Is Buhler bluffing?

New owner bullies workers and Manitoba government, threatens to take Canada's last tractor company to US

By: Todd Scarth

  WINNIPEG: A bitter labour dispute at Canada's last farm tractor plant keeps taking turns for the worse. More than 200 employees, all with at least 22 years' experience, are locked out. Company owner John Buhler is threatening to move the operation south to the US, where wages are low and unions are scarce. He's dying to bust the union, but would he go that far? Is Buhler bluffing?
  In January, only six months after buying Winnipeg's Versatile tractor plant, John Buhler announced his intention to move it to Fargo, North Dakota. At the time, workers in the plant were on strike, so Buhler's announcement seemed like it might simply be part of his bargaining strategy.
  The next day, Labour Minister Becky Barrett appointed star mediator Wally Fox-Decent, an appointment that was greeted with joy by both sides. "Wally will be able to convey the truth," Buhler predicted.
  When the mediator submitted his report two weeks later, however, it was promptly rejected by Buhler.
  The strike continued until about a month ago, when the workers who had been on the picket line for almost five months took the remarkable step of voting to end their strike. Buhler's response? He locked them out, demanding the right to cherry pick which employees he takes back, rather than do so by seniority.
  The union has taken the company to the labour board, arguing that it was bargaining in bad faith.
  The result, for now, is a stalemate, throughout which Buhler continues to flex his muscles. Last week he ran ads in North Dakota newspapers, advertising machinist jobs for his non-existent US plant at $8 - $10 an hour, far below market wages.
  If he were to relocate south of the border, Buhler would receive 100-percent exemptions from both property tax and corporate income tax for five years. Even better for the slavishly anti-labour Buhler, North Dakota is barren ground for unions, largely because of its "right-to-work" laws.

History
  The Versatile plant has been an important part of Manitoba's economy for about half a century. It currently employs about 250 unionized workers, and several hundred more non-union staff. It is estimated that the plant contributes to 2,000 spin-off jobs in the community.
  The plant has had a number of owners over the past 15 years. Last summer, the US Justice Department forced the sale of the plant for anti-trust reasons after its previous owner, New Holland Industries, merged with another multinational farm equipment manufacturer.
  When Buhler appeared to be the only serious bidder, US officials at first rejected the offer, believing that his was too small a company.
  Buhler lobbied hard to purchase the plant, and received help from Ottawa in the form of diplomatic pressure.
  With the purchase, Buhler also took over responsibility for a loan the previous owners owed to Industry Canada.
  That loan has been partially paid down, and Buhler now owes $32 million. However, the deal the Feds cut with the plant owners seems to have been an extraordinarily shoddy one, with almost no conditions attached.
  Federal politicians have taken to arguing the Buhler has a "moral obligation" to keep the plant in Manitoba. True enough‹but also evidence of how little real leverage they have here.
  So what's this all about? Buhler claims he is being forced to move the plant, because it is too big, the market is weak, and because union wages are too steep for him.
  It is true that the world agricultural market is weak, but it will eventually strengthen ­ as it always does. When he purchased the plant, Buhler knew full well the conditions of the market and the size of the plant.
  He also cut a deal to sell a guaranteed number of tractors to the company he bought it plant from. Buhler's president even says they "plan on making tractors for the next 50 years."
  And he has a strike clause with the previous owner, which required them to cover Buhler's costs during the strike.
  Last year Buhler's company had sales of $117 million, with net earnings of over $7 million.
  So, for the real reason behind Buhler's behaviour, we have to look elsewhere: to his reputation as a "vulture capitalist." In this case, it appears that that phrase couldn't be more accurate.
  His plan, it seems, has always been to swoop in, pick up the plant that had come up for sale in unusual circumstances, then ship it across the border before the ink was dry on the bill of sale.
  As a result, an economic institution, and hundreds of good jobs, are on the verge of being ploughed under.

Todd Scarth is Director of the Canadian Centre for Policy Alternatives - Manitoba. The Manitoba Centre offers a free bulletin called FastFacts - high-quality, original, Manitoba-based research, distributed frequently by fax or email.

Posted: April 24, 2001

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