Why jobs leave this country…or return

On Friday, Caterpillar announced the closing of a locomotive plant in Ontario, Canada.  The plant had been the site of a weeks long lockout over wages and benefits.  To remain competitive with the likes of General Electric, Caterpillar wanted concessions, but the Canadian Auto Workers union refused.

Where are these jobs going?  Right now, it looks like Muncie, Indiana where Caterpillar opened a plant last year.  At a recent jobs fair in Muncie, Caterpillar was offering jobs at $12 to $18.50 per hour, whereas it was paying an average of $35 dollars in Canada.

Caterpillar has made it clear it hopes to avoid any union representation at the Muncie plant.  Last year, an online job advertisement published by the company sought human-resources managers with ‘experience with providing union-free culture and union avoidance.’

That task will be a bit easier now as last Wednesday, Governor Daniels of Indiana signed into law a bill making Indiana a “right to work” state.  Unions are more than welcome, but, no union contract can demand that all union workers pay union dues.

The Canadian Auto Workers union…called the move ‘truly rotten behavior.  They are immoral, they are unethical and they are greedy,’…

Greedy?  No company is in business to lose money, and if they do, they won’t remain in business very long.  Let’s look at the results of Caterpillar’s decision.  Caterpillar pays federal income taxes on its “greedy” profits.  The larger the profits, the more the tax.  Given our deficit, this is good.

If it can sell locomotives at a price cheaper than its competitors, it will sell more locomotives.  To do so, it must hire more workers to build those locomotives.  Given our economy, this, too, is good.

It would appear that the CAW doesn’t understand this.


Posted in ,


The Sound Off Sister was an Assistant United States Attorney for the Southern District of Florida, and special trial attorney for the Department of Justice, Criminal Division; a partner in the Florida law firm of Shutts & Bowen, and an adjunct professor at the University of Miami, School of Law. The Sound Off Sister offers frequent commentary concerning legislation making its way through Congress, including the health reform legislation passed in early 2010.


  1. steve418r on February 5, 2012 at 7:25 pm

    For years organized labor has gone to in its quest for more wages, more benefits and less work. Then they pretend they don’t know why jobs are outsourced and leaving the country. All in the name of “fairness” which actually translates to “greed” in their language. There was a time when management had to much leverage over the workers. That pendulum has swung? in the opposite direction, broken off and is headed into outer space now.

  2. wombat319 on February 5, 2012 at 7:33 pm

    This is EXACTLY the point I’ve been trying to make to union members–including some in my own family–for YEARS! I worked in a corporate environment and understand WHY jobs come & go…and unions do NOT help! Governor Malloy isn’t helping things either with his unConstitutional mandates!!

  3. ricbee on February 6, 2012 at 12:20 am

    I was an officer in a union for many years & we worked in cooperation with the management,even conceding to the company in hard times. It wasn’t long after we joined a national union that our work rules changed & we were doomed to fail. I couldn’t stand seeing my friends getting laid off,week after week & got out? after 20 years & now collect a little pension-from PBGC,because the” World Leader? in work holding devices” went under.

  4. JBS on February 6, 2012 at 8:02 am

    Unions are a parasitic anachronism. National unions have a huge overhead which has to be paid by the local union, which has to be funded by, you guessed it, the company where the union operates. Those national union presidents, vice-presidents, labor relation specialists, contract negotiators, lawyers, etc., add no value to the company or to the local union. The national union only sucks money from the local union and the company. Add to that the national union rules. All for the perpetuation of the national union.
    Plus, unions carry a lot of dead weight in pensions, employees, stewards, local officials, etc.
    No wonder companies fail under union tyranny.

  5. Dimsdale on February 6, 2012 at 9:11 am

    Unions are parasites that kill the host.? A lose-lose proposition if there ever was one.

  6. Murphy on February 6, 2012 at 12:16 pm

    Good thing Indiana didn’t elect Obama Governor there , OOPS I meant Malloy.

  7. JohnK on February 6, 2012 at 1:36 pm

    Been following this story on a railroad related site. ?Locomotives are a big ticket capital investment. ?The Class 1 roads will buy 100s at a time. ?The small lines make do with the cast offs or rebuilds. ?It is a cost sensitive industry. ?Cat is doing what it has to to be competitive with GE and the smaller US builders. ?

    They are also trying to compete in Global marketplace. ?Both GE and Cat build and sell their locomotives and other products on a worldwide basis. ?I would rather see them built here and exported, than see the job exported.


  8. Lynn on February 7, 2012 at 7:59 am

    The lesson I learned is that CAT went to Indiana, where Gov. Mitch DANIELS signed a bill to make Indiana a “right to work” state.? Do you think any other governors will learn this lesson, or will we all have to move to Indiana to get jobs? Gov. Mitch Daniels for president in 2020.

    • Dimsdale on February 7, 2012 at 9:05 pm

      I just wonder if any CT companies will make the move.? I know Electric Boat keeps trying to get out….


The website's content and articles were migrated to a new framework in October 2023. You may see [shortcodes in brackets] that do not make any sense. Please ignore that stuff. We may fix it at some point, but we do not have the time now.

You'll also note comments migrated over may have misplaced question marks and missing spaces. All comments were migrated, but trackbacks may not show.

The site is not broken.