2 February 2012

London Calling: Putting Caterpillar Inc.'s Latest Outrage Into Context

Hot on the heels of an Oxfam study which concluded that income inequality is growing at the same rate in Canada as it is in India, a highly relevant class struggle is currently heating up in the manufacturing city of London, Ontario. There, workers at the Electro-Motive Diesel plant, who are organized with the Canadian Auto Workers (CAW) Local 27, have found themselves drawn into a bitter struggle with multinational machinery giant Caterpillar Inc.

Meet the New Boss

After Electro-Motive was acquired by Progress Rail Services Corporation (a wholly-owned Caterpillar subsidiary) in 2010, the new management drew up plans to drastically decrease workers' income, demanding that wages be cut from $32 an hour to $16.50 - a nearly 50% reduction in pay. After the workers' union rejected the proposed pay cut, the company retaliated by shutting the plant's doors on January 1st, 2012, locking out all the employees and preventing them from working. Since then, the struggle between workers and bosses has intensified, with union members and their allies blocking the movement of locomotives from the plant and picketing outside Caterpillar stores across the country.

Caterpillar's wage cut demands were made to seem all the more outrageous on January 26th, when the company's annual year-end report announced that it had made an after-tax profit of $378 million in 2011 - a 36% increase over the previous year. Caterpillar CEO Doug Oberhelman, for his part, took home a compensation package worth over $10 million - a 50% increase over his previous year's earnings. Electro-Motive union plant chair Bob Scott took issue with the financial discrepancy, wondering aloud: "How are workers supposed to go back to earning wages last paid nearly 25 years ago, while the company is richer than ever?"

No Stranger to Controversy

This is far from the first time that Caterpillar has found itself embroiled in controversy on account of its unethical business practices. The company has been repeatedly cited by Amnesty International for supplying Israel with the bulldozers it uses to destroy Palestinian homes, olive groves, and schools. Caterpillar also built the D9 bulldozer that ran over and killed Rachel Corrie, an American citizen who was protesting against home demolitions in the Gaza Strip, back in 2003.

In December of last year, Toronto-based Caterpillar Tunneling Canada Corporation was fined $130,000 for violating Ontario's Occupational Health and Safety Act. An investigation by the Ministry of Labour found that Caterpillar had failed to follow proper safety protocols, which in turn led to a worker being seriously injured. This fine followed a $66,000 U.S. Department of Labor citation for three safety violations connected to Caterpillar's operations in East Peoria, Illinois.

Tough Times (Unless You're Rich)

The situation at Caterpillar is a particularly poignant example of a much larger conflict. Within those nations which have been so negatively affected by capitalism's most recent crisis, the public has been forced to endure the insulting rhetoric of so-called 'shared sacrifice.' Amidst budget cuts, austerity programs, and the near hollowing-out of the liberal welfare state, we are told by governments and companies alike that it is our duty to tighten our belts, to do with less, and to endure more suffering. That we are being made to suffer the consequences of a problem we did not create is bad enough; far worse, however, is the double standard that's embedded within all this talk about sacrifice. The bosses and politicians speak as if they too will be joining us, but as Oberhelman's $10 million pay day demonstrates, this is non-sense. Of course, we knew that already; we've seen this hypocrisy played out a thousand times before in the course of our daily lives. Caterpillar's most recent attack against its workers is just one more example. Their interests are not our interests.


  1. Update: On February 3rd, Caterpillar announced that they were closing down the Electro-Motive plant. The workers, for their part, have vowed to continue picketing.

  2. And now, a year and a bit later, Caterpillar is closing down "Caterpillar Tunneling Canada Corporation", having stripped that company of all it's intellectual property (CTCC was originally Lovat Inc, a private company which Caterpillar bought in 2008).

  3. I'm so saddened of this news. These greedy persons in Caterpillar should be terminated they don't know how hard their workers earned their money. They are really destroying the company itself. I think case colombia would be affected by this news.