And just like that, Years of EMD production come to an end in Canada.

Proving that once again, Caterpillar does not mess around with unions, EMD London is being shut down. All production is moving to Muncie at much lower salaries.

 

it's terrible that people are loosing their jobs but wages have to stay in check with market forces. Caterpiller isn't a charity... They need to be a profitable company.

 

Um, did you see Capterpillar's financials from last year?

I assume not, because if you had, then you'd know that they were crazy profitable last year.

 

It is remarkably unlikely, bordering on impossible for a manufacturer of such equipment to be profitable as an overseas industry. Especially with GE breathing down their necks. The shipping costs destroy the savings.

My impression was that EMD and progressive were doing OK, that EMD in fact has been steadily improving it's bottom line, BUT, they can't meet GE on price or quantity. At the same time they were saddled with the same type of union contract GM struggled with. It was after all a GM contract.

However, the 50% cut in pay was way more agressive than required. Classic Caterpillar hardball.

 

There was a recent article on the NY times about the manufacture of iPhones and pads in China. One of the things you learn is that part of what makes the savings possible is that all the sub contractors are within miles of each other. You can literally get any part you need within a 10 mile radius. American auto manufacture and locomanufacture work the same way. The furthest distance would be 710 engines from lagrange and AC components, the only big item that comes from overseas.(assuming they didn't open a us facility like most do.) The vast majority of locomotives are made for the us market. Why incur transport costs for items weighed in tons that can't be shipped in containers. Sure, when british rail operators want a quantity that can be counted on your fingers, you ship, but we're talking hundreds of units.
Also, a member of my model club is a german who works for seimens he is here to build light rail transit engines in a facility in Sacramento, just because it is not reasonable to ship them for large quantities. How many foriegn automakers have plants in the us and use US supply chain? Almost all of them. China only makes sense if it fits in a 40' container.

Some parts are made south of the border and some export work and overflow assembly goes there, but the odds of it all moving to mexico in the near term are low.

 

I generally agree, but wanted to point out that having grown up in Illinois and seen the workers pricketing in peoria and generally learning about Caterpillar's tactics over the years, it's well known that they have a reputation of being ...hard on unions. They're reputation is that no other company in the US treats unions the way they do. So I'm judging them based on their history, not based on my opinions of unions. They are known for going after the unions for more than just competitve reasons. It is their reputation and that's all I refer to.

 

I will say no more on the ins and outs of labor negotiations, but in theory, doesn't this apply to the union and employees as well and everyone really. Also, it assume that none of the actors are nefarious. Not that I think Caterpillar is per se', but there are jerks in this world and many of them are in boardrooms.

Again, not to side with anyone, just pointing out the realities.


My company had a previous CEO that laid off thousands, the 2 CEOs since have wished he hadn't. He was not considered to have had the interests of the business at heart.

 

It is the usual race to the bottom. The "take it or leave it" bargaining position of a 50% wage and benefit reduction would most likely not sit well with any of us on this board, would it? But it should be good for GE, they should be selling even more of their engines into the Canadian market. Strictly on merit, naturally, since they do have a superior product.

Note: I never belonged to a union, but I can easily understand how they came about. North America would otherwise still be in the Dark Ages with serfs, slaves and bare subsistance living. OTOH from what I read, see and hear we're on the way back to those "good old days". People have a hard time getting by and even a harder time doing the math!
As always strictly my opinion!