Two-tier wages at Caterpillar eliminated in six-year pact ratified by UAW

The United Auto Workers on March 13 started working under a new, six-year contract with Caterpillar after a ratification vote the previous day resulted in 71.5% voting union members supporting the Tentative Agreement, according to Reuters. Neither the UAW nor Cat said how many ballots were cast.

Most significantly, perhaps, is the elimination by the end of the contract of the unpopular two-tier wages initiated in 2005, when new hires were paid less than existing workers.

Although the complete Tentative Agreement apparently wasn’t available to members until the day of the vote, outlines of the terms from both the company and Decatur UAW Local 751 includes:

* a $6,000 signing bonus that may be spent or placed in workers’ 401(k) accounts,

* a fifth week added to vacations after 20 years,

* improved layoff pay, to $170/week,

* after the initial 7% wage hike, workers get a 4% lump sum in 2024 and 2026, and 4% raises in 2025, 2027 and 2028,

* the company increasing its matches to workers’ retirement contributions from 50% to 75%,

* Cat making one-time $10,000 contributions to workers at 20 years of seniority, and

* “maintaining the current medical, dental and vision plans,” says the company, although it’s unclear whether that will apply to premiums, co-pays, deductibles, etc., other than there will no changes “unless the same changes are made for management employees.”

Also, paid parental leave is doubled to 80 hours, the company will provide or underwrite required equipment such as welding helmets and work boots, Cat will make available reports from the Occupational Safety and Health Administration (OSHA) and consider recommendations for corrective measures, and the company claimed that its wage forecast will mean a Labor Grade 1 worker now making $17 will have wages increased to $20.47 by 2028 and a Labor Grade 6 workers will improve from $33.85 to $40.75 by the end of the contract.

Now headquartered in Irving, Texas, Caterpillar in 2022 posted profits of $6.7 billion on $59.4 billion in sales, the corporation reported.