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Caterpillar Ratifies UAW Contract that Eliminates Two-Tier Wages, Prohibits Plant Closures

March 13, 2023
The 6-year contract covers 7,000 Caterpillar Inc. employees in Pennsylvania and Illinois.

United Auto Workers at four Caterpillar Inc. locals in Illinois and Pennsylvania voted to approve a new 6-year contract with the agriculture and construction equipment manufacturer over the weekend. In a brief statement March 12, the UAW confirmed the new contract, covering 7,000 UAW-represented employees, would go into effect immediately.

The contract ratification means Caterpillar will dodge the strikes that plagued rival manufacturers Deere & Co. and CNH Industrial in 2021 and 2022.

The deal also notably includes a plan to eliminate a two-tier wage system similar to systems criticized by union members in previous strikes, including of Deere & Co.

According to a copy of the March 1 tentative agreement released by Caterpillar, the terms of the new contract include a $6,000 signing bonus, an immediate 7% wage increase followed by 3 more raises of 4%, and lump sum payments in years without raises. Additionally, the new contract will prohibit Caterpillar from closing any union plants and gradually bring two tiers of paid workers—pre-2005 and post-2005—to the same wage schedule over the course of the 6 years covered by the contract.

The UAW did not disclose how many workers voted, but Reuters reported Monday that 71.5% of union members voted to approve the contract, despite some worker dissatisfaction with wage increases compared to rising inflation. 

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