LONDON, ON, Feb. 23, 2012 /CNW/ - Progress Rail Services Corporation (PRS) today announced that it has concluded an agreement with the Canadian Auto Workers union on terms of the orderly closure of Electro-Motive Canada's (EMC) London production operations. The agreement, which was ratified today by union members, provides a full settlement of all claims and grievances, present, past and future, that the union or any bargaining unit employee may have against the company.
The severance package provided for under the agreement significantly exceeds the requirements of Ontario employment law. The law requires only one week's pay per year of service and does not provide severance for employees with less than five years tenure. Ontario law also caps severance at 26 weeks of service. In contrast, the company will provide severance payments to all bargaining unit employees equal to three weeks of regular pay per every year of service, with no cap imposed on them. Seventy-five EMC employees who would not otherwise be eligible under the law, will therefore receive severance benefits under the agreement.
The company will issue severance payments and ratification bonuses within fifteen days. Individual severance amounts will range from a low of about $13,000 (3 years service) to a high of about $148,000 (30 years service). All bargaining unit employees will receive a $1,500 lump sum ratification bonus plus limited company-paid healthcare benefits. The company also will complete funding of the employees' pension trust. EMC will make a payment to the union of $350,000 to fund settlement of all grievances, establish an adjustment program and cover representation costs for bargaining unit employees.
EMC's focus is now on the orderly closure of the London production operations. We expect the union to abide by a closure agreement that supports a safe and orderly wind-down of the facility.
While it is regrettable not being able to reach an agreement with the union that would have sustained the London plant, EMC is pleased that the parties were able to successfully negotiate a generous severance agreement for represented employees. We wish them all the best for the future.
About Progress Rail:
Progress Rail Services, a wholly owned subsidiary of Caterpillar Inc., is a leading supplier of remanufactured locomotive and railcar products and services to the railroad industry, operating one of the most extensive rail service and supply networks in North America. We serve our customers through a network of more than 150 locations across the United States, Canada, Mexico, Brazil, Italy, Germany, and the United Kingdom, with more than 5,500 employees. Progress Rail Services is headquartered in Albertville, Alabama.
Through its acquisition of Electro-Motive Diesel, Progress Rail has expanded its network of global locations, furthering its commitment to providing industry-leading products and services. Founded in 1922, Electro-Motive Diesel is an original equipment manufacturer of diesel-electric locomotives. Headquartered in LaGrange, Illinois, EMD designs, manufactures and sells diesel-electric locomotives for all commercial railroad applications and is a global provider of diesel engines for marine propulsion, offshore and land-based oil well drilling rigs, and stationary power generation. The company is the only diesel-electric locomotive manufacturer to have produced more than 72,500 engines and has the largest installed base in both North America and worldwide. EMD also has an extensive aftermarket business offering replacement parts, maintenance solutions and a range of value-added services.
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Anne Marie Quinn