Caterpillar workers reject another contract offer

PEORIA, Ill. -- Union workers rejected Caterpillar Inc.'s "last, best and final" contract offer Sunday, saying they hope the second failed deal this year will convince the company to sweeten proposals on health-care costs and wages.

United Auto Workers officials would not release totals of the vote by more than 9,000 workers at seven Caterpillar plants in Illinois, Colorado, Pennsylvania and Tennessee. On April 25, workers voted nearly 9-1 against a proposal Caterpillar also had billed as its final offer.

"Our members have once again spoken," said Cal Rapson, the union's chief negotiator.

Chief Caterpillar negotiator Chris Glynn said in a statement that workers rejected a deal that would have provided "substantial" gains for workers and retirees, and kept the company "competitive against mounting competition from around the world."

Both sides said work will continue as usual today while they plan their next step in the 8-month-old talks, the first since a bitter, 6 1/2-year stalemate with two failed strikes that preceded their last contract in 1998.

The union halted a threatened Aug. 5 walkout when Peoria-based Caterpillar submitted its latest failed proposal, which the company said added $45 million in pay and benefits. Workers said it wasn't enough, but still hope to end the impasse through negotiations rather than a strike.

Peoria-area UAW members said Sunday they think Caterpillar will resume talks, even though the company has said it would only meet to clarify the latest offer, not modify it. They said the company's hard line was a ploy to pressure workers into approving the deal.

"At their meetings last week, they were more interested in finding out what we don't like about this contract than explaining it. There's another contract out there," Randy Ari, a 30-year employee at Caterpillar's Mapleton plant, said before voting in Peoria.

Workers blasted the company's proposals on health care and wages, saying they are being asked to concede too much considering Caterpillar's record profits the last two quarters.

"They'll do whatever they have to do to keep the shareholders happy," said Larry Lay, a Caterpillar retiree. "They don't care if you live in a cardboard box, they care about big dividends so they can live in their condos in Florida."

Under Caterpillar's proposal, workers and retirees would contribute toward their health-care costs for the first time. The company says costs would be about a third of national averages, and that nearly 80 percent of U.S. employees now contribute to their medical coverage.

Workers said the costs for premiums, co-payments and annual out-of-pocket expenses in the company's offer are too steep, especially for retirees on fixed incomes.

"I don't think we should have to pay. Those are the terms we retired under and the company's still doing well," said Mike Sprecher, a retiree from Caterpillar's East Peoria plant.

Workers also criticized a proposed two-tiered wage scale that would pay new hires and current supplemental workers less than veterans doing the same job. They said the plan would create friction in plants.

Caterpillar officials say the proposed wage scale is needed to stay competitive in its global market and is above industry standards.

Workers said they are willing to strike, but hope to avoid a work stoppage on the heels of the long impasse that stretched through much of the '90s.