Subject: Media Advisory - CAW President Demands Ottawa Release Details of Caterpillar Purchase, Close Loopholes in Investment Canada Act

 Media Advisory for National Comprehensive distribution

 CAW President Demands Ottawa Release Details of Caterpillar Purchase, Close Loopholes in Investment Canada Act

February 10, 2012

(Toronto) CAW National President Ken Lewenza calling on the federal government to release detailed financial data associated with Caterpillar’s 2010 acquisition of Electro-Motive Canada.

That acquisition went ahead without being formally reviewed under the Investment Canada process, purportedly because the Canadian company was too small under the regulatory threshold (which was $299 million for that year).  But no public, independently verifiable data was provided to support that claim, and it is not clear that federal officials ever checked the accuracy of the claims submitted by Caterpillar (through its subsidiary Progress Rail).

Lewenza noted that Caterpillar’s own financial statement reported $1.3 billion (U.S.) in assets associated with its takeover of the entire Electro-Motive business.  Electro-Motive’s Canadian subsidiary represented its largest and most strategic asset, and almost half of its total employees.  “Unless this data is divulged and independently authenticated, we’re simply taking Caterpillar’s word for it that this acquisition was not subject to Investment Canada review,” Lewenza said. “That’s no way to deal with powerful, self-interested corporations like Caterpillar. Corporations cannot be left to police themselves.”

In a letter to federal Industry Minister Christian Paradis (who oversees the Investment Canada process), Lewenza has asked for the public release and independent verification of the data associated with the purchase. If that data turns out to be inaccurate, Lewenza noted, the government can impose penalties on Caterpillar up to and including annulling the acquisition.

The letter pointed out that the Minister and the federal government retain considerable policy flexibility to intervene in foreign investments that pose a danger to Canada, as demonstrated by its ad-hoc interventions in previous controversial acquisitions (such as MDA and Potash Corp.).

Lewenza’s letter also called on the government to strengthen regulations over foreign investment, including by:

The government must address the immediate circumstances of the Caterpillar case, while also taking on the longer-run task of strengthening the regulations, so that the terrible situation at Electro-Motive does not continue to repeat itself in other locations.

 “Failure to act by your government reflects not legislative weakness, but a political unwillingness to defend Canadian citizens,” said Lewenza.

 Lewenza’s full letter to Minister Paradis can be read here: http://www.caw.ca/en/10948.htm

 For those of you who love Twitter, or can’t get enough of facebook – lend a few key strokes to the fight against the lock-out of Electro-Motive workers in London!

Friday Jan062012 From The Sister`s of St. Joseph`s Web Site written by Sister Sue Wilson

Electro-Motive: Part of Bigger Picture

Friday, January 6, 2012 at 09:42AM

There is a certain synergy that is created when events happen at the same time. For the past week or so, three events have been coming together in my mind and heart: 

First, London’s Electro-Motive strike in which Caterpillar Inc. (which benefitted from a federal government subsidy) offered workers a deal that would cut workers` wages and benefits in half, all done in the midst of fears the company plans to move production to a low-cost U.S. plant, and all done in the midst of record profits for Caterpillar Inc. It is another example of how the middle-class in Canada is being undermined.

Second, the report from the Canadian Centre for Policy Alternatives which revealed that the highest paid CEOs in Canada pocketed an average of $8.38 million in 2010 - a 27% increase over the average $6.6 million they took in 2009. This means that Canada’s 100 elite CEOs are now making 189 times the average Canadian wage. This matters, not because there are 100 crazy-rich people, but because it is part of a steady trend that points to an upward redistribution of wealth.

Third, there has been a request for public input into the Social Assistance Review Commission in Ontario. (Background Note: In tandem with the introduction of the “workfare/work-first” model in the mid-1990s, social assistance benefits were cut by 22%, which made it virtually impossible for those who accessed social assistance to pay the rent and put food on the table. Small increases since then have not even kept pace with the rate of inflation. At the same time, endless rules keep people constantly jumping through hoops rather than finding some solid ground on which to build their lives anew). It is clearly a system that is not only broken but also unjust and punitive in nature: Consider that the provincial government is planning a $4 billion tax cut for corporations while giving a 1% increase to people accessing social assistance - all done while the maximum rent increase for 2012 is 3.1%, grocery store prices have increased by 5%, and London’s unemployment rate skyrocketed to 11.2% and currently remains high at 9.6%. If there was ever a time for people to stand up for each other, this is it.

As I consider these events together, they point to four different facets of the growing gap between rich and poor: decline of the middle-class, unbridled profit-seeking of corporations and corporate elites, upward redistribution of wealth, and the social exclusion of people living in deep poverty. These four facets make it clear that the current social and economic trajectories are both unjust and unsustainable. Too many people are being excluded from the benefits of the economy and it is tearing at the fabric of society. 

It’s time for a new social deal. But we’ll only get it if we choose solidarity with each other. Let’s refuse to give in to the cynical attitude of “better them than me.” Let’s trust in the mystery of shared power - the power that emerges from cherishing our connectedness - and let’s join with each other to create the kind of change that benefits everyone. 

Sue Wilson, CSJ