Boycott Caterpillar?

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Published on Friday, 10 February 2012 09:55

Written by David Fowler

The shutdown of the Caterpillar locomotive plant in London has been heavy on my thoughts this past week as it raises so many issues:

465 workers lost their jobs
That’s 465 families affected in an economy where good paying manufacturing jobs are hard to come by.  What’s happening to manufacturing jobs in this country?  All reports suggest it is struggling to say the least these last few years.  The middle class is seemingly getting the squeeze, and that’s a shame since the middle class is a critical part of our economy.  Is this more evidence that the middle class is in death spiral?

50% wage cuts
Caterpillar locked out its workers January 1st and demanded 50% wage cut from workers.  When workers rejected the cut, the company shut the plant down.  After the shutdown the rumour mill  speculated that the plant will be reopened in a so called “right to work” low-wage state that limits the ability of trade unions to organize.  We don’t know yet what Caterpillar plans to do.

Corporate Taxes
One columnist did the math and showed that Ontario’s tax rate was lower than Illinois, the rumoured destination of the plant. (Illinois now says it isn’t getting the plant.)   However, low corporate taxes were not enough to keep Caterpillar. In fact, media reports suggest the company was making record profits at the time of the closure.

In 2008 the Canadian government gave the firm a $5 million tax break with no strings attached to repay it, keep the plant open, or maintain a certain number of jobs.  In 2010 it was sold to U.S. based Caterpillar.   Should or could the government have attached strings to such tax breaks? 

Boycott
Some are now calling for a boycott of Caterpillar.  Mark's Work Wearhouse in London has pulled Caterpillar-branded products such as work boots and labour groups are pushing for a cross country boycott of the U.S. firm.  Will a boycott catch on?  Have any teeth?  Make any real change?

We can pontificate about what happened and where we are going but it’s too late for 465 London families who find themselves in a very tough spot to find equivalent work.

David Fowler is Jobs.ca Director of Content Development. Before joining Jobs.ca David co-founded and managed two successful internet companies. His start-up experience accompanied by his degrees in Sociology and Education give him a unique perspective on job search. In his spare time David serves as the co-chair of the Canadian Celiac Association national conference slated for May in Kelowna B.C.