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Caterpillar outmuscles union to end Illinois strike in loss for organized labor

Workers at successful US companies agree to wage freezes and benefit concessions while corporate profits soar and CEOs get raises.
Caterpillar labor rightsEnlarge
Workers at construction giant Caterpillar accepted a deal that included wage freezes, in the latest battle between American unions and corporations. (ERIC LALMAND/AFP/Getty Images)

Striking workers at the Caterpillar hydraulic parts factory in Joliet, Illinois will head back to work after voting to accept an agreement that includes a wage freeze, a pension freeze for those hired before May 2005 (two-thirds of the workers), and an increase in health care costs, the New York Times reported.

Analysts say Caterpillar's hard bargain was a significant loss for the labor union, the International Association of Machinists (IAM), and potentially for unions nationwide. 

“There’s very little good news in this for the union — they have managed to maintain the bargaining relationship. I wouldn’t say it’s a disaster, but it sure is a step back," said Michael LeRoy, a labor relations professor at the University of Illinois.

Caterpillar, the world's largest producer of construction and mining machines, reported sales and revenues of over $60 billion in 2011 and every member of the board of directors received salary increases last year. Union leaders at the local level strongly opposed the deal but were overridden by regional leaders. Since the strike began in May, more than 100 out of the original 780 striking workers had crossed the picket line and returned to work.

The resulting concessions by a major American union like the IAM may signal that US organized labor is fighting a losing battle, squeezed by high unemployment and economic troubles now plaguing the American middle class.

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The IAM isn't the only major union to enter wage negotiations with corporate behemoths recently, but the strikes haven't lasted long, and corporate management has had the upper hand in most recent instances.

Workers at Verizon struck for three weeks in spring 2011 against the company's decision to cut pensions and benefits. The two unions involved, the Communications Workers of America and the International Brotherhood of Electrical Workers, represent about 45,000 wireline workers, and they've recently begun federal mediation with Verizon to conclude the year-long dispute.

Meanwhile, wireline workers at AT&T have had a series of brief strikes against similar corporate demands, and while some 22,000 workers have reached agreements with the company, another 20,000 remain without contracts, according to the Wall Street Journal. 

Unions are desperate to keep members and maintain collective bargaining ability, but the wind is blowing in companies' favor, with private sector membership at its lowest in decades and the number of strikes also on the decline, according to numbers from the Bureau of Labor Statistics.

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Striking workers would rather be employed with a bad deal than out of the street, said some of the IAW members who were in favor of taking the offer from Caterpillar. 

“If there was a better agreement out there to be had, we would have taken it,” Steve Jones, a top union official, said to the New York Times.

Some labor observers are appalled by the deal, like the Huffington Post's David Macaray, who accused Caterpillar of seeing "these negotiations as an opportunity to stick it to their workers, once and for all."

For more of GlobalPost's coverage of labor, check out our Special Report "Worked Over: The Global Decline of Labor Rights."

http://www.globalpost.com/dispatches/globalpost-blogs/rights/caterpillar-outmuscles-workers-corporations-unions