Caterpillar, UAW Future Is Uncertain

Caterpillar Inc. on Monday considered its next move after the United Auto Workers union rejected a contract proposal that would have ended a 6 1/2-year labor dispute, despite union leadership’s support for the pact.

Some analysts said the surprising vote amounts to a mild defeat for the world’s largest maker of construction equipment.

About 58% of workers voting rejected the pact in weekend voting, largely because of unhappiness over a provision that would have granted amnesty to workers who crossed picket lines during two strikes against the company, union officials said.

Though the union long ago was seen as the loser in the dispute as the company continued to rack up record earnings, rejection of a contract that was widely expected to pass shows union members can still rally behind a cause and defy the company as well as union leaders who recommended the contract, a labor expert said.

“The vote shows that the union membership is still in the catbird seat at Caterpillar--not the union officials and not the company,” said Raymond Hilgert, professor of labor and management relations at Washington University in St. Louis. “It is obvious these guys are operating out of pride and not monetary gain.”

UAW workers are currently on the job without a contract.

Peoria, Ill.-based Caterpillar said at a news conference Monday it had no immediate plans to resume negotiations though it was open to doing so at some point. Caterpillar shares fell 56 cents to close at $52.06 on the New York Stock Exchange.

The company has been operating under conditions it imposed when workers rejected a contract proposal in 1995 and returned to work after a 1 1/2-year-long strike without a contract.

One difference between the 1995 proposal and the one rejected this weekend was that the 1995 proposal was not endorsed by union leadership.