Should We Nationalize Caterpillar?

The labour union activists are strange people. Usually they live in an imaginary world and just like Don Quixote fight imaginary enemies, which turn out to be nothing more than windmills. But unlike Don Quixote, who after each fight finds himself lying on the ground in his shattered armour, the union leadership ends up hurting many different entities, including its own members.

Whether it is CUPE supporting the Native criminals in Caledonia, or the garbage collectors ready to expose the people in Toronto to diseases so that they can strike to keep a minor benefit, the unions always manage to do their damage.

Case in point – the drama, which unfolded at the electromotive plant in London, Ontario, owned by Caterpillar.

A few months ago the corporation stated that in order to keep the business going, they had to cut their expenses. That included reducing the wages from (as far as I remember) $35 per hour to about $18. Wages of $35 paid for jobs that don’t require any significant qualifications exceed the payment for many highly qualified positions in other fields.

Apparently that juicy payment, obtained by the unions in the happy-go-lucky times before the People’s Republic of China entered the manufacturing business, wasn’t something that Caterpillar could afford anymore.

The local Canadian Autoworkers Union, operating at the plant, saw this as a declaration of war. The fight eventually caused the management to lock out the workers.

The long standoff ended even worse – last week Caterpillar decided to close its London plant.

Thus CAW union added another questionable notch on its belt by driving another business out of Canada.

But, as I said in the beginning, reality is not something that bothers the unions. In Rabble, the online magazine dedicated to the revolutionary destruction of Canada, I just read a piece by Dave Coles, President of the Communications, Energy and Paperworkers Union of Canada (CEP).

It gives you a fascinating glimpse into the way of thinking of the union bosses. Here is what he proposes:

“This decision is a slap in the face to Canada which gave Electro-Motive tax breaks to protect jobs.

“It’s an act of corporate aggression against Canada and we should retaliate with an immediate tariff against Caterpillar products imported to Canada. The Ontario and federal governments should take the same action in this situation as former Premier Danny Williams did at AbiitiBowater in Newfoundland — they should seize the Caterpillar assets in London and ensure that all community and worker obligations are fully met.

“Why do we have governments, if not to protect Canadians against this kind of corporate agression?

“There will be a strong labour response to Caterpillar’s aggression against Canada. CEP is prepared to throw its full support behind any actions that the CAW and central labour bodies take to achieve justice for these workers.”

Behind the fiery Leninist rhetoric is hiding a demand that the capitalist Canadian government take a course of action similar to that of the Hugo Chavez government.

And what about the tax breaks? They are provided to a business as an incentive to move to a place where it can make more profits. If the business is burdened with too much overhead (including inflated wages) and the profit is non-existent, the tax breaks become meaningless. The taxman who taxes nothing collects nothing.

It is strange that CAW can’t understand such a simple math. But that’s not a problem – Coles has a better solution in the spirit of Comrade Stalin’s economics.

We just have to confiscate the plant and impose exorbitant tariffs on the Caterpillar imported products to make the union happy.

Coles doesn’t explain how the seizure is going to work. Does that mean selling the buildings, the land and the machines? That would hardly provide money for more than a few months of wages. Or maybe he means nationalization? In that case it would be entertaining to watch how long it should take for the McGuinty government to drive the plant out of business. I am not aware of any case in history, in which a government has been able to run a successful business.

The funny thing is that among the many things that have angered Coles we don’t see the most important – the role of the union. If it weren’t for the stubborn inflexibility and arrogance of CAW, the plant could’ve been saved.

Now, regardless of what union boy McGuinty does to help out his labour sponsors, nothing is going to work. The plant is gone and so are the jobs.

Is there any lesson to be learned here? Nah, the unions are not into learning lessons…


© 2012

Be Sociable, Share!


  1. The Lone Ranger says:

    Admiwrath, the Unions still think they are living in the 1970s. They can’t get their heads around the fact that China literally calls the shots these days when it comes to low cost, low paid workers turning out every type of commercial wheeled vehicle en mass. In 2010, Chinese factories built 17 million cars, minivans, pickup trucks and sport utility vehicles. That’s up from two million in 2000, making it almost twice the size of the United States or Japanese industries and far larger than any European country’s auto manufacturing sector. As of 2009 there were 52 foreign and domestic carmakers operating in China, compared to 15 in the United States. Top car makers in 2006: 1) Shanghai GM; 2) Shanghai Volkswagen; 3) FAW Volkswagen; 4) Chery; 5) Beijing Hyundai; 6) Tianjin FAW Toyota; 7) Tianjin FAW Xiali Automobile; 8) Geely Automobile; 9) Guangzhou Honda ; 10) Dongfeng Peugeot Citreon. These top 10 automakers account for 70% of total sales.

    As for Caterpillar, The new $125M Caterpillar factory in Suzhou, China, manufactures medium wheel loaders and motorgraders, primarily for the Asian market. back in Canada, the CAW seems to be following in the footsteps of its former leader Buzz Hargrove, who cost hundreds of auto-workers their jobs with his kamikaze-socialism.

    They just don’t get it – it is THEIR tactics and THEIR 1930’s mentality that is killing industry in Canada.

    1. admiwrath says:

      As usual, your comment provides bullet-proof arguments. The unions are bound for self-destruction, but I pitty the workers who put their trust in them thinking that they will defend their interests. Collective thinking is really bad.

Leave a Reply

Your email address will not be published. Required fields are marked *