Caterpillar Contract Receives Lukewarm OK

No one is predicting that labor problems at Peoria, Ill.-based Caterpillar will end even though workers last week brought a six-and-one-half year dispute--which included two nationwide strikes--to an end by narrowly approving a contract that's largely a victory for the company. Why? The contract is only slightly different from the one that was rejected earlier in the month, and it received the support of only 54% of the United Auto Workers who voted.

The contract permits Caterpillar to limit overtime pay, to make decisions unilaterally on what components and products it can outsource, and to pay new workers a lower starting pay. In addition, the union dropped a demand that the company pay union members who worked full-time on union matters, such as grievances. There also is no guaranteed level of total union employment.

The pluses for the 12,000 union members: increased wages and pensions, a comprehensive health care program with a variety of choices for the duration of the six-year contract, and incentive pay more closely linked to business unit performance.

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