Caterpillar: big risks on both sides Outcome of UAW strike could affect millions

April 12, 1992|By Kim Clark | Kim Clark,Staff Writer

When Bill Pillgreen came back from the Vietnam War, he felt lucky to get a well-paying, secure job as a machinist at the Caterpillar Inc. parts plant in York, Pa. Today, 25 years later, he's afraid his children won't have a chance at that kind of good job.

The York plant is the only Caterpillar factory not on strike, but Mr. Pillgreen said many of his fellow workers in York feel they ought to be out supporting the 12,600 United Auto Workers members who are striking Caterpillar operations in Illinois.

Caterpillar, he said, is using the threat of international competition to take away hard-won benefits including good pay, health care, job security -- and the future effectiveness of organized labor.

If Caterpillar wins, "it will be a 10-year step backwards," Mr. Pillgreen said.

Caterpillar executives, in contrast, say it is the workers who are going backward. The only way the company can protect the jobs of workers such as Mr. Pillgreen is to cut its costs so that it can sell more bulldozers and excavators worldwide in years to come.

"We face tough competition. If we allow our costs to rise unchecked, we won't be competitive and we'll lose" sales and jobs, said Vice Chairman James Wogsland.

The company is insisting it can't afford to meet union demands that it match the wages and benefits provided by other U.S. makers of heavy equipment. Caterpillar competes globally and needs to have lower costs and more managerial flexibility, Mr. Wogsland said.

And that is why Caterpillar started advertising for new workers to replace the strikers last week, he said.

The two sides announced Friday that they would restart negotiations, and a meeting probably will be held tomorrow at the suburban Chicago office of the Federal Mediation and Conciliation Service.

Strikes are always painful and risky. But the 5-month-old strike against Peoria, Ill.-based Caterpillar is turning out to be among the most painful and riskiest strikes in years.

The strikers are forgoing their income and risking the loss of high-paying and probably irreplaceable jobs in the hope that the lost sales will force Caterpillar to improve benefits and job security.

And the company is risking the goodwill of customers, employees and investors in the hope of reducing its costs and winning the labor flexibility it says it needs to compete worldwide.

But the struggle between the two is more fundamental. And the futures of millions of workers and thousands of businesses could be affected by the outcome.

If Caterpillar gets concessions the union hasn't already awarded Caterpillar's competitors in the heavy-machinery industry, the union's 40-year-old system of "pattern" bargaining -- setting industrywide standards for contracts -- will be cracked. For union members, that would mean workers doing similar jobs for different companies might earn vastly different wages.

For the union, it would mean a significant decline in bargaining power. And it would mean employers could try to negotiate the most advantageous terms instead of being locked into paying industry-standard wages and benefits.

"Everybody in America is impacted" by the outcome of the Caterpillar dispute," said Rodney Trump, head of the UAW local that represents the 3,500 workers at the General Motors Corp. minivan plant in Baltimore.

Mr. Trump, who is preparing to help negotiate a new contract with the automakers next year, said he is most worried about Caterpillar's attempt to replace striking workers.

"If Caterpillar succeeds in replacing those workers, then workers across this nation will have no power to do anything. We will just have to do what we are told," he said.

One reason both sides are so militant is that the company and the union have been losing many other fights in recent months.

Caterpillar lost $404 million last year, almost entirely because of a worldwide downturn in construction. And stock analysts estimate the company is still losing about $33 million a month because of the recession.

Like most unions, the UAW has been losing members and battles for years. It has lost about 800,000 members to plant closings and layoffs in the past 20 years. And it is trying desperately to stanch a flow of concessions.

Earlier this year GM said it would close an assembly plant, either in Ypsilanti, Mich., or Arlington, Texas, as part of its reduction in size. The Arlington workers agreed to contract changes GM wanted; the Ypsilanti plant workers did not. GM announced the Ypsilanti plant would be closed.

UAW Secretary-Treasurer Bill Casstevens said last week that he wants to stop the concessionary trickle with Caterpillar.

The union wants Caterpillar to sign a contract patterned on one signed by competing heavy equipment maker Deere & Co.

But for Caterpillar, the issue is one of "competitiveness."

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