Cat's threat to UAW may lead to courtroom Union denies that 'lawful impasse' has been reached

August 29, 1996|By BLOOMBERG BUSINESS NEWS

PEORIA, Ill. -- Caterpillar Inc. and its uneasy truce with United Auto Workers members may end in the courtroom, in the wake of a company threat to impose its own contract terms on employees Oct. 1.

Caterpillar announced Tuesday that labor negotiations with the UAW had reached an "impasse," a term in labor law that could allow the company to impose the same contract terms and conditions that union members overwhelmingly rejected nine months ago.

But the UAW denied that a "lawful impasse" has been reached that would allow Caterpillar to implement the terms of the rejected contract.

"This tactic is yet another attempt to subvert the collective bargaining process," Richard Shoemaker, UAW vice president, said in a statement yesterday.

Shoemaker called the company's actions "irresponsible" and said the union has warned Caterpillar that it intends "to pursue the appropriate legal remedies" if the company goes forward with the plan.

Caterpillar shares fell 87.5 cents yesterday to $70.25.

The Peoria, Ill.-based company said an impasse has occurred because the UAW hasn't changed its demand for arbitration for all workers fired during a 17-month strike. Union officials ended the strike in December, although workers voted down the company's proposed contract.

Since then, employees at the world's largest maker of earth-moving machinery have worked under provisions of an older contract that expired in 1991.

Many of the terms Caterpillar wants to impose are those it proposed in the December contract offer, said Caterpillar spokeswoman Marsha Hausser.

In its proposals, Caterpillar estimates its average wage of $19.61 an hour would increase to $20.63 by 2001, still double the average in U.S. manufacturing.

"This gives us the flexibility to control our labor costs," Hausser said. "There are still wage increases built in, and they are still the best paid in the industry."

Caterpillar's proposed changes include cost of living adjustments through 2001, though at a lower rate than previously. Caterpillar also said incentive pay would double and the maximum number of weeks of temporary layoffs would be reduced over three years to 10 weeks a year for employee from 36 weeks.

New employees would receive 70 percent of regular base pay, but would achieve job security, Caterpillar said.

Regular workers would receive higher retirement benefits and job security.

The company also wants to increase the number of part-time and temporary workers to up to 15 percent of the company's total work force.

Except for the announced partial closing of its York, Pa., plant, Caterpillar also said it wouldn't close any plants through 2001.

The union wants arbitration for all workers fired within a certain period before the strike began, as well as during and after the strike.

Pub Date: 8/29/96

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