LONDON, Ont. - The axe is falling at one of London, Ontario's biggest industrial employers.

About 600 jobs are being cut by Electro-Motive Diesel.

That's about two-thirds of the workforce at the facility, which manufactures diesel locomotives.

The Canadian Auto Workers says it was told a couple of weeks ago to expect 350 to 400 job losses at the plant.

Sources say 90 or so employees may choose an incentive package for early retirement, while the rest will be laid off or terminated.

The cuts are blamed on the global economic slump, which is being felt especially hard in the United States -- one of the prime markets for diesel locomotives.

Electro-Motive Diesel spokesman Walter Hannan calls the layoffs "a last resort."