WATERLOO, Ont. - Premier Dalton McGuinty says he's "very concerned" about a nasty labour lockout at a locomotive plant in London, Ont.

Electro-Motive Canada locked out 420 workers on Jan. 1 after making a take-it-or-leave-it offer that the union says included a 55 per cent wage cut and other concessions.

Electro-Motive is owned by heavy equipment giant Caterpillar Inc. (NYSE:CAT) through its Progress Rail subsidiary.

McGuinty -- whose Liberals hold several seats in the city -- says it's a really tough time to lose a job when there aren't that many being created right now.

The premier says he expects both sides to "moderate" their tone in the dispute and that his government will provide a mediator to bring both sides to the table.

The federal Conservatives aren't commenting on the lockout at the plant, which Prime Minister Stephen Harper once used as a backdrop to tout business tax breaks.

Harper visited the plant in March 2008 to showcase a $5-million federal tax break for buyers of the diesel locomotive-maker's wares and a wider $1-billion tax break on industrial capital investment.

Ken Lewenza, the president of the Canadian Auto Workers union, has called on Harper to stand up for workers against what he calls unreasonable, aggressive demands by Caterpillar.

But both spokespeople for both Harper and Labour Minister Lisa Raitt have declined comment, saying they don't comment on the actions of private companies.

Last year, Raitt intervened when privately owned Air Canada was at war with its unionized workers last year. But her spokeswoman Ashley Kelahear said the Electro-Motive dispute is a matter of provincial jurisdiction.