The dramatic move at the Electro-Motive Canada factory, owned by Caterpillar subsidiary Progress Rail, confirmed the worst suspicions of the Canadian Auto Workers union before the lockout began.

“We said it had all the markings of a closure,” CAW president Ken Lewenza said Friday after the closure was announced by the company.

“They denied it at the time . . . but they did exactly what they planned to do. I’m pissed.”

Electro-Motive said labour costs were too high in London and sought to get them on par with its operations at a new plant in Muncie, Ind., where industry analysts have said the company could take advantage of “Buy American” policies.

“It is regrettable that it has become necessary to close production operations at the London facility,” Electro-Motive said in a statement, declining to answer further questions.

“The cost structure of the operation was not sustainable and efforts to negotiate a new, competitive collective agreement were not successful.”

The wage concessions the company was seeking from CAW members earning up to $34 hourly would have put pay levels on par with its American operations.

Last month, Caterpillar reported annual profits rose 83 per cent to a record $4.9 billion.

Electro-Motive Diesel employee Ralf Zapke was on the picket line with his fellow workers when they heard about the closure, wondering what kind of severance they will get from a company playing hardball.

“There are lots of people who are just terrified . . . they have families, kids, mortgages, car payments. They are afraid they’ll lose it all,” he said. “No one knows what will happen. We’ll try to work out closure language but will they try to treat us the same way?”

Closing the plant had immediate political reverberations on Parliament Hill and at Queen’s Park.

Electro-Motive received $5 million in federal tax breaks announced on the factory floor by Prime Minister Stephen Harper in 2008. That was before the plant was sold to its current owners in 2010, prompting questions from the union as to whether there were any strings attached to the money.

“I don’t know how we can hand these guys money like that with no job guarantees. It’s unconscionable,” said Lewenza, who rushed to London to meet with workers Friday after being informed of the closure by a senior Caterpillar official.

The Summer Games are expected to attract 900,000 visitors to the United Kingdom’s capital in July and August. The festivities will kick off with an opening ceremony designed by famed film director Danny Boyle, who has a lot to live up to after the elaborate display that launched the last Summer Games in Beijing.

Police said Friday that the 47-year-old woman was arrested on suspicion of attempting to pervert the course of justice and later released on police bail to return for more questioning later this month.

Officers said the woman was detained at her home and taken to a police station in Essex, east of London, but did not confirm her name.

A person briefed on the arrest, who demanded anonymity to discuss details of the sensitive police investigation, said the woman was Cheryl Carter, the longtime personal assistant of Brooks — also an ex-News International chief executive — and other senior staff.

News International declined to comment.

The person said Carter’s arrest was linked to the recovery of incriminating company emails from a data centre in India last year. The content of tens of thousands of archived News International emails are being examined by investigators.

Detectives have so far arrested 23 people as part of new investigations into alleged phone hacking, computer hacking and police bribery at the Murdoch-owned News of the World and other British tabloids. No one has been charged with any offence.

Murdoch shut down the News of the World in July after evidence emerged that its employees had routinely eavesdropped on the cellphone voice mail messages of celebrities, sports figures, politicians and even crime victims.

The scandal has spawned a huge police investigation and a public inquiry into media ethics and seen top police officers, media executives and Prime Minister David Cameron’s spokesman — an ex-News of The World editor — all resign their posts.

The new agreement adds two years to London’s contract, through 2016, and increases his annual salary to $2.1 million. It also includes a longevity bonus that takes effect Jan. 15, 2015.

Britain had little to lose and much to gain from a successful euro zone summit. If the single currency collapses, the UK economy and its financial system would suffer. Meanwhile, the proposed fiscal reforms designed to help restore confidence in the euro zone do not directly affect European Union countries outside the single currency.

The British Government in a move, described by many experts as hasty and passive, closed down Iranian Embassy in London and ordered Iranian diplomats to leave Britain within 48 hours.

The Occupy London Stock Exchange (LSX) movement said a dozen demonstrators gained access to the building in the Hackney area of east London overnight and secured it, adding that they planned to use it as a “bank of ideas.”

The London protesters, inspired by the Occupy Wall Street demonstrators in New York, also have camps outside St Paul’s Cathedral in the heart of the financial district and in Finsbury Square, also near major banks.

“As banks repossess families’ homes, empty bank property needs to be repossessed by the public,” Occupy LSX member Jack Holburn said in a statement on the movement’s website.

Twenty five engineers and a production team of 40 are employed on the project.

An initial order was placed for eight prototype buses, with the company hoping many more will follow.

Demonstrators, inspired by anti-Wall Street protests in New York and other major cities, showed no sign of leaving today, even after the cathedral’s Dean, Graeme Knowles, appealed to them to move. The protesters have set up a prayer and meditation tent and portable toilets as they campaign against the banks that have offices in London’s financial district.

“I’m a little bit more concerned about the stance the church is taking,” said Ronan McNern, 36, a spokesman for the group that’s calling itself Occupy London Stock Exchange, when asked about the protest’s impact on the cathedral. “They seem more concerned about health and safety here, not the health and safety of the world.”

Protesters began gathering in London on Oct. 15, pitching about 200 tents in the area around the cathedral and calling for an end to bank bailouts, cuts in public expenditure, arms dealing, corporate profits, global oppression and war. The group, which echoes similar protests in the U.S. and Japan, was blocked by police from approaching the LSE, which is about 100 yards from the camp site.

The campaigners plan to attract support by organizing activities including a so-called “tour of corporate greed” around the area and have established an occupation library called StarBooks directly opposite a Starbucks Corp. coffee shop. McNern didn’t have an accurate figure for the number of people at the campsite today.

‘Very Heavy Heart’

The decision to close St. Paul’s applies until further notice and was made “with a very heavy heart,” Knowles said yesterday as he asked the protesters to leave. The building was last forced to shut its doors during World War II when London was being bombed.

“With so many stoves and fires and lots of different types of fuel around, there is a clear fire hazard,” he said. “Then there’s the public health aspect, which speaks for itself.”

While the Church of England stood “alongside those seeking equality and financial probity,” the camp was affecting the cathedral’s daily life, Knowles said.

“In order that we might reopen as speedily as possible, we ask you to withdraw peacefully,” he wrote in an open letter to the demonstrators.

The cathedral was not motivated by financial concerns, according to Knowles. Even so, it cost 20,000 pounds ($32,000) a day to run the building and 80 percent of that was covered by revenue from tourists. The number of visitors has fallen since the camp was established, he said.

Fire Access Blocked

The camp site blocked access to fire trucks for both the cathedral and the chapter house, where many of the cathedral’s 200 staff and 100 volunteers work, Knowles said in an interview.

The decision didn’t involve either the Bishop of London, Richard Chartres, or the Archbishop of Canterbury, Rowan Williams, leader of the Anglican Church, Knowles said. Williams said in a 2009 interview with the British Broadcasting Corp. that bankers have failed to repent for their roles in the global financial collapse.

Chartres said that year that bankers “have a duty to be extravagantly generous, because to those to whom much has been given, much will be required.”

Communication with the protesters will continue, Knowles said. “We’re not pulling up a drawbridge,” he said. “We issued the letter and we hope there’ll be a response from the protesters.”

The church hasn’t yet decided what it will do should the protesters decline to leave, according to Knowles. To his knowledge, the church has no other suitable land in London it could offer, he said.

A British couple have died in Spain after being swept away in a flash flood, a government official has said.

The pair, believed to be in their 70s, were hit by a torrent of water at a street market in the town of Finestrat on the Costa Blanca, said Interior Ministry official Jose Perez Grau.

Heavy rain inland caused the torrent to rush downhill into a dip where the market was being held, he said.

The Foreign Office confirmed the deaths and said it was offering assistance.

BBC correspondent Sarah Rainsford, in Madrid, said the couple were sitting outside a cafe-stall at the weekly market when they were hit by a wall of water up to a metre high.

An eyewitness said the woman clung to a stall for safety, but was struck by another that was washed away by the water, our correspondent said.

Caught by surprise

Mr Perez Grau told the Associated Press news agency that it had been raining heavily inland for about 25 minutes before the incident, which happened at about midday on Friday.

Stallholders and visitors had been caught by surprise when the flooding hit because it had not been raining in the town itself, he added.

Local media said the water came gushing through a dried-up ravine and into the market place, wrecking cars and stalls.

It later emerged that the town’s council was fined 83,000 euros by the local hydrographic authority for paving the ravine bed without permission last July.

According to local reports, the council was also urged not to allow vendors to hold a weekly street market in the area where Spanish media say the incident happened.

The bodies of the British couple, who have not yet been named, were said to have been found trapped under a trailer after the flood.

Regional newspaper Diario de Informacion said the couple had been on holiday in the resort of Benidorm, about seven miles east of Finestrat.

Another two people were taken to hospital, according to local media, and a 90-year-old was missing for a time but was later found unharmed in a nearby street.

A Foreign Office spokesman said: “We are aware of the death of two British nationals in Finestrat, Spain.

“We are providing consular assistance to the family.”

The authorities in Finestrat have declared two days of official mourning for the couple.