Caterpillar Workers Reject Proposal

The main union at Caterpillar Inc. said its members voted Sunday to reject the construction equipment maker’s contract proposal, the second time this year the workers have voted against an offer.

But the United Auto Workers said its members would report to work as normal today despite the vote.

More than 9,000 Caterpillar workers in Illinois, Pennsylvania, Colorado and Tennessee have been working without a contract since UAW members rejected a previous company proposal April 25.

“Our members have once again spoken,” said UAW Vice President Cal Rapson, adding that the UAW central bargaining committee at Caterpillar would meet later this week.

The rejection of the proposal was expected, as workers criticized the company’s proposals on healthcare and wages, saying they were being asked to concede too much considering Caterpillar’s record profit the last two quarters.

Under Caterpillar’s proposal, workers and retirees would contribute toward their healthcare costs for the first time. The company says costs would be about one-third of national averages and that nearly 80% of U.S. employees contribute to their medical coverage.

Workers said the costs for premiums, co-payments and annual out-of-pocket expenses in the company’s offer were too steep, especially for retirees on fixed incomes.

“I don’t think we should have to pay. Those are the terms we retired under, and the company’s still doing well,” said Mike Sprecher, a retiree from Caterpillar’s East Peoria, Ill., plant.

Workers also criticized a proposed two-tiered wage scale that would pay new hires and current supplemental workers less than veterans doing the same job. They said the plan would create friction in plants.

Caterpillar officials say the proposed wage scale is needed to stay competitive in a global marketplace and is above industry standards.

Caterpillar said it was disappointed that union members rejected the offer, which it said included substantial pay and benefit improvements for workers and some 20,000 retirees covered by the contract.

“Despite the vote, employees remain on the job, and operations continue as usual,” the company said.

Workers said they were willing to strike but hoped to avoid a work stoppage.