PEORIA, Ill. (WMBD) — After months of negotiations and the possibility of a strike, Caterpillar and union workers ratified their new contract on Monday.
The six-year contract includes a $6,000 ratification bonus for employees and the elimination of the two-tier wage system. It was approved by 71% of United Auto Workers (UAW) union members.
“I think the majority of members who approved it, they thought this was the best that we could get, and they were not willing to risk it to go out on a strike,” said Dr. Victor Devinatz, distinguished professor of management at Illinois State University and expert in labor unions and contract talks.
Employees get a seven percent raise immediately and then receive additional lump sump payments for a 27% total wage increase. The union had asked for a 50% wage increase.
“I don’t think that the union realistically expected to get that, but I think that was to show that there was discontent in terms of the wage increase agreements for the last 25 years,” said Devinatz.
Caterpillar will match 401K contributions at 75%, up from 50% in the last contract. The contract also enhances retention bonuses and adds an extra week of vacation time.
The company’s drug testing policy now excludes marijuana and employees will not be disciplined for usage.
In December, 98% of UAW members voted to authorize a strike in the event negotiations failed. Devinatz said that sent a serious message to management.
“I know the company took the strike threat seriously because white-collar workers were being trained to man the assembly lines if there was a strike. So I think this was the most realistic chance that there could be a strike in the last 25 years,” he said.
Devinatz said it’s also not uncommon for contract negotiations to go into 11th-hour crisis bargaining.
“In a lot of contract negotiations, it goes down right to the wire. Sometimes what’s called crisis bargaining is that both sides will wait until the last minute to begin serious negotiations .36 to 48 hours beforehand. Assuming that they have been seriously bargaining before. But there might be one or two or three outstanding issues, which are important to both sides,” he said.
Caterpillar also agreed not to close any plants for the duration of the contract, which covers approximately 7,000 employees in Central Illinois and York, Pennsylvania.
The contract went into effect immediately on March 13.
