Caterpillar and Unionized Workers Agree on New Contract

  • Editorial Team
  • News
  • 29 March 2023

On March 13, Caterpillar workers who are members of the United Auto Workers union unanimously approved a new six-year contract with the company. To prevent a strike, discussions began in early January, and a preliminary deal was struck in the first week of March. The agreement’s parameters are binding immediately and apply to 7,000 workers at Central Illinois as well as York, Pennsylvania’s parts distribution facility.

Compensation and Benefits in the New Contract

Employees will get a $6,000 ratification bonus, a 19% salary raise, 8% in lump sum bonuses, additional night-shift premiums, and increased company contributions to retirement benefits per the new contract. The United Auto Workers union will provide its members 7% immediate pay rise in addition to 4% general income growth in March 2025, 2027, and 2028. In March 2024 and 2026, 4 % lump-sum payouts will be made.

Equalizing Wages for All Workers

According to the corporation, employees recruited after 2005 will be subject to an identical pay schedule as those hired before 2005 by the contract’s conclusion. Employees covered by the two-tier salary and benefit schedule previously received varying pay rates under the prior contract for the same job.

Agreement on Plant Closures

Over the course of the agreement, Caterpillar promised not to close any plants with union representation. In 2017, the business shut down its Aurora, Illinois, facility, shifting manufacturing there, and firing hundreds of employees.

Comparison to Other Recent Labour Disputes

It should be noted that it was only after CNH Industrial, the manufacturer of Case, and New Holland construction and agricultural machinery finally resolved their issues with their workers and ended the 9-month strike, that a few months later their new agreement came to pass. After this strike the new CNH contract assured the workers of shift premium increases, classification upgrades and other improvements apart from the pay raises.

There was also a five-week strike by the unionized workers at Deere and company in 2021 and it was only resolved after the employees received 10% raises and better retirement benefits.