Dispatches From North Of The Border

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Cohn: How Canada let Caterpillar strip a plant clean


U.S. heavy equipment maker Caterpillar Inc. announced Friday it was closing its Electro-Motive Canada plant in London, Ont., a month after it locked out about 450 workers.

By Martin Regg Cohn Queen's Park Columnist
This article was first published in TheStar on February 5, 2012

Ask yourself this: Why did Caterpillar buy a plant only to destroy it?

The labour dispute at a London locomotive factory was nasty, brutish and short — a depressingly Hobbesian scenario in which brute strength prevailed over civilized rules of conduct.

There were no strikebreakers wielding clubs at Electro-Motive Canada, because there was no strike to break — the union was locked out on New Year’s Day. There were no replacement workers to bust the union, because the union was merely invited to slit its own wrists — by halving most wages from $34 to $16.50 an hour.

The U.S.-based owner, multinational giant Caterpillar Inc., didn’t so much humiliate 460 skilled workers as ignore them. It started and ended this negotiation with a carefully choreographed plan to pack up, shut down and leave town.

Clever multinationals — and this is one cunning Caterpillar — don’t spend hundreds of millions of dollars to buy a factory only to shutter it. So what was the plan?

Never mind Caterpillar’s cold-hearted tactics. Its clear-eyed strategy exposes our own blindness.

The big bad Americans saw past our myopia — beyond the cash value of the plant’s physical property to size up and seize the company’s intellectual property: the innovation, trade secrets, manufacturing processes and R&D residing in London.

It won’t just relocate the heavy equipment on the factory floor, but harvest the technological know-how subsidized with government incentives and writeoffs. This wasn’t bullying, it was highway robbery — with our politicians watching from the sidelines.

Caterpillar kicked those workers in the teeth, but we should be kicking ourselves for letting it acquire the legal right to do it as it pleased when purchasing the old locomotive plant. There has been much hand-wringing that foreign investment safeguards weren’t triggered, failing to ensure a net benefit to Canada with explicit job guarantees after the takeover.

But lost jobs aren’t our only loss. Be it Nortel or RIM, we need to value the technology and patents in play when foreigners start kicking the tires. The buyers are just as likely to be scavengers as investors. And if their primary goal is to spirit away our intellectual property, they will treat the ancillary human resources as an expendable asset to be stripped away, bargained down or locked out.

The $4.5 billion auction of Nortel patents last year made a mockery of the more modest valuations that the bankrupt company had put on its own treasure trove of intellectual property, nurtured by our tax dollars. Canadians always sell themselves short.

So the first lesson of the London massacre: Ottawa must be vigilant about vetting foreign investment and retaining jobs, but also mindful of valuing — and anchoring — our homegrown intellectual property. Why underwrite our companies if we willingly sell off our embedded brainpower to foreign bidders who leave Canada cash-rich, patent poor and jobless?

If RIM is one day placed in the shop window, are we ready for a fire sale of its technology? What if Bombardier — which also builds locomotives — ever goes on the auction block, patents aplenty?

Another lesson: When it comes to the economy, empathy isn’t enough. Premier Dalton McGuinty adopted a reflexively tepid tone from the start, expressing the vain hope that both sides would come to their senses. Belatedly last week, he ratcheted up the rhetoric by exhorting the plant’s owners to play fair.

But he never picked up the phone to the employer. Nor did he reach out to Prime Minister Stephen Harper to forge a non-partisan common front. When a company treats its workers like dirt, a premier should leave no stone unturned.

McGuinty and Harper must conduct a post-mortem. More Caterpillars are coming, and they will metamorphose into a plague on our intellectual property if we don’t start using our heads. I’ve argued before that globalization can bring benefits, but only if we’re smart enough to play defence as well as offence.

It’s too late to save the jobs in London. Caterpillar has closed a plant and cashiered its workers, but it has opened our eyes: it’s not just the jobs on the factory floor that are lost, but the technology that buttresses them.

A locomotive factory is gone. Now the tech train is leaving the station — with a free pass from our politicians.

Martin Regg Cohn’s provincial affairs column appears Tuesday, Thursday and Sunday in TheStar
(http://www.thestar.com)


mcohn@thestar.ca

twitter.com/reggcohn

This article was first published in TheStar on February 5, 2012 (Toronto, Ontario Canada)

(http://www.thestar.com/news/article/1126357--cohn-how-canada-let-caterpillar-strip-a-plant-clean?bn=1)

The following was sent to the Mayor of Oakville following a Planning Committee Meeting May 12, 20010.

Over regulation and planning based on vocally intense groups is not the way to build a better long Oakville. The drive-thru issue is endemic of a new need to regulate everything that "moves" in Oakville. I was very disappointed in the Planning Committee decision concerning drive-thrus today. Too many councillors are unwilling to see real needs of of an inclusive Oakville and look at a longer term need for Oakville.

In my opinion, the planning staff and their responses to questioning were callous in their comments and it appears they are not committed to a big picture Oakville. They take the direction from the council flavour of the day. It's attitude Monday afternoon was anti-business, anti-special needs and is anti-ageing .. all of these are also huge parts of our population.

Oakville is becoming a very negative place for these groups and anyone without a voice to the top.

At some point businesses, large and small will not consider locating here because Oakville blows with whatever the direction of the wind is blowing. Who can plan a long term business plan here because the Council just changes the rules to the flavour of the group that complains the most.

Oakville Council claims to speak and to plan for "stable neighbourhoods" but they do this at the expense of others as they trample their ability to be in a caring Town of Oakville by ignoring the many groups groups such as persons with disabilities, who make up a complete and caring Oakville.

Oakville needs to be a caring and supportive community not a community of special interest property owners. Stable neighbourhoods is code word for special interest groups with money and voices.

The future of Oakville is being planned now and ignoring the majority of the population will produce more fractures in the future in not building a cohesive and caring community as a whole.

I would urge you to look deeper inside and see a better and more inclusive and caring Oakville for all citizens of Oakville.

Rumours spreading around the University of Waterloo campus and in particular, the RIM Campus this week have GOOGLE officially locating their NEW Canadian GOOGLE Campus on “UniWAT” lands or in close proximity to the RIM Waterloo campus.



As with any new, major corporate deal of this size, no confirmation (or denial) from City of Waterloo officials is apparently available or forth coming. The same tight lipped, no information is available are also affecting the local paper, The RECORD, the Region of Waterloo and anybody else who has an official capacity. They all seem to be unusually politically quiet. Wait for the announcement and the political “heroes” to emerge.


Alex Hutchinson for The Ottawa Citizen wrote on February 08, 2007 , the following ... " Google's Search for a Canadian Foothold Found Waterloo, Not Ottawa. "

Time will tell if this is indeed a truly almost complete deal for Waterloo. The rumours are this deal will happen very soon. Size and future of a Canadian GOOGLE Campus (CGC) in the City of Waterloo are still unknowns.

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The Town of Oakville has a gratuitous annual income per household. In 2006, the average household income was just under $90,000 per year per household compared to the provincial average of $62,000.

Today, the Town of Oakville has 41% of its households with incomes greater than $100,000 per year and nearly two-thirds of all Oakville households have incomes greater than $70,000 per year in 2001 dollars. Only 11% of the households have incomes of less than $20,000 (Oakville Economic Development Association).

This extremely large household income level places Oakville as the most affluent city or town in Canada. Oakville will periodically rank a close second to places like Markham, ON, Vancouver, BC or Victoria, BC (where new money wealth is growing rapidly). Almost every year during the last 30 years, Oakville has been the leading household income community in Canada.

To better illustrate, this prosperity oxymoron of my current home town, the average selling price of homes in Oakville in 2005 according to the Oakville, Milton and District Real Estate Board (OMDREB) was $520,000. The average Ontario home sold for only $205,000 during this same time period. This provincial average is less than one half the value of an average Oakville home.

Less than one kilometer down the street from me is Canada’s most expensive single family home. It took over two years to build, is a massive 32,000 square feet and when completed the Edgemere Estate was listed for sale at $45,000,000 Canadian. (This dollar amount is equal to the TOTAL building cost of the last two secondary schools built in the Region of Halton in 2002 and 2003.) This is affluence run amok! Couldn't the guy who built it as a family home live in it or was it too small?

As you well may have guessed, Oakville is THE executive bedroom home to many of Canada’s large corporate CEO’s and senior executives. It also attracts the homes of many professional sport team athletes, as well as many of the partners in Canada’s largest legal firms and senior executives of Canada’s banks. The owners and senior executives of Canada’s publishing and financial communities reside here (newspapers, banks, investment banks, investment markets and insurance) as well as key partners aqnd principals in such areas such as consulting and accounting firms can be found here. Many senior executives make Oakville their domestic bedroom community. Oakville is the suburban home to much of Canada’s old money.

Get on the Queen Elizabeth Way (QEW), drive east for 20 minutes and you will arrive at the Central Business District (CBD) of Toronto. As for commuting to Toronto daily, I did the one hour plus commute into the city for too many years and do not miss the stop and go traffic grind one must tolerate each way.

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Photo from Patrick's Photoblog

Oakville, Ontario is celebrating its official 150th anniversary as a town/village in 2007. It is a unique suburban environment which I both live and teach in. A city with a small town flavour and small town promotion but one of the most affluent cities in Canada and in North America. As an educator living and working in Oakville, this affords me the opportunity to see what North America views as economic success and to also experience first hand the huge differences still found in one of Canada's wealthiest cities. Poverty and an underclass still exist here however the community has avoided or purposefully marginalized them from the eyes of these citizen elite who believe their community is immune from social stratification.

Since the early settlement days of the 18th century, Modern day Oakville was first located and known by being establishing at the mouth of Sixteen Mile Creek. This would have been a sixteen mile traverse by land along the lakeshore from the "Toronto Carrying Place". at the mouth of the Humber River. The "Town of Oakville", which is still its official name designation, has an estimated population of 174,000 persons in 2007.

GPS Locator:

43°26'44.74"N 79°40'05.36"W

Oakville, overall, has a gratuitous annual income per household. In 2006, this household income was just over $90,000 per year per household income compared to the provincial average of about $62,000. This extremely large household income level places Oakville as the most affluent city or town in Canada. It will periodically place a close second to other locations where new money wealth is growing. Oakville and in particular many of the people living in south Oakville (you can most certainly leave me out of this group) are barometers of the thriving essence and decadence of old and new money in Upper Canada!

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