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Caterpillar Discloses Contract Proposals

June 19, 1986

ST. LOUIS (AP) _ Caterpillar Inc. has outlined its contract proposals to the United Auto Workers in a letter to all 40,000 of its domestic employees - the company’s first public disclosure of its position in the bargaining.

The two sides have been negotiating since early April on a new contract for nearly 17,000 active UAW members and 12,000 laid-off members at 14 Caterpillar plants in five states.

The current extension of the old three-year contract between the UAW and Caterpillar expires at midnight June 27.

The Peoria, Ill.-based manufacturer of earth-moving machines charged the UAW with failing to provide a ″meaningful response″ to the company’s previous contract proposal of June 11.

Caterpillar’s letter said projected cost-of-living increases would lift average wages by $1.44 an hour over the next 40 months. It added that workers would have to absorb immediately a 7-cent-an-hour cut because of a negative cost-of-living adjustment in June that was deferred by the four-week contract extension.

Although the company’s largest UAW local representing about 9,100 Peoria- area workers had no immediate response, the two-page letter brought a quick reply from the second-largest UAW local, representing about 2,500 workers at the company’s Decatur plant.

Fliers disputing several points in the company letter and signed ″your central bargaining committee″ were handed out to workers at the Decatur plant. The flier said changes the company sought in making cost-of-living adjustments would cut workers’ wages by 43 cents an hour.

Caterpillar’s letter to factory and office employees also noted company proposals to eliminate a company-paid lunch period, skip payment of the first three cents per hour of each cost-of-living increase, and to boost monthly pensions and basic pensions for new retirees to levels slightly below those sought by the UAW.

The Decatur union’s flier said complained that a flex-time plan proposed by the company could lead to 11-hour days with no overtime pay after the standard eight-hour workday.

″We’re flexible and will look at other alternatives the UAW may have for containing costs,″ the company letter said. ″But costs are critical to remaining competitive.″

Union negotiators have complained the company has yet to respond to their demand for a 3 percent wage increase. UAW workers’ basic wages - excluding periodic cost-of-living boosts - have been frozen since 1982.

Caterpillar pay averages $13.93 an hour for blue-collar workers. With benefits, each worker costs the company an average $24 an hour, Caterpillar has said.

The company letter said its proposals on benefits would increase per-worker costs by 8.6 percent over the contract’s life - to $26.50 an hour by late 1989.

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