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Caterpillar reaches tentative deal with union, averting possible strike

Kemal Pasha

(Adds Caterpillar’s statement)

March 1 (Reuters) –

Construction equipment maker Caterpillar Inc said on Wednesday it reached a tentative six-year labor agreement with a union that represents workers at its four facilities, possibly fending off a strike.

Union workers had threatened to strike for wage increases, improved safety measures and better healthcare benefits once the existing six-year labor contract expires.

The United Auto Workers (UAW) said its negotiating team had reached the tentative agreement before the contract ends on March 1.

“Members at four locals in Illinois and Pennsylvania will review the tentative agreement and vote at upcoming ratification meetings,” the UAW said in a statement, without giving any other details.

The UAW will schedule a ratification vote soon, Caterpillar said in a statement.

“The current agreement will be extended until the voting is complete,” the company added.

The contract covers roughly 7,000 union employees represented by the UAW at three manufacturing plants in central Illinois and a parts and distribution center in York, Pennsylvania.

A shortage of labor in a robust demand environment has raised costs for heavy machinery companies like Caterpillar and rival Deere & Co and has given unions the leg-up to negotiate better contracts.

In January, union workers at the four Caterpillar facilities voted almost unanimously to authorize a strike, according to one local union’s Facebook page.

Contract negotiations between the UAW and the Irving, Texas-based manufacturer began on Jan. 5, the company said.

Caterpillar has more than 100,000 employees worldwide. In 2021, workers at two plants in Northern Ireland went on strike for 14 months before reaching an agreement. The last strike at the company in the U.S. was in May 2012. (Reporting by Aishwarya Nair and Maria Ponnezhath in Bengaluru; Editing by Sonia Cheema and Nivedita Bhattacharjee)

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