Emboldened companies, fed intervention will make 2013 a tough year for labour

© Ford Motor Co.

MONTREAL—After nearly a year of searching for a job close to home, welder Garnet Cooke is preparing to leave family behind and follow the trail blazed by many other unemployed Ontario workers who have headed west in search of a new life.

“I have been in this field for 35 years (and) I don’t wish to take any more steps backwards,” says the 54-year-old laid-off Electro-Motive worker.

Dave Clark said he’s gone through various stages of grief since he too lost his job at the London, Ont. locomotive plant after 18 years.

“There’s some really bad news out there. People are splitting, families are breaking apart, some people are filing for bankruptcy already. It’s tough.”

Both men say they are examples of the struggles that many Canadian workers have faced over the past year as employers try to squeeze out costs in the face of a weak economy.

While the creation of Canada’s largest private sector union is intended to strengthen the position of labour in 2013, observers—including union officials—say it will still be a challenging year given economic conditions.

Cooke said his life has been turned upside down since U.S. heavy equipment giant Caterpillar Inc. closed the Electro-Motive plant early this year. It relocated to Indiana after workers refused to accept a 55 per cent cut in wages and benefits.

He’s gone from earning nearly $35 an hour to living on $850 every two weeks from employment insurance.

“If it wasn’t for the fact that I had my next older brother move in with me to help alleviate some of the bills and the stress of having to pay full rent, I don’t know what I would be doing right now,” he said in an interview.

Workers received $1,500 parting cheques and severances ranging from $13,000 for those with three years’ service to $148,000 for employees with 30 years on the job.

As an older worker, Cooke says he sees few job opportunities as companies prefer younger workers willing to take deep wage discounts.

So Cooke is working on his red seal—an interprovincial stamp on his welding certificate—and plans to head to the oilsands in Fort McMurray, Alta. From there he’s willing to criss-cross the country back to his birthplace in Nova Scotia if he can secure a job with Irving Shipbuilding, which won a huge government contract.

Clark said his anger has turned to hope as the former General Motors employee awaits for his name to be called from a preferential hire list that will give second-chances for work in Oshawa, Ont., to about 145 of Electro-Motive’s 481 laid off workers. GM sold Electro-Motive in 2005.

“I’m very fortunate, very blessed to have that, but in the meantime I have to survive until March, April to get my call,” the 49-year-old father of three said.

The head of the Canadian Auto Workers union said Electro-Motive is a painful example of the labour climate in Canada, where companies feel emboldened to seek deep cuts in wages and benefits—some earned through decades of negotiations.

“They have a confidence level that I’ve not seen in my 35 to 40 years,” Ken Lewenza said from Toronto.

In addition to cutting wages and benefits, companies are routinely trying to move workers from costly defined benefit pensions, which guarantee payments in retirement, and are imposing two-tiered models where new hires earn less and have to contribute more towards their pensions.