Workers Agree to End Strike at Caterpillar

CHICAGO â€”  In a surprise breakthrough after more than five months of bitter deadlock, a federal mediator announced late Tuesday that the approximately 13,000 striking United Auto Workers at Caterpillar Inc. had agreed to go back to work.

At the same time, Bernard DeLury, head of the Federal Mediation and Conciliation Service, said that the earthmoving equipment giant had also agreed to drop its efforts to hire replacement workers for the strikers. The company began job interviews for those replacements only Monday.

The development, which came after two days of talks between DeLury and negotiators for the two sides in suburban Chicago, breaks an impasse in a dispute that went beyond wages and benefits disagreements and evolved into a fierce power struggle.

However, even with both sides now agreeing to resume operations while continuing to negotiate, Tuesday’s action still leaves up in the air the deep-seated philosophical differences between labor and management that fed the walkout.

“For now it is over and it took a lot of guts and a lot of courage on both sides,� DeLury said.

The conflict has been watched closely by both business and labor analysts as a bellwether dispute that had the potential to rewrite the complex relationships between unions and management for years to come.

In Peoria, Ill., the company headquarters and home to most of the striking workers, there was an air of elation and confusion over just what the agreement meant.

Dave Risinger, vice president of UAW Local 974 and a Caterpillar pipe fitter, said he did not know any specifics about what had been negotiated other than that workers were expected to report back to their regular shifts today.

“Everybody’s thrilled,� Risinger said in a telephone interview. “The pressure’s been alleviated a little bit.�

However, one striking worker, John Paul, of Aurora Local 145 told the Associated Press: “I think everyone is going to feel bitter about going back. You know this is a hard pill to swallow.� He added: “We’ve not lost yet. You’re not lost until both sides sign a contract.�

Asked whether the union would walk out again if the company refused to negotiate further on its latest contract offer, Bill Casstevens, UAW’s secretary-treasurer, told the news service: “That’s always an option. We’re not going to be negotiating from the company’s last offer.�

Caterpillar is the world’s largest maker of heavy construction equipment and enjoys a reputation in the industry for producing top quality products which command premium prices. Though most of its manufacturing facilities are located in Illinois, the company exports nearly 60% of the tractors, earthmovers, cranes and loaders it makes.

The strike began last Nov. 3 when the UAW called a few thousand workers off the job at two key Caterpillar facilities in Central Illinois. The firm quickly retaliated by locking out more workers and the strike began to spread. Two weeks ago, the company raised the stakes by ordering strikers to go back to work or risk being replaced.

Until then, few bargaining sessions had been held and the two sides appeared at an impasse. But that changed after DeLury made a special appeal to Caterpillar Chairman Donald Fites and UAW International president Owen Bieber.

Over the months, the company had offered its workers modest salary increases as well as job security guarantees but had also insisted on changes in health care benefits and pension programs--and the right to pay newly hired workers less than what current workers make. Such changes would help it more adequately compete in a global marketplace, the company argued.

The union had balked at all such suggestions, demanding that the company follow longstanding practice and pattern its contract offer after packages already agreed to by other farm implement and construction equipment makers. The union viewed the company proposal as part of a long-term strategy to undermine labor clout and make it harder in the future to negotiate fair deals.

Caterpillar’s last offer would raise top minimum pay--for workers already employed--from $35,318 annually to $39,915 by September, 1994. The union wants top minimum pay of $40,458 annually by September, 1994, and does not want new workers hired at pay scales that lead to a lower top minimum.

In essence, the agreement at least delays the day of reckoning between the two sides. But, DeLury cautioned, there is much work to be done before a contract can be reached.

“Basically,� he said, “there’s a lot to talk about. I went out on a limb and made several recommendations. I think both (the company) and the UAW acted in a statesmanlike manner and accepted the recommendations.

“I hope they (the negotiations) will take place next week,� he continued. “They’re going to need time to go through the machinery (of getting back to work). We’ll let that settle first. . . . We’ll let the dust and emotions settle.�

Times staff writer Eric Harrison and researcher Tracy Shryer contributed to this story.