IE 11 is not supported. For an optimal experience visit our site on another browser.

Caterpillar offers union final contract deal

Caterpillar Inc. gave the United Auto Workers what it called its “last, best and final” contract offer Thursday, and the union held off a scheduled strike by more than 9,000 workers at plants in four states.
/ Source: The Associated Press

Caterpillar Inc. gave the United Auto Workers what it called its “last, best and final” contract offer Thursday, and the union held off a scheduled strike by more than 9,000 workers at plants in four states.

The Peoria-based heavy equipment giant said the offer provides “substantial” pay and benefit improvements compared with a proposal rejected by workers in April. Caterpillar had also billed that proposal as its final offer.

Company spokesman Ben Cordani declined to provide specifics, saying the company wants to outline the contract to workers first over the next few days.

Bill Scott, a member of the union’s bargaining committee, said a contract vote was scheduled for Aug. 15, although the union won’t recommend whether members ought to accept or reject the deal.

“We think the proposal is significant enough — although we think it’s substandard — we think that it’s significant enough that it deserves the members’ consideration,” Scott said.

The company offered some changes from its last final offer, Scott said.

“However, we feel that the cost shifting in health care is so extreme as to make it unaffordable for almost all employees and retirees,” he said.

Scott said the union will weigh its options if workers reject the pact, but he wouldn’t elaborate on what those options might be. He said a strike is not currently under consideration.

Cordani called it “impossible to speculate” what might happen if workers reject the offer.

Caterpillar has vowed to keep lines running if workers strike, using salaried employees, temporary workers and union members who cross picket lines.

The UAW had set a noon Thursday strike deadline, but kept workers on the job after the heavy equipment giant presented the offer Thursday. Some workers failed to get word of the extension and briefly walked out of a plant in Mapleton, near Peoria, said Rick Doty, spokesman for an East Peoria-based union that represents about 5,000 Caterpillar workers.

In trading Thursday, Caterpillar stock closed down $2.08, or 2.9 percent, at $69.62 on the New York Stock Exchange. The company, which has posted record profits the past two quarters, designs and produces mining and construction equipment, as well as engines for earth-moving and construction machinery.

Hope to avoid walkout
Both sides have said they hope to avoid a walkout reminiscent of a bitter, 6 1/2-year stalemate that preceded the last six-year deal for workers at seven Caterpillar plants in Illinois, Colorado, Pennsylvania and Tennessee.

Workers have been on the job without a contract since April 25, when they rejected a proposed six-year deal.

Union members then balked at provisions that would require them to contribute to their health care premiums for the first time and a proposed two-tiered wage scale that would start new hires at about half the pay of veteran workers.

Talks, which first began last December, resumed about two weeks after the contract offer failed and have continued through the summer.

Last month, the union presented a counterproposal that accepts the new wage scale but boosts starting pay from $10 an hour to $11. The union also accepted paying part of members’ health care costs for the first time, but at a lower rate than the company proposed.

Negotiators from both sides have said little during the eight months of talks, citing an agreement to keep details private.

Both sides said that news blackout had made bargaining more professional than their last round of talks, which disintegrated into two failed strikes.

Workers walked out for two months in late 1991, returning when the company threatened to hire permanent replacement workers. A 17-month strike in 1994-95 ended as the company continued to post strong earnings by keeping lines running. The bitter impasse yielded hundreds of unfair labor practices complaints, as well as flattened tires and other isolated incidents of vandalism.