Smack in the midst of a bitter labour dispute with employees of its London, Ont. subsidiary Electro-Motive, construction equipment giant Caterpillar announced it made a record $4.9 billion last year.

CEO Doug Oberhelman called 2011 “a great year.” Canadian Auto Workers union head Ken Lewenza said the company is making money “hand over fist.”

The Illinois-based firm announced Thursday that annual profits rose 83 per cent, to a record $4.9 billion. In the fourth-quarter alone, the Illinois-based firm earned $1.55 billion (U.S.). Its shares gained $2.30 to $111.35 (U.S.).

That, says Lewenza, makes it all the more “shameful” that the company is trying to squeeze what would amount to a 50 per cent pay cut from its 500 locked out employees.

Experts, however, say that squeezing every last penny it can out of its employees is exactly what every company tries to do, has been happening for years, and is something investors have come to expect and celebrate.

“The worker might look at it and say ‘why in the world would my job be at risk? The company’s making money,’” said Ken Thornicroft, law and labour relations professor at the University of Victoria’s Gustavson School of Business.

Simply being profitable isn’t enough to satisfy investors, says Thornicroft.

“It’s not about making profit, it’s about maximizing profit. Whether or not some people like it, that’s the bedrock foundation of a capitalist system. . . . The markets generally respond well to that,” said Thornicroft.

Cohn: The Caterpillar crisis is now Ontario’s crisis

Caterpillar locked out 500 workers at Electro-Motive after they rejected a contract offer that would have cut average wages at the plant from $35 per hour to $16.50 per hour.

The concessions Caterpillar is trying to get from its workers would make little difference to the company’s bottom line, said Mike Moffatt, an economist at the University of Western Ontario’s Ivey School of Business.

“In the larger Caterpillar picture, Electro-Motive is just so small. The difference they’re talking about with their workers is about $20 million to $30 million. For Caterpillar, that would be like you or I looking between the couch cushions and finding a quarter,” said Moffatt. “This isn’t a situation like the auto manufacturers a few years ago where they were asking for concessions because the survival of the company was at stake. Caterpillar is earning a lot of money,” Moffatt added.

Why, then, would they even bother picking such a public fight with the union? Moffatt suspects the company is planning to move the work to a plant in Muncie, Indiana.

According to labour relations expert Pradeep Kumar, a professor at Queen’s University’s School of Policy, Caterpillar is also putting on a show for investors.

“This is related to investor perceptions, which is that it’s beneficial for a company to be taking on its unions,” said Kumar. That perception is a cultural one which is almost unique to this continent, Kumar says. It allows, and in fact encourages companies to take the kind of “aggressive” stance Caterpillar has taken.

“We are virtually alone in North America in perceiving unions as not being helpful to a company. In the rest of the world, especially in Europe, unions are thought of as a positive force. Unions have been beneficial in terms of raising productivity, and stability, especially in the auto industry,” said Kumar.

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Caterpillar’s tactics are hardly unique, and hardly new, says Kumar, who pointed to a mid-90s dispute between General Motors and the Canadian Auto Workers, while the company was in what Kumar called “a pretty profitable situation.”

“They sent out a letter to employees asking for these concessions in the name of competitiveness, and at the same time they were paying performance bonuses to their executives because of all the money the company was making. That tells you all you need to know about their attitude toward unions,” said Kumar.