Caterpillar closing tunnel-boring plant, 330 employees to lose jobs

[canada-man]

what's this all about?


TORONTO - Heavy equipment giant Caterpillar Inc. says it is closing a tunnel-boring machine factory in Toronto by mid-2014, throwing 330 workers out of a job.
Caterpillar acquired the facility in 2008 when it bought Lovat Inc. and got into the tunnelling business, but now says the plant is no longer a "strategic growth opportunity" and will be shut down.
Employees at the plant recently worked on four boring machines being used to chew through ground for the construction of the Eglinton-Scarborough Crosstown light rapid transit line in Toronto.
The company says the 330 workers are being offered a severance package as well as assistance to help them find new jobs.
It says the closure will not impact existing customer contracts, with parts and service support to be continued through 2016.
The closure comes after some 500 employees were let go when a London, Ont., locomotive plant owned by a Caterpillar subsidiary was shut last year after a month-long lockout over a wage dispute with workers.
A company executive said the Toronto tunnelling business is no longer a good fit for Caterpillar.
"We know this is difficult news for our employees and their families. We acquired a great team when we bought this company, and while they have demonstrated an ability to build quality products, the future prospects of this business no longer align with our expectations," customer and dealer support president Stu Levenick said in a release.


http://ca.news.yahoo.com/caterpillar-closing-tunnell-boring-plant-330-employees-lose-163400481.html

 

[yamaha r6]

Good for Cat to provide a severance package atleast, I know many people still struggling to find career jobs

 

[Mr Deeds]

Yet more industry and jobs lost because of greedy unions

 

[abv]

Yet more industry and jobs lost because of greedy unions

It doesn't say that.

 

[my2cents]

Yet more industry and jobs lost because of greedy unions

Actually CAT got lots of money from the government then bailed in Canada. So more like the company will stay as long as the feds are paying.

 

[Aardvark154]

I can't imagine that the manufacture of tunnel-boring machinery is either high profit or of great demand.

 

[canada-man]

Actually CAT got lots of money from the government then bailed in Canada. So more like the company will stay as long as the feds are paying.

corporate welfare in action!

 

[George The Curious]

It is just starting.. labour cost in Canada with high Canadian dollars is losing comptativeness to South of border.
housing will be the next when people realize one toronto home cost 4 times that of average us cities.

 

[Mr Deeds]

It doesn't say that.

Read the press release it said They are shutting down the operation because of high labor costs. Unfortunately its been happening for years our auto sector, our steel industry, even out finished wood products. Little by little we are loosing our manufacturing base for cheaper labor markets because of greedy unions who would rather see hard working people out of work than give a little. And of course greedy corporations who care about their share holders and their bottom line.

 

[abv]

but now says the plant is no longer a "strategic growth opportunity" and will be shut down.

I don't see any reference to labour cost at the Etobicoke plant. Only at their London operation.
I may be missing something. I'm tired.

 

[splooge]

No more subway boring machines in Toronto?

 

[FAST]

Its simple.

It is just starting.. labour cost in Canada with high Canadian dollars is losing comptativeness to South of border.
housing will be the next when people realize one toronto home cost 4 times that of average us cities.

Canada has the HIGHEST labour cost in car manufacturing in the WORLD.

IF,... the dollar was to fall to $.65 again, then we won't be loosing manufacturing (unionised at least) facilities at the current rate.

FAST

 

[George The Curious]

Canada has the HIGHEST labour cost in car manufacturing in the WORLD.

IF,... the dollar was to fall to $.65 again, then we won't be loosing manufacturing (unionised at least) facilities at the current rate.

FAST

Historical average for CAD is around $.80, it will probably overshoot a little, but I'd be happy if it reached the average.

 

[SchlongConery]

Canada has the HIGHEST labour cost in car manufacturing in the WORLD.

IF,... the dollar was to fall to $.65 again, then we won't be loosing manufacturing (unionised at least) facilities at the current rate.

FAST

More expensive than those built in Germany by Mercedes, BMW and Volkwagen? I understand that German wages, benefit costs and pensions are significantly higher in Germany than Canada.

 

[George The Curious]

More expensive than those built in Germany by Mercedes, BMW and Volkwagen? I understand that German wages, benefit costs and pensions are significantly higher in Germany than Canada.

Not true. per capita GDP both nominal and PPP is significantly higher in Canada than Germany. Luxury brands are still built in Germany, but VW are mostly built in Mexico since 10 years ago.

 

[great bear]

This thread is boring.

 

[SirWanker]

It is just starting.. labour cost in Canada with high Canadian dollars is losing comptativeness to South of border.
housing will be the next when people realize one toronto home cost 4 times that of average us cities.

Care to elaborate on your prediction or are you just cherry-picking to support your agenda.

 

[charmer]

This one has little or nothing to do with labour costs.

As with all acquisitions of foreign companies by a US brand transfer costs killed it and leave no room for profit in Canada. Transfer costs are very complicated, but simply... US tax law requires the parent company of a US corporation to apply extra costs onto the sub. These are called transfer costs. In effect they are the benefits to the sub that the parent's brand (in this case Caterpillar) as well as it's accounting, HR and anything else they can think of that is of benefit to the foreign company. (in this case Lovat...now Caterpillar). The US government collects taxes based on the extra costs added to a product(or service) that is either exported from the US to a sub...or on a product or service that is made and sold by a sub on it's own turf.

In order to pay for the extra taxes in the US, the sub get dinged with a higher cost. It's almost like an export tax.

It's the reason that us companies always charge more in Canada. Target, Wallmart, Gap...etc. Ever wonder why so many US restaurant chains fail in Canada. Transfer costs are one biggy.

 

[Phil C. McNasty]

This thread is boring

You really dug a hole with that post

 

[great bear]

You really dug a hole with that post

Yep, I have tunnel vision.