Saturday, 4 February 2012

Caterpillar And My Free Market Plea...

What a hysterical, irrational and self debasing reaction I am observing with respect to the Caterpillar closure.
Ontario Minister: Caterpillar Behavior In Plant Closing "Shameful"

"I think it's shameful that this company made so little effort to get out and make a fair and balanced deal with the workers," said Ontario Labor Minister Linda Jeffrey in an interview"

 Caterpillar shutdown: U.S. company bails from London, Ont.’s Electro-Motive Diesel plant

 On Saturday, Progress Rail will hold a Muncie job fare at Delaware Hall, where welders will line up for jobs paying $14.50 an hour and assemblers can hope to be taken on for $12, scrabbling in the global race for ever-lower wages.
 The timing is so neat, the entire operation so surgical. Caterpillar has padded away from the entire affair without, insultingly, saying a word and without, clearly, bargaining in good faith with those who helped the company deliver its best performance in 65 years. As an analyst said last week, the company just doesn’t care, a point that makes the analyst quite happy, by the way. It was, after all, a blowout year for the company.
Caterpillar will move its operation to Indiana, where Right-to-Work policies drive down wages and working conditions. "It is astounding how easily the Harper government has given up on those jobs - on Canadians who expect their government to fight for them. This company never negotiated in good faith and used the lock-out as a pretext to close the plant. This sets a bad precedent for the future of Canada's labour relations, which may give rise to similar tactics by other employers, unless immediate action is taken by governments."
And finally, a commenter from my previous blog entry on the subject:

I feel sad for you people who just don't get what it's all about, would rather kiss-up to the wealthy 1% than find any compassion for the children who will suffer as a result of this. Caterpillar made *billions* of dollars last year. There is no need for them to demand a cut in wages, to shut down a factory. It is a completely heartless move. And children will suffer. It is *never* a child's choice to suffer! But you seem to be ok with that. Shame on you!

Let's work through some basic, obvious points:
     1. The capital behind the company is owned by...shareholders.  Not true is the socialist myth that the workers share in the ownership.  When was the last time a company went bankrupt and the workers liquidated their personal assets and paid the debt off?  The board of directors directs the company's strategic operations via appointing a CEO who in turns appoints management.  People make decisions.  Follow the money trail and the shareholders 'own' Caterpillar.  These three words put together might really bug and annoy many, but it's true. Shareholders own Caterpillar.
     2. Stewarding that which you own is good, not evil.  Who works hard for a car and destroys it on purpose, for no purpose?  Who spends Saturday mornings messing up their house? Did you ever go to a guests house and say, "Thanks for inviting me over, but I think you are really evil because you did a really, really, really good job cleaning your's too clean."?  We are typically honoured when someone cleans a house in lieu of our arrival.  Stewarding that which you own is good. 
     3. The group/person that owns resources has authority to decide how to steward the resources. (Pending you do not break any laws.)  If you buy a hockey card, you can choose to rip it up or you can choose to protect it and cherish it.  This is the beauty of ownership; it's your choice.  You cannot however, put sharp knives on the end of the card and throw it like a ninja star into the eyes of your nemesis (that would be assault and breaking the law).
     4.  Okay, here's the big jump...
Caterpillar stewarding that which it owns is good (not evil) and it's their choice as to how they steward their resources.
If 1. 2. and 3. are true, then it only makes sense to say the following:
Shareholders who own Caterpillar vote on directing the company resources and they choose how to best fulfil how they define 'good steardship'.  Pending they do not break any laws, it's their choice, not ours as to how they decide to allocate resources.  Just like it's your choice to rip your hockey card or keep it protected.
     5. To the Ontario Minister, they did make a fair and balanced offer.  Remember, $12-$14 is what they can get.  So they have to 'tip the balence' by offering the same...which it appears they did. Is the Minister's definition of balance some kind of anti-free market entitlement offer?  If so, he better wake up to reality. $12-$14 is what they can get.
     6. The logic of 'they are making huge profits therefore they should give more money to the workers' is as stupid and silly as me saying to my dinner host, "You should really mess up your house a bit because it's too clean and it makes me feel like the cleanliness of my house is insufficient...let's balance this out a bit".  Their drive to excellence should not be my escape into justifying bitterness, envy and entitlement.   My host can choose to steward her property how she chooses without fear of being judged for how she defines excellence.  It's her property. It's Caterpillar's resources.  Where is all the 'judge not' lingo now? 
Final Comments:

     Let's say you own a home and hire a lady to clean for $30/hour @ 8 hours per day.
5 years later, another lady offers to work for $20/hour and says she can do the job in 4 hours.
Who do you hire?
What if some groups protest, cry, whine and demand the owner of the house keep the first lady at $30/hour x 8 hours per day?  Would you keep the more expensive person?  Regardless of your choice, the bottom line is that it's your choice.  I respect your choice.  Please respect mine.  Please respect Caterpillar's.
     What if the same groups say, "you are making lots of money, therefore you should keep existing employees for much more then what other employees are willing to work for."
Would you stick to your guns and hire the better value service?  If you managed your resources well and made good money, do you have an obligation to change your principles of money management to get poor value for your dollar?  Would the Minister be accurate in calling your choice to find better value, "shameful"?
     Like the commenter to my last blog, what if you are accused of hurting children and causing suffering?  I submit that it's not a home owner's job to cater to a particular cleaner for life. It is the homeowners job to get good value for a cleaning service. It is not Caterpillar's responsibility to raise children.  It's their job to build machines.  It's the parents job to raise the the tragedy of this particular commenter's opinion actually turns to the parents and puts them in the spotlight.  Parents of Caterpillar, you made a choice to work at Caterpillar and put your time and talents into a company you knew had a 'profit motive', what did you do to prepare for the inevitable move to a place where they can get the same service for half the cost?  I hope lots.
     With respect to welfare government handouts, that is your bone to pick with government, not Caterpillar or any other company for that matter.  (I would join you on that one!)
     The 08' recession was cruel and hard on my companies.  We almost went under.  I was tempted to 'blame' the free market and the 'evil banks', however I realised that got me nothing and nowhere.  I decided to learn, work hard and be thankful for what I have.  I am thankful surviving and do not take 1 day for granted.
     For the people critiquing Caterpillar, I encourage you to start your own company and pay more for a service (for whatever reason suits your fancy).  You will soon come to a sharp and real understanding about capital and it's value.  If you want to forgo that suggestion and simply call out the free market as evil, then I would say we can start the debate with the cards on the table.  Enough of 'loving capitalism' when a company chooses to invest and hating capitalism when that same company uses the same power of choice to relocate their capital.  If you want to help the city of London so much, take your capital and invest it there.  The people who call out Caterpillar for not investing millions in London are almost always the same people who invest $0 themselves.   It's easier to invest/risk $0 of your own money and judge another company for how they handle their millions invested. The hypocrisy is incredible. 
     Here is the letter I would write if I were just fired:
(I have lost customers before and this is exactly the attitude I have taken with them...even though it hurt me greatly inside)
Dear Caterpillar,
Thank you for risking capital to employee me.  I received fair wages for my time and talents and I respect your choice to relocate capital elsewhere based on your ability to find the same service for less.  I have leaned through this process to be grateful for what I have.  I am thankful that I can take my skills and talents to the open market where I will be compensated fairly.  If us union workers think we got ripped off, I love the fact we can pool our money together and start our own company where we can compete in the open marketplace.  Hey, we may be your largest competitor one day.  Thank you for teaching me how to use my skills to further my life. 

Best wishes
Ryan Jantzi,
Former Caterpillar Worker


  1. There are other obvious points the media and union won't mention. 1)The company made the contract offer with concessions, the union refused the offer.
    2)The company requested the union submit a counter proposal, which they refused to do. 3)The union mislead the public, as to the size of pay cut, as well as pension and benefits. 4)Lewenza insisted roght from the start of negotiations he only would negotiate a plant closing agreement. 5) The original contract was extended six months, ending in January, to allow the union to come up with a counter proposal, something they again refused to do.

    Her is the actual contract offer:

  2. The good news - if you have portable skills, Western Canada is looking for qualified, skilled tradespersons. You will be welcomed with open arms. Cheers.

  3. The scumbag liberal party are in no position to tell anyone how to manage their finances, and as for Harper salvaging their jobs you idiots it is the taxpayer not the government and I do not want to help save your jobs you didn't.

    1. Odd jerkoff, your PM saved GM jobs when he bought it.

    2. Hi Anonymous 4:39: Great point, less the name calling. Please consider re-posting with something that upholds your point.

  4. True story, several years ago my cousin was working for a transportation outfit. They want him to transfer up north, which he agreed to (unmarried at the time)but they never transferred him for whatever reasons. He stayed with company, married, with the transfer still in the works. Never came, he built a house, moved in and became a father. Then, out of the blue, the transfer came thru and he said NO. They said your fired, along with another man in the same situation. Fine, they said. Next they heard the company was for sale, and they bought it, fired the honcho who fired them and went on to build a very successful business that is still going. After 20 yrs, the partners had a falling out and it was decided one should buy the other out. Lawyer got involved, told them to make their final offer. My cousin sold his share, and he said, the other guy thought the company was worth more than I did, so I took his offer. Maybe those union workers could find some company to buy and learn to live in the real world. I blame Ken L for the loss of these jobs. Did the workers know the union was to make a counter offer and refused. Hope the very skilled in the bunch come to AB where there is a crying need for said skills.

  5. You mean swap McLiar for Red Ali, maybe after the election as they will not be sure who is going to win. It seem a lot of Albertans like Ali.

  6. The MSM and Liberals never mention the significant increase in the cost of electricity , which would obviously impact the EMC operating costs.

    Also the union is either totally incompetent or they really don't give a damn about the employees , or BOTH.

    Caterpillar bought EMD (Electromotive Diesel) in 2010.

    The London operation performed some final assembly and system test of completed units.

    The Liberals and union cannot blame Harper as the US-CAD exchange rate was 1.03 (June 2010) and has remained more or less constant. Increased operating costs due to electricity rates is a gift from McGuinty , along with perhaps additional regulations , and the election of Obama (cheered by unions on both sides of the border) which heralded "buy American" policies.

    That the union could not see the impending train wreck (no pun intended) thinking that it was business as usual is hard to believe.

  7. I've heard a lot about this issue,but am not clear on WHAT exactly,labor leaders expected Harper to do. Was Harper to simply bail out the company,as he did with GM, costing taxpayers millions for the sake of the jobs of the entitled few?

    Or was he supposed to enact new anti- free trade laws forbidding a company to leave Canada? If it's the latter,the Union is delusional,as every branch plant in Canada would shut down the day the legislation cleared the House.

    So,what did the Union bigmouths expect Harper to do? It was a private matter between management and labor,none of the government's business. Had the government done a bailout,I would be extremely angry,enough to tear up my Party membership card.

    The company I work for has no projects on the books after we finish the one we're on. There's only about a dozen of us,so should we expect a bailout,too? Or is that only for Union shops?

    What a farce this whole thing has been. Harper did exactly what he should have;nothing.

  8. As I understand it, the plant is there, the equipment is there and the workers are there. Why does not the government take over the plant, turn it over to people able to produce a product, keep the unions out of it, come up with a fair wage,and go into competition with Caterpillar?

    This equipment is still needed in the oil patch. Am I out to lunch here?


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