Caterpillar, the giant construction and earth-moving equipment manufacturer, said yesterday it would begin shuttering its York, Pa., manufacturing plant, a move that will eliminate 1,100 jobs.
Barry Koicuba, president of United Auto Workers Local 786, whose members work at the plant, denounced the decision as "textbook union busting."
"As far as we're concerned, this decision was made a long time ago," said Mr. Koicuba, whose local has about 800 members.
Caterpillar, the market leader in its industry, said its decision to close the York plant known as the York Precision Barstock Products Unit was driven by the failure of the union to agree to what it considered a fair contract offer.
That offer included wages ranging from $17.50 to $21 an hour, cost-of-living adjustments guaranteed through 2001, health care coverage, and assurances the plant would stay open until 2001.
The UAW members at the plant have been working a long time without a contract. It has been about three months since more than 8,000 striking Caterpillar union workers returned to work after walking picket lines for 18 months.
"Frankly, we hoped it wouldn't come to this," said Marsha Hausser, spokeswoman for the Peoria, Ill.-based equipment manufacturer, which employs 54,000 and had 1995 revenues of $16 billion.
"We've been working since 1990 to get that plant to be more competitive with the industry, and we thought the contract would help do that."
Steven Colbert, an analyst with Prudential Securities Research in San Francisco, said the decision to close the York plant shouldn't hurt the company.
For one thing, he said, it appears to have the capacity at its other manufacturing sites to handle work that would shift from the York plant. Also, the decision, he said, extricates the company from one of its longest contract disputes with the UAW.
"The union appears to be the loser here," said Mr. Colbert, noting that the pay structure the company had offered workers was high for the York area.
The York plant, opened in 1953, is one of 31 Caterpillar manufacturing plants in the United States. Its chief function is making precision steel components, including undercarriage and engine parts, for earth-moving equipment.
Ms. Hausser said she did not know the plant's annual payroll. Ms. Hausser said the company planned to shift most of the manufacturing of the parts made at the York plant to other Caterpillar plants. The company might also look at buying some parts from outside suppliers, she said.
The company plans to close the York plant over the next three years, though company officials did not have an exact timetable.
A Caterpillar parts distribution warehouse, which employs 300, was not affected by yesterday's decision, the company said.
Mr. Koicuba, the local UAW president, said he and other union officials would meet with Caterpillar officials soon to determine just how serious the company was about closing the plant.
"They could have had a signed agreement back in '91. But they weren't interested in negotiating," he said. "But, obviously, we don't want to see the plant close."
Pub Date: 3/20/96