Caterpillar Inc. CAT

Caterpillar and Boeing Both Face Trouble From their Unions

After rejecting a proposed contract at the end of May, Caterpillar union workers will yet again have to vote on a similar contract on Friday. The earlier rejection came a month after the workers set down their tools and walked away.

Caterpillar and Boeing Both Face Trouble From their Unions

The estimated 800 machinists who dropped their tools were all members of the International Association of Machinist and Aerospace Workers.

According to workers, the tentative contract, more or less, has the same lineaments as the previously rejected contract. Workers claim that the new contract, which was brokered by Caterpillar Inc. (NYSE:CAT) and the union’s district office, extends a $1000 bonus among other benefits traceable to the earlier rejected contract. Considering that this tentative contract extends a somewhat similar package to the earlier rejected contract, there are high possibilities that tomorrow’s vote will work against the proposed contract.

A sneak peek into the proposed contract reveals that it favors workers who were hired after May 2005. This section of workers will be eligible to a 3 percent wage increase all through the six-year contract. Apart from diminished seniority rights, the proposed contract also extends double health care premiums and stamps out pensions. On the flip side, wages will be frozen for workers hired before May 2005.

“We have to balance what we lost and what we gained,” commented one striking worker who opted for anonymity for the obvious reason of protecting himself from the retaliatory action of his employer. “It’s not easy for anybody,” he further lamented.

Another worker, who also hid behind the veil of anonymity, expressed his sentiments in a more blatant fashion, citing that his suspicions pointed towards the union’s undeclared reluctance to spend more money on striking workers. “Basically what our own union is doing is throwing us under the bus to stop the bleeding of money,” he remarked.

This proposed contract, coupled with Boeing’s controversial contract, raises alarm over the nature of contracts in the current corporate space. With regards to the latter, the company has been accused of using trickery. Boeing, which is engaged in contract talks with the union, is alleged to have used tactful maneuvers in its talks.

In a message to the union, Ray Goforth expressed his dissatisfaction with The Boeing Company (NYSE:BA), noting that the company was stalling in its obligation to hand workers a good deal. Goforth is the executive director of the Society of Professional Engineering Employees in Aerospace.

Tomorrow, Caterpillar Inc. (NYSE:CAT)’s contract will face the ballot, as workers decide on what they deem to be best for them.


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