pitzerwm
Active member
U.S. manufacturing is an important source of payroll gains as average hours worked and earnings per hour both increased. U.S. manufacturing has become increasingly competitive in the past five years as the U.S. dollar has fallen and productivity surged. Many American companies are stepping up production in the U.S. relative to other countries. Canada must be wary of these developments. With weak productivity growth in Canada and strength in the loonie, we risk losing key manufacturing jobs to the U.S.
Two global companies, Caterpillar Inc and Rio Tinto PLC, are taking on Canadian unions that are already facing efforts by private and public sector employers to cut labour costs. Recent labour disputes at Caterpillar Inc-owned train locomotive company, Electro-Motive Diesel Inc in London, Ontario, show that the world’s largest maker of construction and mining equipment is prepared to take on the unions despite its big recovery in earnings over the past two years. According to media reports, CAW union officials said Caterpillar's latest proposal would halve wages and reduce benefits.
The company, however, says that wages and benefits at the Canadian plant are twice those of workers represented by the UAW at the Electro-Motive plant in LaGrange, Illinois. Canada’s competitive challenge could bolster U.S. manufacturing employment. Caterpillar is holding the U.S. up as a surprising example of cheaper and pliable labour.
Meanwhile, Rio Tinto Alcan, an aluminum-production unit of Anglo-Australian mining giant Rio Tinto, locked out about 800 union workers at a Saguenay-Lac-Saint-Jean, Quebec smelter. Truck maker Navistar International Corp. last August announced plans to close its Chatham, Ontario plant after failing to reach a collective-bargaining agreement with the CAW. At Air Canada, the pilots union last May rejected a proposed low-cost airline unit and pension changes. The union and airline have held further talks, assisted by a federally appointed conciliator amid threats of a strike by mid-February. The Canadian government prevented the airline's flight attendants from striking in October by seeking intervention by the Canadian Industrial Relations Board. The federal government also intervened in June to end a lockout at Canada Post, forcing postal workers to accept wages below what Canada Post had last offered.
Bottom Line: While a rebounding U.S. economy is good news for Canadian exporters, Canadian labour and domestic suppliers of goods and services must rise to the challenge of the newly crowned “low-cost producer” south of the border.
Two global companies, Caterpillar Inc and Rio Tinto PLC, are taking on Canadian unions that are already facing efforts by private and public sector employers to cut labour costs. Recent labour disputes at Caterpillar Inc-owned train locomotive company, Electro-Motive Diesel Inc in London, Ontario, show that the world’s largest maker of construction and mining equipment is prepared to take on the unions despite its big recovery in earnings over the past two years. According to media reports, CAW union officials said Caterpillar's latest proposal would halve wages and reduce benefits.
The company, however, says that wages and benefits at the Canadian plant are twice those of workers represented by the UAW at the Electro-Motive plant in LaGrange, Illinois. Canada’s competitive challenge could bolster U.S. manufacturing employment. Caterpillar is holding the U.S. up as a surprising example of cheaper and pliable labour.
Meanwhile, Rio Tinto Alcan, an aluminum-production unit of Anglo-Australian mining giant Rio Tinto, locked out about 800 union workers at a Saguenay-Lac-Saint-Jean, Quebec smelter. Truck maker Navistar International Corp. last August announced plans to close its Chatham, Ontario plant after failing to reach a collective-bargaining agreement with the CAW. At Air Canada, the pilots union last May rejected a proposed low-cost airline unit and pension changes. The union and airline have held further talks, assisted by a federally appointed conciliator amid threats of a strike by mid-February. The Canadian government prevented the airline's flight attendants from striking in October by seeking intervention by the Canadian Industrial Relations Board. The federal government also intervened in June to end a lockout at Canada Post, forcing postal workers to accept wages below what Canada Post had last offered.
Bottom Line: While a rebounding U.S. economy is good news for Canadian exporters, Canadian labour and domestic suppliers of goods and services must rise to the challenge of the newly crowned “low-cost producer” south of the border.
