Once-quiet Caterpillar contract talks evolve into PR battle

Wednesday, August 11, 2004

PEORIA, Ill. -- Nearly eight months of secretive contract talks have turned into a high-stakes public relations battle as Caterpillar Inc. tries to sell its "last, best and final" contract offer while union officials lobby workers to reject it.

Both sides have blanketed plants with informational fliers since the Peoria-based heavy equipment giant proposed the six-year deal Thursday, halting a threatened strike by more than 9,000 United Auto Workers members in Illinois, Colorado, Pennsylvania and Tennessee.

Both sides are trying to win the hearts of workers. Caterpillar is meeting with employees and placing full-page newspaper ads. An East Peoria union hall has a sign outside that reads "Vote for Your Retirement, Vote No!"

Workers will decide Sunday when they vote on the contract offer. The union has been working without a contract since April 25, when nearly 90 percent of workers rejected a deal that Caterpillar also billed as its final offer.

Union officials predict the latest proposal will also fail, perhaps by a more lopsided margin. Caterpillar says the new offer adds $45 million in pay and benefits, and the company thinks workers will approve it once they understand the deal.

"Ultimately, it's a decision that's theirs alone. We're certainly hopeful that employees will see the offer is in their best interest, the company's best interest and the communities' best interest and will vote to ratify it," said Caterpillar spokesman Ben Cordani.

Health care costs were a key sticking point in the talks, which began in December and were veiled by a privacy agreement that was lifted after the company made its latest offer last week.

The proposal would require employees to contribute toward their medical coverage for the first time. The union has accepted the change, but wants lower costs and is concerned about the impact on retirees. Paying a portion of premiums along with new maximum out-of-pocket expenses could be devastating for retirees on fixed incomes, according to the union.

Caterpillar counters that its offer will help retirees, who will have to begin paying a share of their premiums next month because a special union fund that has covered the expenses since 1998 is depleted. The company says its offer would lower those costs.

The union also opposes a provision that would scale back wages for 1,000 supplemental workers who would be converted to full-time status if the contract is approved. The union fears friction would develop between those workers and higher-paid veteran employees.

Caterpillar says the wage cut would be more than offset by the addition of health insurance, vacation and other benefits, which would amount to more than $9,000 a year for the average supplemental worker.

Chief Caterpillar negotiator Chris Glynn said the company has "no more wiggle room" if workers reject the offer.

Union members call that a scare tactic and think the company would resume negotiations if the deal fails.

"I think potentially there would be some wiggle room, but I think it would be marginal," Devinatz said.

Neither side is discussing what might happen if workers reject the offer. Caterpillar and the UAW officials said work would continue next week as each side meets to consider its options.

Devinatz thinks both sides want to avoid a work stoppage, with orders for Caterpillar equipment running high and memories of the bitter, 6 1/2-year stalemate that preceded their last contract.

"I don't think they're going to do anything rash," Devinatz said.

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