Tentative Pact Reached In Strike at Caterpillar
By STEVEN GREENHOUSE
Published: August 15, 2012
http://www.nytimes.com/2012/08/16/business/tentative-pact-reached-in-caterpillar-strike.html?hp

Caterpillar and the International Association of
Machinists said on Wednesday that they had reached a
tentative six-year settlement that could end a 15-week
strike at the company's hydraulics parts plant in
Joliet, Ill.

But the settlement may face difficulties in the
ratification vote on Friday. Top officials in the
striking local -- upset that the deal contained nearly
all the far-reaching concessions Caterpillar had sought
-- said they would urge members to reject the deal, which
was negotiated not by the local but at the district
level.

The dispute -- which involved a company known for setting
an example for corporate America in its tough bargaining
and a union known for resisting givebacks -- has become a
test case in American labor relations. Many workplace
experts said Caterpillar was trying to pioneer territory
by demanding major concessions, including a wage and
pension freeze, even when its business was booming.

Tim O'Brien, president of Machinists Lodge Local Lodge
851, with about 700 members on strike, said the local's
bargaining committee would urge members to vote against
the deal on the grounds that it contained steep
concessions even when Caterpillar was making record
profits.

The tentative settlement, union negotiators said, bows
to Caterpillar's demand for a six-year wage freeze for
the top tier of workers, hired before May 2005. For the
lower-paid tier of workers, hired after that date, the
deal calls for one raise during the six years -- 3
percent at the end of this year. The company's previous
offer did not promise any raise for that group.

Caterpillar has said -- without promising -- that it might
also adjust the bottom tier's wages upward according to
local market conditions. The bottom tier represents
approximately one-third of the factory's workers. Their
pay generally is $12 to $19 an hour, compared with a $26
average for the top tier, representing two-thirds of the
plant's workers.

Mr. O'Brien and many of his local's members have
repeatedly voiced unhappiness about Caterpillar's
insistence on a six-year wage freeze for the more senior
tier, a pension freeze for those workers and a
significant increase in the workers' contributions to
health insurance coverage.

"I'm not for this deal," Mr. O'Brien said. "I haven't
been out on the picket line, doing all these things, so
that I now have to put my tail between my legs and say
I'm giving up."

He acknowledged that about 105 of the 780 Caterpillar
workers in his local had crossed the picket line since
the strike began on May 1.

Caterpillar's statement announcing the tentative deal
added, "By agreement of the parties, we will not be
commenting on any specific details of the tentative
contract."

Steve Jones, the top official in Machinists District 8
in Burr Ridge, Ill., and the union leader who reached
the deal with Caterpillar, defended the settlement's
terms.

"It does not address every issue for every member, but
it deserves to be brought to the membership for a vote,"
he said in an interview, noting that many members were
under financial strain after nearly four months on
strike.

"It shouldn't be individual leaders, a committee or the
district who decide. We should allow the membership to
voice their views."

Mr. Jones added: "We've got some local people playing
politics with people's livelihoods. If there was a
better agreement out there to be had, we would have
taken it."

But Mr. O'Brien said the parent union was giving up too
easily and was feeling stretched from paying about
$100,000 each week in strike benefits.

Mr. O'Brien said the deal also called for a $1,000 bonus
for each worker upon ratification. Before the walkout
began, the workers had voted down an offer that included
a $5,000 ratification bonus.

Another Caterpillar demand that angered the workers was
its insistence that the factory's managers be able to
indefinitely assign workers to new jobs or shifts
regardless of seniority. That upset the workers because
it struck at a basic tenet of unionism: seniority
preferences.

Under the tentative deal, negotiators said, the company
could still assign workers to new jobs or shifts outside
of seniority, but only for a maximum of 90 days.

The strikers often insisted that it was wrong for
Caterpillar to call for a six-year wage freeze when the
company, the world's leading producer of earth-moving
equipment, had record profits of $4.9 billion last year
and forecasts stronger earnings this year. Moreover,
many strikers bristle at a pay freeze because
compensation for Caterpillar's chief executive, Douglas
R. Oberhelman, jumped by 60 percent in 2011, to $16.9
million.

Caterpillar officials said they pushed for a pay freeze
for the more senior workers to help the company remain
cost-competitive because their pay was above market
levels.

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