United Auto Workers members approved a six-year contract Sunday with heavy equipment giant Caterpillar Inc., ending a nine-month stalemate that averted the bitter strikes that preceded their last labor agreement, the company said.
The deal covers about 9,000 workers at plants in Illinois, Colorado, Pennsylvania and Tennessee, who stayed on the job without a contract as both sides continued talks that stalled over health care costs and wages.
Chief Caterpillar negotiator Chris Glynn said called the contract "good news for our employees, business and communities."
"Through thoughtful and professional negotiations, we've established a solid foundation for our continued competitiveness, success and growth in these facilities," Glynn said.
No vote totals were announced. Union leaders have said the deal includes gains and losses for workers, but preserves jobs that Caterpillar threatened to move to nonunion plants without UAW concessions.
UAW President Ron Gettelfinger called the deal "the best possible contract under very difficult circumstances."
Workers overwhelmingly rejected two earlier company offers that went to a vote with no union recommendation. Union negotiators had urged approval of the latest deal, calling it the best they could get without a strike.
Both sides said they wanted to avoid a work stoppage, in the wake of a 6 1/2-year standoff with two failed strikes that preceded their last contract in 1998.
Peoria-based Caterpillar thwarted those strikes by keeping plants running with salaried employees and replacement workers, a strategy the company vowed to repeat this time around. Union leaders feared a strike would create financial hardships for workers, who they said also would risk losing their jobs to replacements under current labor laws.
Workers expressed mixed feelings about the deal, reached last month after more than a year of talks.
"I think it's the best they can do," said John Harris, a 30-year Caterpillar employee in Mossville, near Peoria.
Others said workers are being asked for too many concessions, considering a surge of equipment orders that fueled record profits last year for Caterpillar.
"If they were in the red, I could see it. But the CEOs, the vice presidents, they're going to get bonuses of at least a million dollars, every one of them, and now they're taking away from us," said John Palumbo, who retired in 2000 after 35 years at Caterpillar's East Peoria factory.
Under the contract, workers will contribute to their health care costs for the first time. But union negotiators said a bigger hang-up was premiums for retirees, who began paying about $135 a month last fall when a union fund that covered the costs was exhausted.
Those costs will be trimmed to about $60 a month under the contract, after union negotiators agreed to sacrifice annual incentive bonuses that paid workers about $1,500 to $2,500 based on factors ranging from productivity to company profits.
Current supplemental workers who become full-time will make about $17 an hour under the proposed contract, compared with veteran workers who started at $20 to $22. New workers hired under the deal will start at about $10 to $15 an hour, depending on job classification.
In lieu of raises, the deal also gives workers lump sum payments equaling 4 percent of their average annual earnings in 2005, 3 percent in 2006 and 2007 and 2 percent in 2008 and 2009. Workers also will receive a $3,000 bonus within 30 days for ratifying the contract.