Whose Interest is Being Served?

Like the employees of the NewPage and Bowater mills the workers at Electro-motive Diesel in London, Ontario have been through a very difficult experience. The union representatives in Nova Scotia have done a better job of dealing with the economic realities.

The strike at Electro-Motive Diesel in London, Ontario has been a sorry spectacle. Caterpillar asked employees to take a 50% wage cut. After a one month lockout produced no result it announced that the plant would close with the loss of 450 direct jobs and many more in the community. There is widespread disgust with the behaviour of Caterpillar, which has been immensely profitable.

Less attention has been paid to the actions of the CAW which represented the workers at the plant. Caterpillar has a newly opened plant in Muncie, Indiana at which workers were being paid the same rate as workers in London were being asked to accept. And Indiana has just become the 23rd state to enact “right to work” legislation which prevents employers from being required to deduct union dues from employees who do not want to be part of the union. All this was well known. So exactly what did the CAW think they were going to accomplish? It was a labour dispute they had no chance of winning.

The demands from Caterpillar were harsh, though not much greater than the cumulative cuts that have been experienced by Nova Scotian workers at NewPage and Bowater Mersey where, even after the cuts in pay, there will be substantial workforce reductions.

It would have been very difficult for the CAW to recommend acceptance to the employees. But given Caterpillar’s reputation and the new capacity in Indiana, the CAW had to know that their stance would result in the plant being shut down. Had they accepted the bitter medicine the employees would at least be making $16.50 per hour. They could still look for jobs elsewhere which is what they will be doing anyway, with no pay in the meantime. The CAW’s stance may have served a larger agenda for the union but it did not serve the best interest of the employees in London.

The argument against “right to work” legislation is that all employees should have to pay for the “benefit” of union representation. Those benefits are harder to see if the employer goes bankrupt or a plant shuts down.

Every major unionized airline in North America has commenced restructuring proceedings in the last few years. So have General Motors and Chrysler. So have all the big steel companies. In every case the unions found it impossible to make concessions sufficient to keep the businesses viable. Meanwhile employees at Westjet, Porter, and the Japanese branch plants have had much less turbulent lives.

Unions sometimes have great difficulty adapting to change. Metro Transit union president Ken Wilson was quoted as saying, without apparent irony, that the current highly inefficient roster system for drivers should be kept because it had worked well for the last century. Of course in the public sector this sort of nonsense may work because there is no risk of the jobs moving to Indiana. But even there the employees of the city of Toronto has recently been able to reach an agreement that allows for greater efficiency.

In the private sector unions must begin to care about the competitiveness of their corporate employer and of individual plants. Rather than contesting changes that will improve efficiency they should welcome them. They need to keep their plants competitive not only with China or eastern Europe, but also with a growing number of US states, the ones where all the job growth is happening.

The same is true for the public sector. Cities and provinces with effective and efficient public sectors will tend to have lower tax rates, better economic growth, and more liveable communities.

Unions are important players in determining whether our province will succeed. They need to deal realistically with economic challenges even when dealing with an uncaring and confrontational employer such as Caterpillar.


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