Profitable Caterpillar Leaves Striking Workers In Its Dust
August 2, 2012 7:23 am
It’s a story of the haves and the have-nots in Joliet, IL, where Caterpillar — whose second quarter earnings are up 67% for $1.7 billion profits — refuses to budge as 780 workers from the International Union of Machinists, Local 781, picket the Illinois Plant. The workers have been striking since May 1st, surviving on subsistence strike wages of $150 a week even as Caterpillar’s CEO Douglas Oberhelman brought home $16.9 million last year.
Labor unions and corporations are watching the Caterpillar strike closely. Detroit Automakers took their two-tier pay model from the heavy machinery manufacturer, and it is feared that the company could act as a model for profitable companies looking to pressure unions. Joseph McCartin, Associate History Professor at Georgetown University weighed in on the implications of Caterpillar’s stalwart resistance:
If Caterpillar is able to put into effect its decision to lower the standards of its workers despite the company’s profitability, it would mark the onset of a new and dangerous era in American labor relations. In past years, when Caterpillar and other corporations sought to lower the living standards of their workers, cited a lack of corporate profits. Now, it no longer matters whether companies are doing well or not. In good times and in bad their message is the same: they want to cut workers’ benefits and income in order to increase profits. This is a dangerous and ultimately unsustainable course for this nation. All workers thus have an interest in fighting this move.
The six year contract in question calls for a six year wage and pension freeze, higher healthcare contributions from workers and fewer provisions for workers on the lower-end of the pay scale ($12-19 an hour).
The New York Times reports on Caterpillar’s history of refusing to bend:
Caterpillar has been a leader in the past 20 years in taking a hard line,” said Richard Hurd, a professor of industrial relations at Cornell. Last winter, Caterpillar locked out about 450 workers at its locomotive plant in London, Ontario, and then closed the factory after the union rejected its demand to cut wages by 55 percent. In the mid-1990s, the company vanquished the United Automobile Workers after a 17-month strike by 9,000 workers at eight factories; the union surrendered and accepted the company’s concession-filled offer.
Timothy O’Brien, president of Local 851, refers to the structural problems evident in Caterpillar’s stance:
A company that earned a record $4.9 billion in 2011 and $1.586 billion in the first quarter of this year should be willing to help the workers who made those profits for them. Caterpillar believes in helping the very rich, but what they’re doing would help eliminate the middle class.
Meanwhile, strikers are taking four hour shifts in 99 degree heat demanding lower health-care premiums, cost-of-living raises, and that seniority be honored, as scabs are bussed in to fill their jobs. Caterpillar claims the workers are already paid well above market rate.
The good times are rolling for Caterpillar — leave workers in a big cloud of dust.
Image from here