Caterpillar Inc. (NYSE:CAT) said on Wednesday it has entered into a 6-year pact with its worker union that has been demanding higher wages related to the cost of living index, lower health care premiums and seniority rights to be honoured.
The company, that makes components for trucks, tractors and other heavy machinery, did not disclose the details of the agreement. The deal has to be ratified by members of the International Association of Machinists and Aerospace Workers, the vote for which will be held Friday.
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On May 30, machinists had rejected a similar proposal which had been hammered out. The union's district office brokered a preliminary agreement to offer $1000 bonus but very little over the earlier proposal.
The agreement offers workers hired after May 2005 to receive a 3 percent wage rise over the life of the six-year contract. Wages would be frozen for workers hired before that date. The proposed contract would also double health care premiums and eliminates pensions. Seniority rights would be diminished.
The union with which the deal has been struck represents about 800 workers at Caterpillar's Illinois plant, who have been on strike since early May pressing for their demand.
Both company management as well as union officials have agreed not to discuss the details of the agreement publicly, the company said. The two sides had been deadlocked in negotiations with no solutions in sight since June, after the failure of the earlier proposal.
Early this month Illinois Governor Pat Quinn had offered to mediate and pitched in with a $10000 donation from his election campaign fund to a food fund for the striking workers.
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The union has spent about $1 million on the striking workers so far, based on 800 union members each receiving a $150 weekly stipend from the union, as well as not paying union dues of about $90 a month.
Shares of CAT are up 0.45% to $88 in the pre-market session.