A More Detailed Look at the Cat Deal

Striking Caterpillar Workers Approve Contract says this about the details of the contract and also quotes local Union leader Tim O'Brien about the deal:

"JOLIET, Ill.—Striking workers at a Caterpillar Inc. factory here voted in favor of a new 6-year labor agreement, a move that ends a job action lasting more than three months, union officials said on Friday. . . .

Friday's vote marks a win for Caterpillar, known as a hard negotiator, with a deal that freezes the hourly pay of veteran workers, ends the company's defined benefit pension plan, and shifts more of the burden of health care costs to employees.

Workers will receive a sweetened, one-time ratification bonus to $3,100, up from $1,000 initially offered. Workers hired before May 2005 would receive no hourly pay increase; those hired after that date would receive a flat 3% pay increase.

In place of the defined benefit pension, the company would offer a 401(k) style defined contribution plan to employees.

The strike was viewed as a test of factory workers' willingness to fight downward pressure on wages and benefits at a time when unemployment remains high and strikes have become rare.

Timothy O'Brien, local president of the IAM, said workers learned only this morning that Caterpillar had agreed to raise a ratification bonus to $3,100 from $1,000 per worker. He said that last-minute concession seemed to have tipped the balance. Mr. O'Brien recommended against accepting the latest offer on the ground that workers were being asked to give up cost-of-living raises, pay more for health care, cede seniority rights and switch to a less-attractive pension plan.

"I also understand the members' plight," Mr. O'Brien said. Many feared they would soon lose their cars or homes and deplete all their savings. "I get it," he said. "We're going back to work.".  . .

Caterpillar faced down strikes by the United Auto Workers in the 1990s and forced that union to make concessions, including sharply lower pay for newer workers. Earlier this year, Caterpillar closed a locomotive plant in London, Ontario, after workers refused to accept a pay cut of about 50%.

The company has gradually reduced its exposure to unions by opening plants in states with low union support and using more outside contractors. At the end of 2011, about 53% of Caterpillar's 27,000 production workers were covered by union contract agreements. Most of those belonged to the UAW, which ratified a six-year contract in March 2011 after unusually smooth negotiations."

Thanks. Bob.