Despite earning a record $4.9 billion profit last year and projecting even better results next year, Caterpillar, Inc, the world’s largest manufacturer of construction and mining equipment, is insisting on a six-year wage freeze and a pension freeze for most of the 780 production workers at its Joliet, Illinois, factory.
Caterpillar’s stance has angered the workers, who went on strike 12 weeks ago. The company is operating with replacements, using managerial staff and outside hires.
The showdown, which has no end in sight, is being closely watched by corporations and unions across the country because it involves two generally uncompromising antagonists: Caterpillar and the International Association of Machinists (IAM), that have figured in many high-stake labor battles.
Ever since negotiations began in March, “Cat” has insisted on a wage freeze for top-tier workers employed seven years or more who average $26 an hour. The junior third of the workforce typically earns $12 to $19 an hour.
Caterpillar is probably the toughest corporation to oppose unions. In the mid-1990s, the company defeated the United Auto Workers after a 17-month strike by 9,000 workers at eight factories. The union surrendered and accepted the company’s concession-filled offer.
Corporate Attacks on Unions Are Reaching New Levels
Even where business is booming, and profits are at a record high, corporations are stiffening their demands at the negotiation table and forcing unions to make concessions in pay, healthcare, pensions and working conditions in order to avoid heavy layoffs.
There is also intense interest in labor circles about the situation at Verizon, whose 45,000 workers and their two unions are in a showdown battle with the company, which wants to cut their healthcare and pension benefits.
Corporate America realizes that AFL-CIO leaders have no plan to mobilize millions of union members for a massive counter-attack, and so they are taking advantage of the Federation’s declining numbers and weakened bargaining power.
A major problem within the AFL-CIO is that its leaders have hardly any contact with its 12 million members, nor do they feel they need to, because they do not depend on popular support to maintain their complete control over the Federation’s finances, policies and activities.
Thus, inevitably, union wages and working conditions, that have been won over decades of struggle, are disappearing to the level of non-union standards, as workers begin to see the losses in their pay envelopes.
The situation is even bleaker as labor’s past legislative labor gains are being successfully challenged in a majority of states run by Republican governors and their allies.