By Associated Press Writer
updated 8/16/2004 11:00:09 AM ET 2004-08-16T15:00:09

Workers at heavy equipment maker Caterpillar Inc. have rejected a proposed six-year contract, sending both sides back to the bargaining table to fashion new terms on health care costs and wages.

United Auto Workers officials would not release results of Sunday's vote by more than 9,000 workers at seven Caterpillar plants in Illinois, Colorado, Pennsylvania and Tennessee.

"Our members have once again spoken," said Cal Rapson, the union's chief negotiator.

Peoria-based Caterpillar and the UAW said production at the heavy equipment giant will continue as usual Monday.

Caterpillar spokesman Ben Cordani said the company was disappointed by the vote and had been hopeful workers would approve "what is a very fair and competitive offer."

Both sides said they will meet this week to plan their next step in the 8-month-old talks. On April 25, workers voted nearly 9-1 against a proposal Caterpillar also had billed as its final offer.

Many Peoria-area workers said Sunday they think Caterpillar would be willing to resume talks, even though company officials have said they would only meet with the union to clarify the latest offer, not modify it.

Workers criticized the company's proposals on health care and wages, saying they are being asked to concede too much considering Caterpillar's record profits the last two quarters.

Under Caterpillar's proposal, workers and retirees would contribute toward their health care costs for the first time. The company says costs would be about a third of national averages, and that nearly 80 percent of U.S. employees now contribute to their medical coverage.

Workers said the costs for premiums, co-payments and annual out-of-pocket expenses in the company's offer are too steep, especially for retirees on fixed incomes.

"I don't think we should have to pay. Those are the terms we retired under and the company's still doing well," said Mike Sprecher, a retiree from Caterpillar's East Peoria plant.

Workers also criticized a proposed two-tiered wage scale that would pay new hires and current supplemental workers less than veterans doing the same job. They said the plan would create friction in plants.

Caterpillar officials say the proposed wage scale is needed to stay competitive in a global marketplace and are above industry standards.

Workers said they are willing to strike, but hope to avoid a work stoppage on the heels of a bitter, 6 1/2-year stalemate with two failed strikes that preceded their last contract in 1998.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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