As most of you know, the Canadian Auto Workers union were negotiating to save the jobs at the Caterpillar plant in London, Ontario. Negotiations went so well that Caterpillar shut down the plant and moved the production to Indiana where workers were willing for work for 50% less. Say whatever you want to say about how cruel Caterpillar is, $16.00/hour is a lot better than nothing and that is what those workers are left with in London. 700 jobs lost, a contentious severance package and Caterpillar becomes even more profitable.
Believe it or not, the problem isn’t Caterpillar. Are they evil? Yes. Are profit hungry? Yes. The problem was that only a couple hundred miles away were educated and trained American workers willing to work for half of what workers in London, Ontario are willing to work for and the CAW ignored that fact. Both Obama and Romney are trying to revitalize the American manufacturing sector and this is how it is going to happen. With a decline in demand in many sectors, it means that Ontario is going to be pitted against Indiana and Saskatchewan against Wisconsin. The manufacturing jobs in China aren’t coming back for a very long time if ever and we are going to have to get used to the realities that it is going to come down to jurisdiction against jurisdiction and union local against union local. Those that won’t make concessions or offer subsidies will lose jobs and even if you do, once the subsidies stop, the jobs will move to whoever will give them.
While $16/hour looked repulsive to the local union in London, it looked like a good paying job in Indiana and I have a feeling that is a story we will hear again and again until unions like the CAW understand that no matter how intense their strike, a 50% in wages will attract a lot of companies. It’s the new normal and it is going to happen again and again.