Caterpillar has huge profits but lockout continues

The Toronto Star:

Smack in the midst of a bitter labour dispute with employees of its London, Ont. subsidiary Electro-Motive, construction equipment giant Caterpillar announced it made a record $4.9 billion last year.

CEO Doug Oberhelman called 2011 “a great year.” Canadian Auto Workers union head Ken Lewenza said the company is making money “hand over fist.”

The Illinois-based firm announced Thursday that annual profits rose 83 per cent, to a record $4.9 billion. In the fourth-quarter alone, the Illinois-based firm earned $1.55 billion (U.S.). Its shares gained $2.30 to $111.35 (U.S.).

That, says Lewenza, makes it all the more “shameful” that the company is trying to squeeze what would amount to a 50 per cent pay cut from its 500 locked out employees.

Caterpillar locked out 500 workers at Electro-Motive after they rejected a contract offer that would have cut average wages at the plant from $35 per hour to $16.50 per hour.

The concessions Caterpillar is trying to get from its workers would make little difference to the company’s bottom line, said Mike Moffatt, an economist at the University of Western Ontario’s Ivey School of Business.

“In the larger Caterpillar picture, Electro-Motive is just so small. The difference they’re talking about with their workers is about $20 million to $30 million. For Caterpillar, that would be like you or I looking between the couch cushions and finding a quarter,” said Moffatt. “This isn’t a situation like the auto manufacturers a few years ago where they were asking for concessions because the survival of the company was at stake. Caterpillar is earning a lot of money,” Moffatt added.

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