Originally created 04/27/04

Workers at Caterpillar reject company contact offer



PEORIA, Ill. -- Some 8,000 Caterpillar Inc. workers rejected a six-year contract that the heavy equipment giant has called its final offer, but employees remained on the job, company and union officials said.

The United Auto Workers told employees to report to work Monday even though an extension of their current contract expired Sunday night.

The union's bargaining team will meet "as soon as practical to assess the situation and plan our next steps," chief UAW negotiator Cal Rapson said in a statement.

Union officials declined to comment further and did not release totals of the weekend balloting by seven locals in Illinois, Colorado, Pennsylvania and Tennessee.

Caterpillar's chief negotiator Chris Glynn said he was disappointed that workers rejected the deal.

"We will take time to assess the situation, and our hope is that employees will also use this time to reflect on our proposal and weigh its merits. ... We believe, with time, they will find it very competitive," Glynn said in a statement.

Workers from the union's largest local generally blasted the offer after voting Sunday in Peoria, where the world's No. 1 maker of earth-moving equipment is based.

Veteran employees, who make more than $20 an hour, would receive only small cost-of-living increases under the company's offer, according to a summary of the proposal the union provided to members. All employees would receive a $3,000 bonus this year if the offer is ratified.

"They're making billions and billions and they can't even give us a raise," said Larry Johnson, a 30-year Caterpillar employee who works at the company's Morton plant.

Caterpillar reported record first-quarter profits of $412 million last week and raised its full-year outlook for earnings and revenue.

UAW members have authorized a strike if talks break down, but Peoria-area workers said Sunday they hope Caterpillar will return to the bargaining table.

"For a working man to have a strike is not beneficial to them," said Phillip Hickam, a retiree. "You end up losing money in the long run and it's hard in the short term because a lot of people work paycheck to paycheck."

Workers said Sunday they were also unhappy that their free health care insurance would be replaced by $21 monthly premiums for single coverage and $66 for a family. Retirees would pay nearly $60 a month for single coverage and about $120 a month for a family.

The proposal also would continue a two-tiered wage system that is part of the current contract, reached after a bitter, 6 1/2-year stalemate in the 1990s that included two strikes.