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and may move production to a Muncie, Ind. plant..

http://online.wsj.com/article/SB10001424052970203889904577200953014575964.html

By JAMES R. HAGERTY

MUNCIE, Ind.—Bulldozing its way through a high-profile dispute over wages, Caterpillar Inc. said Friday it will close a 62-year-old plant in London, Ontario, that makes railroad locomotives, eliminating about 450 manufacturing jobs that mostly paid twice the rate of a U.S. counterpart.

Caterpillar's decision, ending a standoff with locked-out workers huddled around barrels of burning scrap wood outside the London factory gates, may benefit another downtrodden manufacturing city: Muncie, Ind., where Caterpillar last year opened a locomotive plant and where it is trying to fill jobs at about half the pay workers in Ontario received. At a job fair in Muncie Saturday, Caterpillar will be offering jobs at that plant at wages ranging from $12 to $18.50 per hour. Wages for most workers at the Ontario plant are about 35 Canadian dollars an hour (US$35.03).

The Canadian Auto Workers union, which represents the workers, called the move "truly rotten behavior. They are immoral, they are unethical and they are greedy," said union president Ken Lewenza in an interview. He said he believed the company had no intention of keeping the plant open and demanded steep wage cuts that weren't acceptable to the union. Caterpillar, he said, informed him of its decision 10 minutes before it issued its news release. He was also angry at the federal government of Prime Minister Stephen Harper and the provincial government for not intervening.
...

Caterpillar, based in Peoria, Ill., had been pressing the CAW for more than six months to accept a new contract with wages about half the previous levels. On Jan. 1, Caterpillar locked out the Ontario-plant workers, saying it would halt production until they accepted new terms. CAW leaders said recently they were unwilling to accept wage cuts but were willing to explore concessions, including reduced vacation time.
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Caterpillar has made clear it hopes to avoid any union representation at the Muncie plant. Last year, an online job advertisement published by the company sought human-resources managers with "experience with providing union-free culture and union avoidance."

In an effort to attract more union-shy employers, Indiana Gov. Mitch Daniels on Wednesday signed a "right-to-work law," barring labor contracts that require all workers to pay union dues."

No surprise. Trane/American Standard/Ingersoll Rand/whatever we are supposed to call it is closing down a local plant which manufactures a/c units. It's been up and down at that plant for a while - constant layoffs and rehiring - they finally just gave up.

Wow, from $35 an hour to $12. That's got to make the anti labor people happy. Isn't competing with the third world grand?

Wow, from $35 an hour to $12. That's got to make the anti labor people happy. Isn't competing with the third world grand?

Free marketeers just want to make everybody equal, but some more equal than others.

They are not forcing you to take the job, you have a choice.

$12/hr wouldn't be bad around here. I'm making $10,50/hr with a BS, that after 6 months of job hunting within a 30 mile radius. $35/hr would be a dream job. Open the plant up here and I'd be all over that, plus I'd have a great shot at advancement.

It's a race to the bottom. Frankly I don't have a problem with free enterrprise, but I bristle at wages being lowered from good middle class wages to something slightly above minimum wages (and people cheered).

With that thinking they should cut to the chase, avoid the US, and move to Mexico.

With that thinking they should cut to the chase, avoid the US, and move to Mexico.

They will if they cant find workers in the US.

They will if they cant find workers in the US.

Or if they can find third world labor that has the technical prowess to assemble their products at a price low enough to offset the cost of the longer shipping distance. I don’t fault the company Herm. I fault our national policies as to imports.

I don’t suspect that this will change until a larger portion of the white collar work force, such as lawyers, CPAs, insurance sales people etc, is sent to India, or lower costs markets. It’s all theoretical until your ox gets gored, then it’s an outrage.

All People look at is the wages.

Property Taxes.
Manufacturing Taxes and or
Business Taxes
Health Care
Workman's Comp
SSI contribution
Liability Insurance
Property Insurance
Utilities
Legal costs
Loan costs for the equipment on top of Mortgage payments on the property
Supply cost of the materials needed to manufacture the product.
Shipping costs.
Ect Ect Ect ..............

They all add up and the only variable in the equation is labor costs.

I don’t suspect that this will change until a larger portion of the white collar work force, such as lawyers, CPAs, insurance sales people etc, is sent to India, or lower costs markets. It’s all theoretical until your ox gets gored, then it’s an outrage.

Lets start with government workers.. and perhaps with teachers using telecommuting to India.

Lets start with government workers.. and perhaps with teachers using telecommuting to India.

Herm, I worked for the Federal government from the Ford presidency to the Obama presidency and saw some incredible, but sad changes. But the changes aren’t what most people think of, and get angry about. In the 80s there was a big push to contract out as much as possible. This resulted in fewer low paid federal employees, who were replaced by corporate supplied low paid employees. Of course the corporations took a cut, and the resultant costs were higher.

The problem is that at this stage the government needed highly paid professionals to oversee these contractors. After all we can’t have fraud. These people cost a lot more, and combined with the contractors greatly outnumbered the people they replaced.

The biggest fear for any federal manager is to not be able to answer ANY question about a program. They don’t want to be featured on O’Reilly as a bumbling, ineffective manager of the people’s money. And let’s be honest here, a mismanaged government program is red meat for the pitchfork crowd. It’s much safer to create vast levels of documentation, no matter what the costs are, and to justify it.

When it comes to federal spending however, the big money is the military, which the Fox crowd will not consider reducing.

The subcontracted public servants are easily laid off when there is need.

Yes Herm, that's the theory. However I haven't seen it applied yet....ever. I started my career with 200 controllers and one parking lot. There is now about 200 controllers with three parking lots (full). But there are fewer federal workers.

Now about the military costs........

Those three parking lots would still be filled up the old fashioned way, but with Federal employees.. granted it does not make much of a difference if we never cut back the size of government.