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Caterpillar sets new pay terms for London workers

Security fences surround ocomotive maker Electro-Motive facility in London, Ont., Sunday, Jan. 1, 2012, in anticipation of a work stoppage. The Canadian Auto Workers union says it is holding off on a strike in the hope of reviving contract negotations with Caterpillar Inc.

DAVE CHIDLEY/THE CANADIAN PRESS/DAVE CHIDLEY/THE CANADIAN PRESS

Caterpillar Inc. is unilaterally implementing lower wage and benefit terms for locomotive manufacturing workers in London, Ont., after negotiations with the Canadian Auto Workers union failed in the days leading up to a contract expiration.

Caterpillar's Electro-Motive Canada unit – representing about 450 workers – said in a statement it advised the CAW on Sunday morning that "it intends on implementing the wage and benefit terms of its last offer." The CAW has said those terms are not acceptable.

"Any employee who works for EMC after 11:59 p.m. of Dec. 31, 2011 will be deemed to have accepted the wage and benefit terms of EMC's last offer," the company said.

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On a website dedicated to negotiations, Electro-Motive Canada said CAW workers commenced a strike, but a CAW official told Reuters that was untrue.

"We're not on strike," Bob Orr said Sunday. "We're asking our workers to report for duty on the next shift (and) we're asking the company to return to the bargaining table."

On Friday, CAW members in London granted union officials the authority to call a strike if Electro-Motive unilaterally implemented new employment terms. Orr said the union was not using that power at this point.

The contract expiration and implementation of new terms for workers follow several months of negotiations between Caterpillar's Electro-Motive division and the CAW. Caterpillar has said its new contract offer was designed to make the company more competitive.

CAW officials have said the offer is unacceptable because it includes a more than 50-per-cent reduction in wage and health-care benefits, and an elimination of pension benefits.

Electro-Motive is part of Caterpillar's Alabama-based Progress Rail Services division, which competes with General Electric Co. and Bombardier Inc.

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