Bloomberg News

Caterpillar, Rio Lock Out Canada Workers as Contract Talks Fail

January 03, 2012

Jan. 3 (Bloomberg) -- Caterpillar Inc., the world’s largest maker of construction and mining equipment, and Rio Tinto Group locked out workers at their plants in Canada over the New Year’s weekend after contract negotiations failed.

The Alma aluminum smelter in Quebec will cut output, for the second time, to one-third of capacity after 755 workers were locked out when their contracts ended on Dec. 31, London-based Rio Tinto, the world’s third-largest mining company, said yesterday in a statement. Caterpillar’s Electro-Motive unit kept workers out from a locomotive plant in London, Ontario as wage talks collapsed, the company, said on Jan. 1.

“The union’s changing positions have created an environment of uncertainty that is not in the best interests of the company’s employees, customers, suppliers and owners,” Electro-Motive said in the statement.

The Canadian Auto Workers, representing Electro-Motive employees, said it rejected an offer on Dec. 27 that proposed to cut wages in half, eliminate a pension plan and other benefits. The Canadian government should publish the commitments Caterpillar made under foreign investment law when it bought the Ontario plant in 2010, the union said.

The Alma smelter can produce 438,000 metric tons a year. The 755 members of Syndicat des Travailleurs de l’Aluminium d’Alma rejected the company’s final offer for a new labor contract and the old agreement lapsed at midnight, Rio said on Jan. 1.

The Rio lockout “has been coming for a long time,” Marc Maltais, president of the local union, told reporters on Jan. 1 in Quebec. “We are ready,” he said.

--Editors: Indranil Ghosh, Ryan Woo

To contact the reporter on this story: Greg Quinn in Ottawa at gquinn1@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net


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