TORONTO -- American-based heavy equipment maker Caterpillar Inc. announced Friday it would close its Electro-Motive plant in London, Ont., a month after it locked out 450 workers. Caterpillar (NYSE:CAT) subsidiary Progress Rail Services says the cost structure at the plant was unsustainable.

The company had asked the employees to take a 50 per cent pay cut to help keep Electro-Motive going, but locked them out Jan. 1 when the Canadian Auto Workers union members rejected the proposal.

Caterpillar last week reported a 58 per cent increase in its quarterly earnings with a record profit of nearly $5 billion.

Ontario Economic Development Minister Brad Duguid confirmed the closure Friday, but had no details.

"We’ve heard that news, and our thoughts are with the workers in London, and that’s why we’re going to redouble our efforts to make sure we move forward with our southwest Ontario Development Fund," Duguid told reporters. "It’s too soon for me to be able to speculate on the reasons for their moving. I haven’t heard any rationale for it."

CAW President Ken Lewenza called the closure callous, but said it was not a total surprise.

"Caterpillar had no intention of keeping this plant open," Lewenza said in a statement. "From day one, we believed that Caterpillar was trying to provoke a crisis, by forcing deep cuts that were not possible."

The closure came just days after Premier Dalton McGuinty criticized the company during a speech in London, and after the province's Ministry of Labour tried to get the employer back to the bargaining table.

"So far the owners of Electro-Motive have failed to live up to Ontarians expectations,'' McGuinty told the London Chamber of Commerce Tuesday. "We expect both sides to show some flexibility to try to land an agreement that acknowledges that the company needs skilled workers and those workers deserve a fair wage.''

McGuinty's comments did not influence the company's decision to close the plant, said Duguid.

"I hardly think the fact that the premier was standing up for workers to ensure that we continue the spirit of co-operation that we’ve developed here in this province for labour relations would have any factor," he said.

The New Democrats said McGuinty should not have waited a full month before speaking out about the Electro-Motive lockout.

"The writing was on the wall, they were asking to cut salaries by 50 per cent, and this government, this cabinet was absent without leave," complained NDP critic Cheri DiNovo. "Premier McGuinty should have stepped in. He should have intervened, he should have done everything possible to save those jobs."

Prime Minister Stephen Harper had used Electro-Motive as a backdrop in 2008 to promote big tax breaks for industrial capital investments, but the federal government declined to get involved in the labour dispute.

The union has called Caterpillar greedy and immoral after the company reaped record high sales last year and chief executive Doug Oberhelman received a $10.5-million annual paycheque.

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