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Auto Workers, Caterpillar agree on concessions.

Auto Workers, Caterpillar agree on concessions

The Auto Workers agreed to a 28-month contract with Caterpillar, Inc., that essentally froze wages and included changes in the job structure intended to hold down labor costs, despite an increase in profits at the company. (Caterpillar earned a $139 million profit during the second quarter of 1986, up from $50 million in the second quarter of 1985.) In return, Caterpillar agreed to establish a job security program and an employee development and training program to help reduce the number of workers on layoff. The accord covered 16,600 active and 13,000 laid-off workers in six States. Much of Caterpillar's problems in selling its construction equipment and diesel engines result from increasing penetration of U.S. market by foreign manufacturers.

Under the new Protected Employee Group program, 90 percent of the employees in the bargaining unit will be protected against layoffs resulting from economic conditions or marketplace changes, "sourcing' decisions, introduction of new technology, productivity improvements, and consolidation of operations. Exclusions from the job guarantee include temporary layoffs of up to 6 weeks a year; work force cuts resulting from labor disputes or sale or cessation of operations; and layoffs resulting from events beyond the company's control. Caterpillar will commit a total of $21 million to this program and to the job retraining program, which will also use any available financial support from Federal and State governments.

The retraining program is aimed at providing new skills for workers. It will particularly aid senior employees who in the past might have been laid off because they lacked skills needed to move into other jobs. Reportedly, 1,000 to 1,200 of such laid-off employees will be retrained and rehired during the next 18 months.

The provisions for automatic quarterly cost-of-living pay adjustments was continued at 1-cent-an-hour for each 0.26-point movement in the BLS CPI-W (1967=100), subject to a total diversion of 23 cents an hour over the term. The diverted money will be used to help pay for the job training program and other contract provisions.

Current employees will receive a $180 immediate lumpsum payment, and those returning from layoff by July 10, 1987, will receive this payment when they resume work.

For current employees, normal pension rates were increased by $3.05 a month for each year of credited service; the "30-and-out' pension was increased to as much as $1,205 a month; and, if Caterpillar requests employees to retire early to reduce employment levels, the company has the option of adding a $300 a month inducement to regular early pensions. All current retirees will receive a $1 a month increase in their benefit rate plus $200 payments in December of 1986 and 1987.

Other provisions included a 4-cent-an-hour increase in the company's maximum financing of Supplemental Unemployment Benefits, which will help to eliminate the reduction in benefits being suffered by laid-off employees because of the large number drawing from the fund; an additional paid holiday, the birthday of Dr. Martin Luther King, Jr.; and changes in the profit-sharing plan that will raise payouts by 75 percent, according to the union.

Elsewhere in the industry, Deere & Co. and the Auto Workers agreed to extend their contract to October 17, 1986, from May 30, 1986, to await the outcome of the Caterpillar talks. (After the Caterpillar settlement, Deere and the UAW changed their expiration date to late August.) Deere, the Nation's largest farm equipment manufacturer, reported a $33.4 million loss during the quarter ending April 30, and was in the process of reducing operations. The union's contracts with J.I. Case Co. for its original farm equipment operations and for those it purchased from International Harvester Co. (now Navistar International Corp.) in 1985 expire in February 1987. Navistar now manufacturers only trucks. Its contract with the Auto Workers was scheduled to expire September 30, 1986.
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Title Annotation:United Automobile Workers, collective labor agreement
Publication:Monthly Labor Review
Date:Sep 1, 1986
Previous Article:AT&T, IBEW lead communications contracts.
Next Article:Copper industry gains labor costs reductions.

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