With end of long strike at Caterpillar, a blow to US labor movement

Machinists striking against Caterpillar since May 1 have voted to accept a new labor contract that calls for concessions on benefits and a virtual freeze on wages. It's not much to cheer for manufacturing workers, analysts say.

Matthew Grotto/SouthtownStar/AP
In this Aug. 15 photo, striking members of the International Association of Machinists and Aerospace Workers wave to passing motorists that honked their horns outside the Caterpillar Inc., plant in Joliet, Ill. The bitter strike ended Friday, as workers at the plant in Joliet, agreed to numerous concessions, including a virtual pay freeze.

The end of a machinists' strike at Caterpillar Inc., after a 3-1/2-month standoff, not only points to the weakened state of the American labor movement, but also bodes poorly for the manufacturing worker – even those in high-skill jobs that many say are the future of manufacturing in the US.

The bitter strike ended Friday, as workers at a plant in Joliet, Ill., agreed to numerous concessions, including a virtual pay freeze. Members of the International Association of Machinists and Aerospace Workers had been on strike against Caterpillar, one of the world’s largest heavy equipment manufacturers, since May 1.

“It’s one more small piece of evidence that the lower half of the income distribution is struggling while the people at the very top are faring quite well,” says Richard Hurd, a professor of labor studies at Cornell University in Ithaca, N.Y.

The workers agreed to concessions that have become familiar in labor negotiations throughout American manufacturing. The six-year contract froze pay for older and higher-paid workers and granted a 3 pecent raise for newer, lower-paid workers. Like many manufacturers, Caterpillar pays newer workers at a lower wage scale than older workers. Workers at the Joliet plant, which builds hydraulic components for heavy machinery, earn wages ranging from $11.50 to $28 an hour.

Workers also agreed to Caterpillar’s demand that they pay more for their health insurance and switch from a defined benefit pension plant to 401(k)s. Each worker will receive a $3,100 bonus for ratifying a new contract.

The machinists’ defeat suggests that “wages in manufacturing will be flat in the foreseeable future,” says Michael LeRoy, a professor of labor relations at the University of Illinois at Urbana-Champaign.

Analysts say they were surprised by one twist in the dispute: The concessions were demanded not by a company struggling to survive, as US auto makers were in 2008 and 2009 when auto workers agreed to concessions to help keep American car manufacturing afloat, but by a thriving firm. Indeed, Caterpillar is earning record profits, including a profit of $1.7 billion in the second quarter of this year, 67 percent higher than a year ago. Last year top executives also received hefty raises.

The machinists had previously rejected two offers from Caterpillar, but the strike’s length had begun to wear them down. About 780 workers went on strike, and union officials conceded that more than 100 had since crossed the picket line to return to work. Striking workers had received $150 a week in strike benefits from the union.

Caterpillar has been described as a hard-nosed negotiator in labor relations. Experts say it wasn’t always so. Until the 1980s, the company enjoyed fairly amicable relations with workers, says Mr. LeRoy. But the company suffered a long slump and emerged as a much more “aggressive”  company, he says. In the 1990s, it fought the United Auto Workers Union – and won. Early this year, Caterpillar shut down a plant in London, Ontario, in a labor dispute that cost 450 workers their jobs.

Caterpillar argued that it needed to reduce labor costs because of the possibility of more difficult times in the future. But such arguments “don’t stand up to logical analysis,” says Robert Bruno, professor of labor and employment relations at University of Illinois at Urbana-Champaign. In that case, he says, workers would never share in their companies’ prosperity.

Caterpillar did not return messages Friday asking for comment.

Through many of the most prosperous years of American manufacturing, beginning in the 1950s, there was a “strong linkage” between the well being of workers and the prosperity of the companies they worked for, Mr. Bruno says. Workers prospered when their companies did, and they accepted concessions when their companies faltered.

“It was a path to social mobility and into the middle class,” he says.

That link is broken now, he says.

Strikes have become rare in the United States and now number in the dozens, instead of hundreds in past decades. Today only about 7 percent of workers in the private sector are unionized, compared with 35 percent in the 1950s.

“Workers have this sense that there’s a larger dynamic that’s playing out,” says Bruno. “If you cant wage a good battle and get a good contract now, when will you get one? In that sense, this is their last stand.”

Tim Flaherty, the plant manager in Joliet, said in a written statement that Caterpillar is happy that the strike has ended and that employees are returning to work. "I think everyone involved is ready to get this behind us," he said.

Workers who had gathered Friday morning at a union hall on the edge of Joliet, a working-class city just south of Chicago, to vote on the new contract endured an intense, emotional meeting that lasted several hours. Many workers left feeling angry and exhausted.

“I’m very disappointed,” said Sean Gallaway, who has worked at Caterpillar for 17 years and who voted against the new contract. “But we live in a democratic society, so I’m going to go with what the majority says.”

Although he's unhappy about how the strike ended, Mr. Gallaway says he'll be "glad to go back to work." 

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.