Shareholders told 47,000 seek jobs of UAW strikers

DIGGING IN AT CATERPILLAR

April 09, 1992|By Kim Clark | Kim Clark,Staff Writer

WILMINGTON, Del. -- In an ornate ballroom in the posh Hotel duPont, Caterpillar Inc. Chairman Donald V. Fites said yesterday that his company had gotten calls from 47,000 people interested in filling the 12,600 jobs being struck by the United Auto Workers. Outside the hotel, about 100 striking and laid-off workers carried signs demanding: "Permanently replace Fites."

What is likely to be one of the most important labor battles of the coming decade moved from Caterpillar headquarters in Peoria, Ill., to this normally quiet bastion of American capitalism yesterday as Caterpillar held its annual shareholders meeting.

Although annual meetings are often dull, self-congratulatory affairs, this one threatened to disintegrate into a shouting match, as union members who owned stock were denied a chance to address for more than two minutes the approximately 200 shareholders gathered in the chandeliered room.

Indeed, by the end of the day, it became clear the two sides were still far apart from a resolution, as each side blamed the other one for the worsening 5-month-old strike.

"There is nothing on the table that couldn't be negotiated by two rational people," said Eli Lustgarten, a PaineWebber stock analyst who follows the company. "There is a lack of rationality on both sides."

The UAW doesn't want to give in because it is afraid that allowing Caterpillar to win concessions not already awarded to its American competitors will spark a round of concessions, explained Frank Prezelski, who follows the industry for Rothschild Inc. in New York.

Next year, he noted, the UAW is scheduled to negotiate a new rTC three-year agreement with General Motors Corp., which is the largest employer of UAW members. "That's the real ballgame," Mr. Prezelski said.

It was clear emotions were running high when one striking worker who owned stock told Mr. Fites he was ruining the company by trying to replace veteran workers like himself.

Mr. Fites insisted he didn't want to replace longtime employees, and said the company is offering those who cross the picket lines jobs that will pay about $47,000 a year plus benefits.

At that point, Bill Casstevens, secretary-treasurer of the UAW and owner of about 100 shares of Caterpillar stock, shouted, "This is an annual meeting, not a scab solicitation meeting."

Indeed, much about this meeting was unusual: from the uniformed guards lining the walls to company managers' concessions that last year's financial performance by the world's largest maker of earthmoving equipment was "unacceptable." (Caterpillar lost $404 million in 1991.)

Though the company likely is still operating in the red, managers insisted the loss had nothing to do with the strike. Sales of almost every kind of earthmoving equipment were down significantly last year.

"We don't have a supply problem" even though 4,000 salaried workers are running plants normally staffed by nearly 13,000 machinists and laborers, Mr. Fites said. "We have a demand problem."

Mr. Lustgarten, the stock analyst, agreed that the strike hasn't contributed to the company's losses. He estimates the company is losing $33 million a month because of the recession. "If you are ever going to have a labor dispute, this is the time," he said.

The UAW has been picketing Caterpillar plants since Nov. 4 because the company has refused to sign a contract similar to those signed by equipment makers such as John Deere.

Mr. Fites repeated yesterday that Caterpillar won't sign a "pattern" agreement based on American competitors' contracts because Caterpillar sells most of its backhoes and tractors overseas, and thus needs better terms to stay competitive.

About 60 percent of its products -- or $3.7 billion worth of equipment -- was sold overseas last year, he said.

Caterpillar doesn't compete against Deere as much as it does against companies such as Komatsu, a Japanese tractor company, he said.

"If we allow our costs to rise unchecked, we won't be competitive and we'll lose," warned Vice Chairman James Wogsland.

But Mr. Casstevens, who is the UAW's chief negotiator for the Caterpillar dispute, dismissed Mr. Fites' statements, saying that the company is simply trying to bust the union. The UAW tries to set patterns for agreements in each of the industries in which it represents workers, so that the workers in different companies are treated equally and so that the companies can compete fairly, he said.

And if Caterpillar breaks the pattern for its industry, other companies will try to follow suit. "There are a lot of greedy companies out there," he said.

Mr. Casstevens has warned that Caterpillar's fight against the union may ruin the company, just as similar labor disputes, he argued, destroyed companies such Eastern and Continental Airlines.

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