in Fiscal 2010. Specifically, CBC and Global. I have now contacted CBC twice about their error.

In the end, Ken Lewenza still has a job. And he can now get to work at putting people out of work at another plant, if he can find one. At least CAT was willing to negotiate.

I'm sorry to hear the news London. I feel sorry for the people that are now thrown out of work.

To expand on manny's comment on Ken Lewenza, I just thought I'd say that here in Windsor public opinion of the CAW and Lewenza is shifting into a different gear and as of late he and they have been blamed for chasing companies out of Windsor and at the same time effectively deterring them from setting up shop in Windsor. Everyone knows Windsor as a union stronghold, and though not to the same degree as before the reputation still exists. Is it any wonder why Windsor has the highest unemployment in the country @ 10.9% (it has crept back up).

This is a crappy situation all around. 50% wage cuts suck. 465 people out of work sucks (more). It just all around sucks.

[go_leafs_go02]

Did the CAW even try to negotiate with CAT? I seen the final offer from CAT/EMD, but never seen a counter-offer.

[Symz]

Someone made an interesting post on the Windsor Star's article about this plant closing.

C.A.W. = Closed Another Workplace

I still would question whether the company was truly going to bargain in good faith. When me and my fiancee were talking about this about 3 weeks ago she said something interesting. Her company is a logistics company and Electromotive is a customer of theirs, well when I brought up the strike she said 'They're going to move the plant to Indiana' without hesitation, as if people in her company have known for some time about this.

I don't know who to believe, but the workers lose out and it's just really sad.

[haljackey]

Originally Posted by Wharn

Yeah, I'll be he doesn't regret the tough stance. What this should have read is "Bob Scott doesn't care that his arrogant and stubborn personality cost 465 people their jobs". I'm sure the affected workers would have much rather taken a 50% wage cut instead of a 100% wage cut. If Bob's so convinced that the Union's course of action was correct, then he should also lose his job, just like his fellow comrades.

In addition, those who may be able to find work will probably be earning less than 50% of what they made.

Businesses want to make money. When the union/workers are unwilling to make any compromises, I'd be angry too, especially given the circumstances.

It's a free market. Sometimes I wonder if unions realize that this is a capitalist society. Regretting nothing? This was a massive failure on their part, and now you're unwilling to regret it? Give me a break.

Overall the bad situation has become worse. I am now seriously worried about London's economic situation. We've avoided becoming another 'rust belt' city for a long time now but we're starting to become more and more like them.

[Blitz]

In the end, Ken Lewenza still has a job.

Total blowhard. I agree the whole union tide is shifting, in the last election his equally blowhardish son was the only city councillor not to be re-elected. I was in Muncie last summer, wow what a depressed city that is but I'm sure they'll have no problem finding people that will work for those wages.

Overall the bad situation has become worse. I am now seriously worried about London's economic situation. We've avoided becoming another 'rust belt' city for a long time now but we're starting to become more and more like them.

It would be nice if the provincial or federal government would move some government jobs to southwestern Ontario. But no, everything has to stay in either Toronto or Ottawa.