Canadian Taxpayers Left Holding the Bag in London Plant Shutdown

OTTAWA, ONTARIO--(Marketwire - Feb. 3, 2012) - The President of the Canadian Labour Congress says the federal government should force Caterpillar Inc. to put its London, Ontario diesel assembly plant up for sale to a Canadian buyer to keep jobs in this country.

Georgetti was commenting on an announcement by the U.S.-based Caterpillar that it will close its Electro-Motive Canada plant rather than negotiate a new contract with 450 workers who the company locked out on January 1st. "This is corporate thuggery and Caterpillar should not be allowed to get away with it," Georgetti says.

In 2010, the federal government approved Caterpillar's purchase of Electro-Motive through its wholly-owned subsidiary Progress Rail Services. The approval came under the Investment Canada Act. "The Investment Canada Act says these sales must be of net benefit to Canada," Georgetti says. "It is of no benefit when Caterpillar buys a plant only to close it down."

Caterpillar recently reported record revenues but the company demanded concessions from its London workers that would have seen their wages reduced by up to 50 per cent. The workers were locked out and now the company has announced that it will close the plant.

In 2008 Electro-Motive benefited from tax measures from the Harper government estimated to be worth $5 million. "Once again Canadian workers and taxpayers are left holding the bag," Georgetti says. "This is a ripoff and Ottawa should demand its money back."

The Canadian Labour Congress, the national voice of the labour movement, represents 3.3 million Canadian workers. The CLC brings together Canada's national and international unions along with the provincial and territorial federations of labour and 130 district labour councils. Website: www.canadianlabour.ca. Follow us on Twitter: @CanadianLabour