Neville Britto is a Political Science and History student at the University of Toronto.
The story of Caterpillar and the recent employee provocation in London, Ontario is hardly one of mutual trust and respect. Rather it’s a textbook case of a callous big business bullying the Canadian workers that build the products and brand (Electro-Motive) from the ground up. In 1991, the people of Ontario breathed a collective sigh of relief when they saw the last CAT front-end loader trot out from the now-closed Brampton assembly plant and operations moved to Clayton, North Carolina. Reassured not by the fact they had just fired 380 people at a plant that had operated since 1959 but because no Ontario community would have to suffer CAT’s notoriously heartless greed again. Man, were we ever wrong!
In the case of EMD London, the rhetoric that Canada is not competitive in a globalized world or in a free trade economy is nothing short of highly politicized nonsense. Globalization and free trade are hardly new concepts in Canada. Rather, the two interrelated developments have existed in Canada for well over two decades now. To the people that subscribe to this theory I ask the following: how has EMD London managed to compete globally, survive for all these decades if it had operated unsustainably? Electro-Motive currently holds over $7 Billion dollars worth in outstanding generation and manufacturing contracts over the next few years and, until last week’s decision, all of that would either be imported or manufactured at the EMD facility in London.
To understand this concept it is only fitting we examine the London Electro-Motive Diesel story which dates back to mid 1959 and the creation of General Motors Canada's Diesel Division (GMDD).
General Motors Diesel Division (GMDD Canada) / GM - Electro Motive (1950-2005)
The city of London has been the cornerstone of the diesel assembly industry in Canada and the rest of North America for decades. In the late mid 1950s General Motors of Canada (called General Motors Diesel Division - GMDD) decided to start assembling locomotives in the then rural suburb of London, Ontario. The move was an excellent business choice as the location was close to the American border for export/trade purposes and designed to support the rapidly expanding Canadian National Railway. By August 11, 1959 the first locomotive, a GP7 (Toronto, Hamilton & Burlington # 71), had been built. Following was a series of requests for newer and better locomotives and coaches for passenger and freight routes in Canada and GMDD. Alco, Montreal Locomotive Works and General Electric were all vital locomotive manufacturing giants eager to win massive government subsidized contracts in Canada.
Primarily due to their “Made in Canada by Canadians” approach GMDD and Montreal Locomotive works were often chosen by Federal and provincial governments (Canadian National Rail, Ontario Northland Rail, VIA Rail, GO Transit, etc.) to support local manufacturing and Canadian employees. GMDD’s reputation for quality built goods earned them a name around the world as being pioneers in diesel electric technology and manufacturing.
However, in the early 60’s the demand had shifted from mass heavy rail transit towards local commuter subway and transit bus operations. By that time, General Motors had diversified into everything from transit busses to military equipment. With contracts streaming in from every part of North America, General Motors was in a massive bind. Their normal heavy truck and bus assembly plant in Pontiac, Michigan could simply not keep up with the demand. With newer contracts from mass Canadian transit operators, like the Toronto Transit Commission, Calgary Transit, Edmonton Transit, and more, it only seemed logical to shift or start producing the popular standard GM T6H-Series “Fishbowl” models here. The busses “Fishbowl” nickname was coined as its trademark windshield was shaped and bulged like a glass goldfish bowl.
In the mid 1970s, to meet the demand, General Motors Canada began the process of retooling a section of GMDD to build transit busses in addition to the world-class locomotives it had built its reputation and prided itself on. When the trademark Pontiac transit buses and coach lines closed to focus on car production, GMDD became the sole provider of General Motors busses and coaches across North America. All the busses produced at GMDD were powered by GM’s subsidiaries, Detroit Diesel engines and Allison Transmissions, many of which were also made or assembled in Canada.
For deciding to build in Canada, the contracts streamed in from all over the country to support General Motor’s respect for Canadian built products and labour. The advances in technology and Canadian quality were not only recognized by General Motors, but multibillion dollar corporations like Brown-Boveri Canada that partnered with GMDD to build a fleet of electric powered trolley “Fishbowls” for Calgary Transit and several other operators. When the North American transit backbone “Fishbowl” models were discontinued, faith was again restored when General Motors Canada announced that GMDD would begin building its predecessor “The Classic,” a face lifted and more powerful version of the original “Fishbowl” buses.
In the 1980s the Ontario Davis and Peterson Governments partnered, via government subsides, with GMDD to unveil the “Articulated Bus Project” or “accordion busses” which were designed to ease traffic congestion in major cities like Toronto by eliminating the number of buses on routes while maintaining and increasing ridership. Although only tested by the Toronto Transit Commission it was largely successful in cities like Mississauga. However GM’s financial health was becoming troublesome, and in 1987 the GM top brass was eager to sell off popular subsidiaries to other corporations to keep afloat. In 1987, the trademark GMDD bus division was sold to MCI Industries (now NovaBus, owned by Volvo’s Bus Division), which built large passenger coaches for Greyhound and GO Transit and continued building MCI “Classics” in London and later Saint-Eustache, Québec for a few more years.
General Dynamics Land Systems - London (1979-Present)
When the bus division at GMDD was sold off, the question of what to do with the now vacant GMDD-West Complex Plant became apparent. Once again, General Motors Canada stepped up to the plate and transitioned the plant towards another one of its corporate subsidiary partners, General Dynamics which builds military equipment in Canada for armed forces all over the world.
At the time the Department of National Defense and the Trudeau government had been looking for replacements to its aging fleet of Lynx tracked vehicle and procured a massive fleet of licensed Swiss designed Mowag Piranha amphibious and surface Light Armoured Vehicles (LAVs) common known as the “Grizzly” and “Bison” reserve support vehicles. The order was a huge boost for the company that built every one of the Detroit Diesel powered units at the London facility. Today, General Dynamics Canada continues to assemble, maintain, and support LAVs (Coyote, Stryker, ASLAV, NZLAV, or LAV III, etc.) vehicles in London. The London facility is currently the worldwide supplier and manufacturer of such vehicles; to date more than 7000 units have been built right here in Ontario!
Electro-Motive Diesel (2005-2012)
Formerly a subsidy of General Motors, Electro-Motive too was sold to private investors and privatized from the traditional General Motors’ family in 2005. In 1989, under General Motors’ ownership, Electro-Motive North American operations were consolidated in London, Ontario and became a self-sufficient locomotive manufacturing hub.
When it was sold in 2005 to private investment companies Greenbriar Equity Group LLC and Berkshire Partners LLC the London facility was the only Electro-Motive manufacturing facility left in the world. As such, London fulfilled all the orders for the global market building locomotive units for operators as far away as London and China. However it doesn’t end there. For decades, London continued to hold one of the highest quality ratings of any locomotive manufacturing facilities in the world achieving ISO: 9001 status.
When Electro-Motive was sold to Caterpillar’s Progress Rail group the alarm bells should have gone off in Canada. To some extent the bells did, but the guys that could do something, the federal government, did not act out of fear that modernizing the Canada Investment Act, and standing up to Caterpillar would scare away other companies that intended to harvest Canadian manufacturing potential and skill sets-only to then ship it all away! They should have known better; this isn’t the first time Caterpillar has kicked Canada and fellow Ontarians in the teeth. It seemed like Ontarians were just beginning to forget what they did in Brampton when the news of the Electro-Motive closing came down the pipe on Feb 2, 2012.
We were blind-sighted; now its time to act to prevent future aggressive cultivation takeovers. We should start by modernizing and amending the Canada Investment Act. Secondly, we should impose tariffs on Caterpillar equipment, despite the claim from some economic Conservatives, that this won’t hurt CAT and will only endanger dealership jobs in Canada. I highly disagree, Caterpillar is not the only, nor is it the best, heavy equipment manufacturer in the world. There are plenty of companies including Terex, Liebherr, Demag, Mowag, Volvo Construction, JCB and Hitachi that given the same opportunity our government gave to CAT, would probably contribute more to the Canadian economy than CAT ever has! Proof of such “Anti-CAT” sentiments can be traced back to the Government of Ontario’s recent musings about possibly cancelling a massive $54 million dollar Metrolinx tunnelling equipment contract with Caterpillar. A contract that has the potential to quite literally bulldoze the massive the massive profits CAT has been enjoying from such massive Canadian infrastructure projects.
Andrew Coyne of the National Post likes to claim, “EMD London was never ‘our’ plant.” I would remind him that 100% of Electro-Motive’s global locomotive assembly operations were in OUR province (EMD La Grange, EMD San Potosi and EMD Muncie are a joke in comparison), WE made Electro Motive profitable, WE (Canadian Pacific, Canadian National, Via Rail, BC Rail, Ontario Northland Rail, etc.) invested in Electro-Motive partially because of the quality they possessed and the fact they were built right here by Canadians, WE stuck it out for 52 years- lasting longer than any of its multiple American owners ever did! I think that gives us, the people of Ontario, a pretty significant claim to OUR plant! We didn’t choose them, they chose us! Never in my life have I seen a more disgusting act of aggression, provocation, and lack of good faith bargaining as that between Caterpillar and the good people of London, Ontario.
Thankfully, traditional Canadian complacency on such egregious behaviour has not prevailed as it often has in past, similar scenarios. Across this country private construction operators, dealership owners, and even multi-million dollar Canadian corporations like Mark’s Work Warehouse have already begun pulling, boycotting, and cancelling CAT equipment and merchandise contracts, and I encourage you to do the same with your personal business transactions. Ordinary citizens across this nation have committed to the boycott and thousands of everyday Canadians have even burned their CAT baseball caps, torn up their CAT sweaters for tattered scrap rags and have already thrown out their once treasured CAT boots. The best part is Canadians are only getting started!