Caterpillar is gone... who's next?
The controversy surrounding the EMD shutdown doesn't address the heart of the matter: Caterpillar walked in and purchased a company for five years, after which they took all of the valuable intellectual property and shut the plant down. The worst part? They didn't break a single law. The leader of the NDP is now presenting a motion, brought by London Member of Parliament Irene Mathyssen, that states foreign investors must contribute a substantial net value to Canada.
The drawback of capitalism is that money equals power. Right now, an investor can flash money and be welcomed into the Canadian industry. The politicians making these deals have little motivation to ensure that companies don't take advantage of our foreign business incentives for a quick profit, because chances are they won't be in office when the company pulls out. Elected officials tout job creation at every turn. The building of the Dr. Oetker plant has created 430 jobs and the Ontario government's website called it "part of the McGuinty government's plan to create jobs and opportunities that will boost our provinces economy."
Prime Minister Stephen Harper and London Mayor Joe Fontana both have upcoming trips to China, where they hope to woo foreign investment. As an aside, Walmart already committed to spending $750 million on building new stores and upgrading old ones in Canada. In typical Walmart fashion, they'll claim job creation and consumer interests while London's downtown shops become fewer and farther apart. Apart from that foreign investment, which will continue the trend of Canadian's money being taken across the border, Harper and Fontana want to convince investors and companies that London is a good place for business.
So why should they come to London? As a relatively cynical person, my view on this is that a foreign investor would look at the London market in one of two ways: first, if Caterpillar got away with it, we can too. What's to stop the investors that our politicians are talking to from doing the exact same thing Caterpillar did? Even if legislation is passed to prevent a similar occurrence, it will be years before it is in place and, if the companies act fast, they could be exempt from those laws by a grandfather clause that would prevent the legislation from applying to contracts made before its passing. Second, if over 400 workers just became unemployed in a town where the unemployment rate is nearing double digits, how will anyone afford the products being made there?
I'm certainly no politician, yet the games our leaders seem to play with investors don't work unless everyone "plays nice," and for anyone to expect that of a corporation in this day and age is just ignorant.