About 95 per cent of the unionized workers at Electro-Motive Canada have ratified a closeout deal that will allow the shutdown of the U.S.-owned company's London locomotive manufacturing plant in southwestern Ontario.
The company, Progress Rail, a wholly-owned subsidiary of heavy equipment giant Caterpillar Inc., had employed about 500 hourly employees at the plant, who were represented by the Canadian Auto Workers union.
At noon Thursday the 480 CAW members at the closed Electro-Motive plant in London ratified the details of their severance packages.
Company says package 'exceeds requirements'
The deal provides three weeks pay for each year unionized workers have been on the job — a measure that is beyond current provincial labour standards.
All bargaining unit employees will receive a $1,500 lump sum ratification bonus plus limited company-paid healthcare benefits.
Individual severance amounts will range from a low of about $13,000 (for three years service) to a high of about $148,000 (for 30 years service).
The company also will complete funding of the employees' pension trust. The company will make a payment to the union of $350,000 to fund settlement of all grievances, establish an adjustment program and cover representation costs for bargaining unit employees.
The company will issue severance payments and ratification bonuses within 15 days.
The law requires only one week's pay per year of service and does not provide severance for employees with less than five years tenure. Ontario law also caps severance payments at 26 years of service.
Seventy-five EMC employees, with less than five years service, who would not otherwise be eligible under the law, will therefore receive severance benefits under the agreement, the company said.
The CAW's president, Ken Lewenza, said the closure and shutdowns of truck, auto parts and other plants in southwestern Ontario have hit the region hard and require an industrial strategy from Ottawa to help the troubled manufacturing sector recover.
Instead, the economy is shifting towards the Western Canadian oil and other resources sectors, propping up a high dollar that is killing manufacturers in central Canada.
"We need to talk about a jobs strategy in manufacturing," Lewenza told a conference call. "We're talking only about energy in Alberta."
The locomotive plant began operations in 1951 and has many employees with decades on the job. According to Progress Rail, the package significantly exceeds the requirements of Ontario employment law.
Workers refused 50% pay cut
The plant closed after a contract dispute. Parent company Caterpillar locked out its workers Jan. 1 after they refused to accept an average pay cut of 50-per-cent.
Bob Scott worked at the plant for 23 years and was a union rep for 14 of them. He said the government needs to take steps to better protect workers and jobs in the future.
"This is the company that's locked out its employees and at no point did they ever want to bargain a collective agreement. So we have people who've been out there now for more than six weeks, with no income because [employment insurance] is denying their claims because of a labour dispute. That's something that has to be changed."
Caterpillar is moving its operations to Indiana where labour is cheaper.