Caterpillar vs. Machinists: Giveback contract whets Wall St.’s appetite

With anger and tears, a narrow majority of union machinists at the Caterpillar plant in Joliet, Ill., voted on Aug. 17 to accept a six-year contract that imposes deep cuts and drastic concessions. The workers had been on strike since May 1.

The 780 highly skilled workers, who make hydraulic parts, are represented by Machinists Local Lodge 851. The local leadership had opposed the contract, which was negotiated by a union official from the district level.

Caterpillar cannot cry poverty in demanding these big concessions. The company banked record profits of $4.9 billion in 2011 and paid its CEO almost $17 million, a 60 percent raise for the boss over the year before.

The workers had earlier rejected almostthe same contract, which demanded a wagefreeze with no cost-of-living raises, the doubling of health care payments, a switch to a 401(k) for pension benefits, and the ability to reassign workers to new jobs or shifts indefinitely regardless of seniority.

The world’s leading producer of earthmoving machinery claimed it needed these terms in order to stay “competitive” in the world market. It also claimed that the top-tier of workers, who make up two-thirds of the plant’s labor force and average $26 an hour, earn substantially more than the local labor market average. Second-tier workers make between $12 and $19 an hour.

The capitalist media recognized the significance of this assault on the workers. The New York Times consistently called it “a test case in American labor relations,” noting in its July 23 article that Caterpillar was “trying to pioneer new territory, seeking steep concessions from its workers even when business is booming.”

The contract ratified on Aug. 17 by a slim majority was modified only slightly from the original offer. The wage freeze remains for top-tier workers, while the second tier receives a 3 percent raise later this year. Workers can still be assigned to new jobs and shifts despite seniority, but only for a maximum of 90 days.

All other terms are the same as in the original offer, except that all workers will get a $3,100 ratification bonus and the company might give second-tier workers cost-of-living raises — depending on “local labor market conditions” during the contract.

One labor relations professor told the Aug. 18 New York Times, “It sure is a step back,” though the union “managed to maintain the bargaining relationship.”

The Aug. 17 Wall Street Journal was more blunt in advising big capital about what it can get away with: “The vote to return to work is the latest sign that unionized employees have little power to buck employers’ demands for concessions. High unemployment is making workers wary of risking their jobs, and Caterpillar [has shown it is] willing to shift production away from areas where unions are strong.” Earlier this year, Caterpillar closed a Canadian plant when the workers refused to accept a 50 percent pay cut.

Workers World Party militant, Fred Goldstein, in his 2009 book “Low-Wage Capitalism,” demonstrated that capitalism is now a truly global system of exploitation that seeks ever higher profits by pitting workers around the world against each other in order to pay the lowest wages. His most recent book, “Capitalism at a Dead End,” drives the point home that the ruling class intends to make the working class bleed in a ruthless attempt to keep its floundering system going.

These books also discuss the need for new tactics and strategies to supplement and strengthen the strike weapon at a time, just like the 1930s, when losing one’s job is a constant threat. But just as workers moved from strikes to sitdowns during the Great Depression, in a giant organizing wave that reshaped class relations in the U.S., so must workers today go outside the box to effectively fight the bosses. (See

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