Workers in London, Ont., say they'll continue to picket even though the Electro-Motive Diesel plant is now officially closed, as the head of the Canadian Auto Workers calls for a public inquiry into the closure.

Progress Rail Services Corp., a subsidiary of U.S. construction equipment conglomerate Caterpillar, announced the closure of the locomotive plant Friday.

The company locked out 450 workers from the facility on Jan. 1. Costs were the main factor in the dispute, with the company pushing certain employees to take a 50-per-cent pay cut, despite making nearly $5 billion last year.

'[The Harper] government has a responsibility to hold that company accountable.'—NDP MP Robert Chisholm

Caterpillar said costs were too high.

CAW union boss Ken Lewenza admits cost has meant the loss of many manufacturing jobs in Canada.

"At the end of the day, if it's all about competitiveness, then workers in Canada won't win," he said. "If it's about productivity, if it's about quality, then we will survive."

Union workers plan to stay on the picket line until they get a closure agreement from the company.

Tony Biviano, one of the employees now out of work, said he's confused.

"It's not an economic thing; I don't think that at all," he said. "There's lots of money here."

It's widely expected that Caterpillar is moving the jobs to its plant in Indiana; the company is holding a job fair there on Saturday.

On Wednesday, Indiana passed a right-to-work bill, after pressure from Caterpillar, that allows workers to opt out of union membership.

"I don't think this timing is a coincidence," London-based economist Mike Moffatt told CBC News. "Because Caterpillar got the legislation it wanted and the governor was then able to promote the jobs that legislation brought to Indiana."

Latest blow to manufacturing sector

The plant's closure is the latest blow to a Canadian manufacturing sector that is struggling under new competition from low-cost countries, a sluggish economic recovery and no currency advantage, due to a strong loonie.

Michael Burt, director for industrial economic trends at the Conference Board of Canada, said the manufacturing sector has been improving since the lows of the 2008-9 recession, but noted it faced difficulties long before then.

"Before the recession, we saw no growth in broad manufacturing activity for much of the last decade."

Prime Minister Stephen Harper had used Electro-Motive as a backdrop in 2008 to promote big tax breaks for industrial capital investments.

NDP MP Robert Chisholm called on the federal government, which has said repeatedly that the Electro-Motive dispute is one between a private company and its workers, to do something.

"The fact is that taxpayers have funded Caterpillar, the growth of Caterpillar in this country," Chisholm said.

"In fact, we're funding the move of Caterpillar to the United States and, so I say, and I think Canadians would agree, that this government has a responsibility to hold that company accountable."

Andrew MacDougall, a spokesman for Harper, challenged Chisholm's claim that taxpayers funded the Electro-Motive plant, adding that he wasn't aware of any government dollars having gone to Caterpillar.

He said the prime minister was disappointed with the outcome of the labour dispute and sympathized with the workers who are now without jobs. But he blamed the provincial government for not being able to mediate a solution.

MacDougall said Ottawa is working on a plan that will generate new jobs and opportunities for those affected by the closure and will also work with Ontario to provide access to benefits and skills training for displaced workers.

With files from The Canadian Press