© Reuters. FILE PHOTO: The Caterpillar logo is seen at the ‘Bauma’ trade fair for construction machinery, building material machines, mining machines, construction vehicles and construction equipment in Munich, Germany, April 8, 2019. REUTERS /Michaela Rehle/File Pho
By Blanca Flores
(Reuters) – Caterpillar Workers at Inc (NYSE:) are scheduled to vote on a tentative agreement with the mining and construction equipment maker on March 12, the United Auto Workers union told members on Thursday in a notice seen by Reuters.
The company said Wednesday it had reached a six-year agreement with UAW members, avoiding a strike at three manufacturing facilities in central Illinois and a parts and distribution center in York, Pennsylvania.
Caterpillar outlined guaranteed wage increases and changes to paternity leave and retirement benefits in the agreement, pending a ratification vote by employees.
The current agreement, which had been temporarily extended, expired at midnight on March 1.
Under the new contract, employees would receive a $6,000 bonus upon ratification. The company also detailed combined salary increases of 27% and lump sums over the six-year period, and an increase in employer contributions to retirement plans.
Health premiums remained unchanged. Workers have said the agreement does not make up for years of wage freezes that have been absorbed by higher health care costs.
“What is already known about the terms of the UAW-Caterpillar agreement indicates that it is another slap in the face and deserves overwhelming rejection,” a committee of Caterpillar union workers said in a statement.
Caterpillar, which has been struggling with margin pressures as input costs continue to rise, has more than 100,000 employees worldwide. The contract covers some 7,000 employees.
The Irving, Texas-based company detailed a contingency plan on its website, saying it would operate the facility with management and contract workers if full-time employees went on strike. Employers in the manufacturing sector face a tight labor market, and workers at rivals Caterpillar Deere (NYSE:) & Co and CNH Industrial (NYSE:) NV have gone on strike in recent years.
“I’m sure CAT wants to avoid any prolonged strikes similar to the one that (Deere) went through,” said Mark Grywacheski, a partner at Quad Cities Investment Group, LLC.