Caterpillar says it may close plant in York

December 12, 1991|By Kim Clark

Caterpillar Inc. announced yesterday that it would probably close its parts-making plant in York, Pa., putting more than 1,900 area jobs at risk.

But if the United Automobile Workers, which represents about 1,450 of the York workers, agrees to reduce the Pennsylvania plant's labor costs, company officials said they "might look very favorably at keeping the facility open." Company officials said there was no deadline for negotiations and refused to say exactly what they wanted from the workers to keep the plant open.

In an afternoon press conference, however, Len Kuchan, Caterpillar spokesman, said that a two-tier pay contract, under which some workers get paid less than others doing similar work, "would be a step in the right direction. . . . But I am not saying that is all we need or don't need."

Mr. Kuchan said that the York workers earn about $17 an hour, whereas workers in other machine shops earn about $10.50 an hour. But he said he didn't think it would be necessary to bring York workers' pay down to $10.50 an hour.

Local UAW leaders said that they were shocked by Caterpillar's closure warning and that union officials would meet with Caterpillar today.

More than 600 York workers have been laid off in recent weeks, at least partly because of an ongoing union-management dispute.

The company has said that the parts-making division is expected to lose money this year, said Jay Roberts, who heads the local that represents Caterpillar workers in York.

In fact, the entire company is expected to lose money this year because of poor sales and labor disputes. It would be Caterpillar's first annual loss since 1984.

The heavy machinery company, which is based in Peoria, Ill., also announced yesterday that it would cut several hundred jobs out of its Brazilian operations, halve its dividend and reduce its capital spending.

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