GM Diesel in London used to be considered a good gig. Had an interview there once. Didn't hear back. Four months later when they called me in for my physical I was busy with something else.
That was somewhere in the early nineties. GM Diesel was a General Motors sideline that didn't get a lot of attention from the hundreds of vice-presidents at head office. They were too busy brain-storming up crap like the Pontiac Aztec to sweat a little locomotive sideline.
In 2005 GM got out of the locomotive business. They had wanted to sell to Caterpillar but the deal was vetoed by the unions, the UAW and the CAW. So they sold to a couple of hedge funds instead.
Five years later the hedge fund boys doubled their money by selling to, guess who, Caterpillar! If you're a suit at Greenbriar or Berkshire Partners, you don't give a shit what the union fellows think. It's not like you're going to need their cooperation tomorrow.
Now that Caterpillar is in the driver's seat the fun has begun. They've locked out that London plant. Want the CAW lads to take a 50% wage cut. The UAW guys at their new locomotive plant in Indiana have already settled for the lower wage structure. The message is simple. You can keep your job at half pay, or you can have no job; we can easily build this stuff in Indiana.
Caterpillar also has facilities in Mexico. When the next contract comes up in Indiana, you can guess what the simple message will be that Caterpillar has for the Indiana workers.
It's called the NAFTA effect.
Meanwhile, the suits at head office are doing very nicely for themselves. Doug Oberhelman took over the CEO office and had his pay quadruple to over 10 million. The outgoing top dog, Jim Owens, tripled his final year compensation as a way of thanking himself for his many years of visionary leadership. He took home over 20 million last year.
That too is called the NAFTA effect.
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