Company lockout might provide example for other manufacturers to follow
The union representing locked out workers at Electro-Motive in London, Ont., is accusing the firm’s parent company, Caterpillar, of attempting to impose a contract while turning back gains in collective bargaining in Canada.
But some employment lawyers say the dispute may simply be a signal the days of highly paid manufacturing jobs are over.
More than 400 workers were locked out New Year’s Day after the company issued a final offer that would see wages cut from $35 an hour to $16.50 an hour, with no cost-of-living adjustment and a new co-payment for health insurance.
According to Canadian Auto Workers (CAW) Union Local 27 president Tim Carrie, the offer was only marginally better than the one previously offered in the summer; it would have seen wages drop by another two dollars an hour.
“We didn’t anticipate that wouldn’t be budged on,” he says. “It was so dramatic and drastic we couldn’t even counter it.”
It is an unusual position, according to Jason Russell, a labour studies expert at Empire State College in New York, who lives in London, Ont. and has researched and written on Local 27.
“They’ve tabled a 50 per cent cut, which is an unusual position to take without articulating why,” he says. “Normally, there’s overlap in bargaining ranges, a place to work from. But what would the union come back with in this case?”
It’s even more unusual because the plant has historically been profitable, as has Caterpillar — a company known for taking a hard line with its unionized workers, says Russell.
“I think if this succeeds, this is something other employers will try,” he says. “They’ll say it worked for Caterpillar against a long-established CAW local, so maybe there’s a chance it will work for us too.”
It’s not an entirely unprecedented approach in Canada, according to Alf Kempf, an employment lawyer with the Kelowna, B.C., firm Pushor Mitchell. He notes grocery store workers in British Columbia have seen their wages cut and collective agreements altered dramatically in recent years under similar circumstances.
“Grocery store workers used to make obscene money,” he says. “Now they’re mostly part-time and earning slightly more than minimum wage.”
He says the dispute at Electro-Motive may be a sign of the times.
“Unions have done a good job of getting good pay for non-skilled employees,” he says. “Lots of companies are saying the glory days are over. We can’t pay unskilled workers $25 an hour as a starting wage. We can’t pay 30 times what they pay in China and compete.”
But Kempf says to avoid charges of unfair labour practices, and the appearance of attempting to impose a contract, Caterpillar must make the business case for cutting wages. The company also needs to demonstrate its intent to reach a new collective agreement, not break the union.
“There’s a difference between hard bargaining and bargaining in bad faith,” he says.
Kempf adds that in an increasingly globalized economy, the dynamics between employers and workers are shifting.
“We’re losing traction as an economic superpower,” he says. “We can’t make bland statements anymore about companies being profitable and having a social responsibility to employees. That expectation is dying.”
Russell winces at the comparison to China and other low-wage countries. While wages are often the single biggest cost for employers and one of the only factors they have control over, some companies and unions have found compromises, he says.
Workers at Accuride Canada in London, Ont., for example, have agreed to share jobs, working fewer shifts at higher pay, he says.
He and Carrie question the assertion manufacturing jobs are unskilled. Many of Electro-Motive’s employees have trades, such as welding. But they say that’s not the real issue.
“If workers doing skilled labour are not worth $35 an hour and only worth $16, is anyone going to be worth it — union or not?” asks Russell.
Electro-Motive referred all media inquiries to a website statement. It says, in part, the company “competes in a global marketplace where orders for locomotives are won or lost based on extremely competitive pricing” and the company “is not sufficiently flexible and cost competitive in the global marketplace” under the current collective agreement.
