Caterpillar Strike Shows Weak US Labor

Machinists at a Caterpillar factory in Joliet, a city south of Chicago, have recently ended their three-month strike which has been ongoing since May 1. However, employment analysts say there is not much to cheer about, citing that even with the end of the strike, the US labor landscape looks totally grim, especially for those who belong to the manufacturing sector.

Led by the International Association of Machinists and Aerospace Workers, machinists finally ended their strike against Caterpillar with stipulations that Caterpillar, Inc., one of the world’s leading manufacturers of heavy equipment and construction machines, will grant a 3-percent raise for new, low salary-earning workers. However, strikers also agreed to the condition that workers would pay more for health insurance packages and would convert to a 401(k) benefits package from a defined benefit pension plan.

Michael LeRoy, a professor of labor relations at the University of Illinois at Urbana-Champaign, suggests that the laborers’ concession to the conditions with Caterpillar indicates a huge defeat for the workers and will have a serious consequence in terms of their salary in the long run.

“Wages in manufacturing will be flat in the foreseeable future,” said LeRoy.

Business analysts also find it surprising to see a thriving and stable firm such as Caterpillar experiencing massive employee strikes. The company is making record profits, which includes the $1.7 billion in the second quarter of this year. The figure represents a 67 percent gain compared to the year before. Caterpillar’s top executives also saw their pay rates shooting up.

In contrast, automobile manufacturers had to demand serious concessions from workers back in 2008 and 2009 in a struggle to keep the automobile industry alive during the high point of the financial crisis.

Caterpillar initially provided two offers to the strikers but each offer was turned down. However, the toll of the three-month long strike finally took a hold on the machinists and eventually forced some to cross the picket line and go back to work. The strikers originally numbered up to 780, but as strike went on more than 100 machinists returned to their stations. Laborers who went on strike were given $150 weekly to support their needs.

Officials at Caterpillar expressed that they were elated with the recent turn of events. The management is hopeful that everything will be placed in the past. “I think everyone involved is ready to get this behind us,” said Tim Flaherty, the plant manager in Joliet.

Caterpillar was not always a hardnosed company when it came to labor relations, experts have observed. Until the 1980s, the heavy machines manufacturer shared friendly relations with its employees. However, after suffering a long slump, Caterpillar came out as a more aggressive employer and engaged several unions in labor disputes – and won.

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