MUNCIE, Ind.—Bulldozing its way through a high-profile dispute over wages, Caterpillar Inc. said Friday it will close a 62-year-old plant in London, Ontario, that makes railroad locomotives, eliminating about 450 manufacturing jobs that mostly paid twice the rate of a U.S. counterpart.

Caterpillar's decision, ending a standoff with locked-out workers huddled around barrels of burning scrap wood outside the London factory gates, may benefit another downtrodden manufacturing city: Muncie, Ind., where Caterpillar last year opened a locomotive plant and where it is trying to fill jobs at about half the pay workers in Ontario received. At a job fair in Muncie Saturday, Caterpillar will be offering jobs at that plant at wages ranging from $12 to $18.50 per hour. Wages for most workers at the Ontario plant are about 35 Canadian dollars an hour (US$35.03).

"The cost structure of the operation (in Ontario) was not sustainable and efforts to negotiate a new, competitive collective agreement were not successful," Caterpillar said in a statement Friday morning. It added: "The gulf between the company and the union was too wide to resolve."

The Canadian Auto Workers union, which represents the workers, called the move "truly rotten behavior. They are immoral, they are unethical and they are greedy," said union president Ken Lewenza in an interview. He said he believed the company had no intention of keeping the plant open and demanded steep wage cuts that weren't acceptable to the union. Caterpillar, he said, informed him of its decision 10 minutes before it issued its news release. He was also angry at the federal government of Prime Minister Stephen Harper and the provincial government for not intervening.

"We sympathize with the workers in London," said Richard Walker, a spokesman for Canada's industry ministry. He defended the federal government's record of protecting Canada's manufacturing sector but said the dispute was regulated by the provincial government of Ontario. Linda Jeffrey, Ontario's labor minister, said in an interview that the ministry's mediators "tried over and over again" to get Caterpillar back to the bargaining table. "I think it's shameful that this company made so little effort to get out and make a fair and balanced deal with the workers," she said.