The Conflict at Caterpillar

...Louis public relations firm of FleishmanHillard, Caterpillar raised the stakes again, declaring that it would fire striking workers who did not return to their jobs...

...At a time when the number of strikes involving a thousand or more workers has dropped from an average of over threehundred a year in the 1960s to just forty in 1991, the struggle being waged by the United Auto Workers (UAW) against the Peoria-based Caterpillar company, the world's largest manufacturer of construction and earth moving equipment, has become a test case...

...Even more important, the Caterpillar work force, which took a terrific financial battering while plants were shut down, is anything but a beaten rank and file...

...The response was not enough to offset the fact, as Jerry Brown noted, that "Caterpillar kicked our ass in the media...

...Technically, the strike—although not the picketing—at Caterpillar continues as far as the UAW is concerned...

...Caterpillar counters that as a global competitor, which makes 75 percent of its products in America and exports 59 percent of them, it deserves a settlement different from the one negotiated with a company like Deere that focuses on the domestic market...

...Even before he took command of Caterpillar, the 58-year-old Fites, who has worked for the company since 1956, was pushing for a leaner operation...

...Check all your figures, dates, names, etc...

...In 1990, when its current CEO, Donald Fites, took over the direction of Caterpillar, the company was confident it was in a position to put pressure on the union for new concessions...

...But in exchange for labor peace, the union agreed to dramatic reductions in job classifications and conceded that it would not fight the tremendous job losses it had incurred at Caterpillar during the 1980s...

...Suddith makes no apologies for the bar incident...

...The aim is rather to show that by doing everything by the book, "checking our brains at the plant gate," as O'Connor puts it, rank and file can naturally slow production...

...What brought the United Auto Workers to this crossroads did not happen over night...

...If the UAW cannot impose pattern bargaining—or win the crucial battle for public opinion—against a company like Caterpillar, what is it going to do against General Motors, with its declining sales and 74,000 scheduled layoffs...

...Ray Rogers, who brought the corporate campaign to national prominence in the 1970s in textile worker strikes against Farah Slacks and J. P. Stevens, is even more critical of UAW leadership...

...But it was recognition that in a state like Illinois, with a 7.8 percent unemployment rate, Caterpillar's newspaper ads and television spots made it all too easy for unemployed workers to offer to cross UAW picket lines...

...Making matters even more difficult was the trust Caterpillar had cultivated with its Employee Satisfaction Program...

...Casstevens's claims do not, however, reflect the position the UAW finds itself in at the moment...

...But in a town where Caterpillar's influence is overwhelming, you don't find intimidated workers...

...Just a way to get us to feel better...

...The idea, as UAW staffer and former Local 974 President Jim O'Connor explains, is to have the membership understand that such an action is very different from a traditional slowdown or sabotage...

...In 1979 the UAW waged an 80-day strike with Caterpillar and in 1982-83 fought a marathon 205-day strike that damaged the company badly and depleted the savings of most workers...

...For Tucker, the UAW failure to gauge Caterpillar's willingness to replace its work force reflects how out of touch and unprepared it is to take on the battles labor will have to fight in the 1990s...

...And please remember that we can't return articles unless they're accompanied by a stamped, self-addressed envelope...

...5) We're usually quick in giving editorial decisions...

...In contrast to Caterpillar, which even when its plants were shut managed to hold on to its 30 percent share of worldwide construction equipment sales, the Detroit auto makers have been steadily losing business to Japan...

...Caterpillar Shapes the World" signs line the backs of bus benches, and in downtown Peoria Caterpillar's gleaming, modern headquarters dominates Courthouse Plaza and its Civil War memorial...

...Caterpillar's inventories are now down, and last year it ran a $404 million deficit...

...Peoria is a perfect case in point...

...Caterpillar, for its part, was able to use its period of peaceful co-existence with the UAW to strengthen itself...

...Such criticism angers UAW officials, who talk about 20/20 hindsight...

...As contact expiration drew closer, Fites was not, however, content to rely on Caterpillar's work force to make an agreement so radically different from the one it had known in the past...

...The settlement Caterpillar has imposed promises to gut the union's ability to represent its work force...

...Nearby Local 751 in Decatur was down to 2,000 from a 1979 total of 4,500...

...Its population and real estate market are down, and its manufacturing jobs have gone from 53,350 in 1978 to just 32,000 in 1991...

...Kennedy is far from alone in believing that the UAW leadership mismanaged the Caterpillar strike, fighting the company with outdated tactics...

...By 1991, when it began its current strike at Caterpillar, the UAW was in a much more vulnerable position than the company...

...The union wants to keep its current health plan, which involves company-paid premiums at any hospital...

...It will define labor relations for the nineties and define the way U.S...

...At the core of FALL • 1992 • 451 the strike is the UAW's determination to continue the pattern bargaining it has had at Caterpillar since 1958 and win from it a contract comparable to the one it signed with John Deere in October 1991...

...Or take a chance and send us your article...

...But in this strike wages and health benefits are merely a point of departure...

...Most of them will not directly feel the penalties of Caterpillar's proposed contract while on the job...

...The coming months promise to answer how quickly the UAW can move in that different direction...

...He points to Casstevens's appearance at the Caterpillar shareholders' convention as having little connection to a thought-out corporate campaign that would target banks and other institutional investors in Caterpillar, putting pressure on them to get Caterpillar to settle its strike on very different terms from the ones it is now offering...

...Local 974 in East Peoria was down to 9,000 from a 1979 total of 24,000...

...During the spring the UAW also began responding more directly to Caterpillar's public relations campaign...

...Caterpillar wants workers with two or more dependents to pay premiums of nearly $30 a month and to cover full medical expenses only with designated providers...

...As University of California labor professor Harley Shaiken observed in April, "This is a watershed strike...

...Since PATCO, the copper company Phelps Dodge, Louisiana Pacific's lumber operations, Eastern Airlines, and Greyhound Bus Lines have all sought to win strikes by replacing their regular workers...

...This April, 163 days later, the UAW's 12,600 strikers went back to work under a Caterpillar-imposed contract...

...We're going to be negotiating on our own offer," Casstevens declared...

...firms compete in the global market...

...When in 1986 and again in 1988 the UAW signed contracts with Caterpillar without striking, it was breaking precedent, but it was not doing so without paying a price...

...But according to the 1990 census, taking the pulse of Peoria no longer promises reassuring answers about middle America...

...Returning strikers found chaos on the shop floor in plant after plant, and since then, there have been newspaper reports of management-built Caterpillar equipment costing dealers dozens of hours of repair (in one highly publicized case, ninety-two hours of work on eight $700,000 dump trucks...

...It cuts over-time, allowing the company to put a worker on a "flex" schedule that makes weekend hours or a ten-hour day routine...

...Its members believe they have taken the worst of what Caterpillar has to give, and they don't fear what comes next...

...The UAW ordered its striking workers to return to Caterpillar on April 14...

...Look at our last few issues to see if your idea fits in...

...If you think of the history of this town, where Lincoln and Douglas debated on the courthouse steps and Charles Lindbergh once flew the air mail, it seems like the right question to ask...

...For Fites, this meant that Caterpillar would no longer engage in pattern bargaining with the UAW...

...Far better, they argue, to begin with an in-plant, work-to-rule strategy designed to slow production, and combine that with a corporate campaign that would pressure Caterpillar's investors and put the company on the defensive in the media...

...From 1987 through 1990 the company recorded enormous profits, topping the $600 million mark in 1988...

...The UAW's chief mistake, its critics argue, was going to a strike so early rather than as a last resort...

...The PEORIA, ILLINOIS UAW's decision to send its strikers back to their jobs came just eight days after Caterpillar threatened to replace any UAW worker who failed to return...

...With locals like 974, it is difficult to imagine the UAW not going all out in its strike against Caterpillar...

...At an April 14 press conference, UAW Secretary-Treasurer Bill Casstevens insisted that the UAW was being "statesmanlike" and responding to the recommendations of Bernard DeLury, the director of the Federal Mediation and Conciliation Service...

...It had a work force that had dropped by 24,000 since 1979 and locals that were a shadow of their former selves...

...is, however, a key question for the 1990s...

...By the time the Federal Mediation and Conciliation Service arrived on the scene and arranged for a cooling off period, an estimated 47,000 calls had come into Caterpillar offices in response to the job openings it had advertised...

...If the United Auto Workers understood what a corporate campaign is, they wouldn't find themselves in the predicament they face at Caterpillar," Rogers insists...

...The UAW is now training its rank and file to carry out an in-plant, work-to-rule campaign...

...It is clear that as Caterpillar goes so goes the economy of Peoria...

...But after five months off the job, Caterpillar's workers, many of whom lost upward of $15,000 between November and April, are no closer to the contract they want than they were last fall...

...We're not going to be negotiating on the company's last offer...

...In front of the union hall flies the American flag and, below it, a second flag with the silhouette 454 • DISSENT of an imprisoned soldier and the words, "POW-MIA, You are not forgotten...

...In challenging the union but offering its veteran work force six years of guaranteed employment plus wages that will average nearly $19 an hour by 1994, Fites was gambling...

...If there's a delay, it's because a few editors are reading your article...

...Jerry Tucker, the leader of the militant New Directions movement within the UAW and an unsuccessful candidate for the UAW presidency at its convention in June, is among those with fears...

...But the actions of UAW leaders, especially since sending their strikers back to work under the terms imposed by Caterpillar, suggest that in fact much of the criticism has been accurate...

...A company like Caterpillar, which has not given up an inch of market share, has to put some limits on how fast incomes can grow to stay competitive," Fites told the New York Times last November...

...On November 7, it locked out 5,650 workers, setting in motion the forces that would eventually bring the total number of UAW strikers to 12,600...

...As eighteen-year Caterpillar veteran John Backus notes, "It was a bunch of crap...

...Roger Suddith, a lathe operator at Caterpillar for twenty six and a half years, is someone the company has singled out, firing him for "strike-related misbehavior" after he called another worker a "scab" during an argument in a local bar...

...Last November the United Auto Workers struck Caterpillar...

...Peoria is in trouble...

...At issue is whether a major manufacturing company like Caterpillar can, by threatening to replace its striking work force, neutralize what up to now has been labor's ultimate weapon...

...On April 8, two days after Caterpillar's stated deadline for replacing striking workers, UAW Secretary-Treasurer Bill Casstevens made an appearance at Caterpillar's annual shareholders' meeting and set off an explosive question-and-answer period when he openly challenged the company's version of the contract it was offering its workers...

...For the American labor movement, Will it play in Peoria...

...Workers had gone out of their way to institute money-saving procedures, and many believed that a new era had begun at Caterpillar...

...Since it began representing Caterpillar workers in the late 1940s, the UAW and the company have always had a tough time negotiating contracts...

...Above all, it threatens future jobs, providing six years of security for those now at Caterpillar in exchange for the company gaining the right to reduce its work force by attrition or by contracting out jobs...

...It is hard to imagine both auto executives and UAW rank and file, all too aware that since 1979 UAW membership has dropped from 1.5 million to 900,000, not taking notice and being influenced in how they fight...

...The last thing the company needs is a work-to-rule campaign that hurts production...

...Most important, Caterpillar's demand for give-backs has boxed the UAW into a corner...

...It undermines seniority, curtailing a worker's ability to transfer from one Caterpillar unit to another if his job is eliminated...

...If only wages and health benefits divided the UAW and Caterpillar, this strike could be settled...

...For Rogers, the UAW's multimillion dollar war chest and 12,600 striking workers were an enormous resource that could have been used to build public support not only in areas where Caterpillar has plants but across the country...

...Then in April, after an intense media campaign run with the aid of the St...

...The differences between the union and the company are not overwhelming...

...they're the author's responsibility...

...In these two contracts the union got wage increases and job guarantees, and in conjunction with the company began a Japanese-style Employee Satisfaction Program (ESP) that stressed workermanagement cooperation...

...Instead, he has gotten a lawyer and has taken his case to the National Labor Relations Board, convinced that what Caterpillar is really trying to do is intimidate workers like him, who now find themselves back at their old jobs alongside those who in April crossed picked lines...

...Nobody is expected to risk his or her job by an illegal action or to refuse a proper order from a supervisor...

...Caterpillar is offering $39,915...

...Citing Caterpillar's global position—second in net exports to the Boeing Company—and its rivalry with Japan's giant earth-moving equipment maker Komatsu, Fites insisted that the time had come for 452 • DISSENT Caterpillar to get a different deal from the one that linked its labor contracts to American rivals John Deere, Cummins Engine, and Detroit Diesel...

...A believer in the in-plant campaign and an opponent of the kind of workermanagement programs the UAW had with Caterpillar, Tucker sees the UAW's Detroit leadership as a millstone around the Caterpillar workers' necks...

...The UAW's critics find it hard to believe that a decade after Ronald Reagan broke the Professional Air Traffic Controllers Organization (PATCO) strike by bringing in permanent replacement workers, there should have been any doubt at UAW headquarters that Caterpillar would use similar tactics...

...There is little doubt that it has the resources to carry on the marathon battle it now seems in for, and despite its unsuccessful November to April strike effort, the union has some advantages it didn't have then...

...We will not consider manuscripts submitted simultaneously to several publications...

...2) Please don't write to ask whether we're interested in such and such an article—it makes for useless correspondence...

...As we're not an academic journal, we prefer that they, wherever possible, be dropped altogether or worked into the text...

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...In the months leading up to November, Caterpillar built up its inventories, and on November 3, when the UAW began a selective strike, pulling out 2,400 workers in East Peoria and Decatur, the company was in a position to retaliate...

...4) Notes and footnotes should also be typed double-spaced, on a separate sheet...

...The Caterpillar fight can be won, but it will take a whole different direction from the one in which the UAW has gone," Rogers argues...

...Although it had begun its battle with Caterpillar with an $820 million strike fund and could have gone on much longer (even with paying health benefits, $100 a week strike pay, and bonuses up to $2,000), the UAW decided not to risk further erosion of its position and the likelihood that an increasing number of its own workers would cross picket lines...

...UAW members who FALL • 1992 • 453 have fought work-to-rule campaigns have been brought in to conduct workshops, and the idea is to put entire plant units through work-to-rule training sessions as soon as possible...

...There is no doubt that Peoria is a company town...

...What is at stake for the UAW is, however, more than just the lives of its Caterpillar workers, who represent less than 2 percent of its membership...

...Although Fites admitted before a Congressional committee that production workers are just 6.1 percent of Caterpillar's expenses, he was determined to reduce their cost still further...

...But the union also has some severe problems...

...The UAW is seeking a top minimum wage of $40,458 by September 1994...

...To Our Contributors: A few suggestions: (1) Be sure to keep a copy of your manuscript—the mails aren't always reliable...

...The Employee Satisfaction Program, designed to bring the union and the company together, is now looked at very differently from the way it was earlier...

...The contract Caterpillar wants the UAW to sign guarantees a two-tier wage system in the coming years...

...He was appealing to the self-interest of a work force that averages forty-four years of age and twenty-two and one half years on the job...

...They did all the right things that labor unions have done since 1945," New York labor lawyer Tom Kennedy would later observe of UAW's Caterpillar strategy...

...With the auto makers, which employ 400,000 UAW members, the union has the benefit of letters of agreement barring the use of replacement workers...

...As a company vice president, he masterminded a reorganization plan designed to give individual Caterpillar units more autonomy, and on taking command of Caterpillar, he quickly made its unionized work force his primary target for change...

...Among the union's critics, there is hope mixed with fear...

...For the UAW the threat to replace its work force came as a shock...

...3) Type your ms double-spaced, with wide margins...

...Even those who have the most to gain from an early agreement with Caterpillar aren't backing down...

...Most of our people didn't believe the company would try to replace its workers," Local 974 President Jerry Brown acknowledges...

...Less clear is where the UAW is heading in terms of corporate and media campaigns against Caterpillar...

...6) Please bear with us—we have accumulated quite a backlog of material, and you may have to wait for a few issues before you see your article in print...

...This is a union where tradition and loyalty matter...

...Can the UAW turn around a fight in which it has clearly lost the first round...

...UAW Local 974 stands at the edge of East Peoria on a road that borders a cornfield...

...Although UAW officials are reluctant to draw parallels between the Caterpillar strike and next year's contract negotiations with the Big Three auto makers— UAW President Owen Bieber insists it is like "comparing apples to russet potatoes" —the linkage is going to be made on both sides...

...Caterpillar workers can retire with full benefits and a one-time $4,000 bonus after thirty years, and more than sixty percent of Caterpillar's current workers will be eligible to do so within the next six years...

...THE EDITORS q FALL • 1992 • 455...