Caterpillar came close to bankruptcy in the early 1980s, at one point losing almost US$1 million per day due to a sharp downturn in product demand as competition with Japanese rival Komatsu increased. (At the time, Komatsu used the internal slogan "encircle Caterpillar".)Caterpillar suffered further when the United States declared an embargo against the Soviet Union after the Soviet invasion of Afghanistan, causing the company to be unable to sell US$400 million worth of pipelaying machinery that had already been built.
Due to the drastic drop in demand, Caterpillar initiated employee layoffs, which led to strikes, primarily by the members of the United Auto Workers, against Caterpillar facilities in Illinois and Pennsylvania. Several news reports at the time indicated that products were piling up so high in facilities that replacement workers could barely make their way to their work stations.
In 1992, the United Auto Workers conducted a five-month strike against Caterpillar. In response, Caterpillar threatened to replace Caterpillar's entire unionized work force. Over ten thousand UAW members striked again in 1994–1995 for 17 months, a record at that time. The strike ended with the UAW deciding to return to work without a contract despite record revenues and profits by Caterpillar.[83] In 1994 Caterpillar offered a contract to the UAW members that would have raised the salary of top workers from $35,000 to $39,000 per year. However, the UAW was seeking the same top wage of $40,000 that was paid to workers at Deere & Company in 1994.During the strikes, Caterpillar used management employees in an attempt to maintain production. Caterpillar suspended research and development work, sending thousands of engineers and other non-bargained for employees into Caterpillar's manufacturing and assembly facilities to replace striking or locked out union members.
Rather than continuing to fight the United Auto Workers, Caterpillar chose to make itself less vulnerable to the traditional bargaining tactics of organized labor. One way Caterpillar achieved its goal was by outsourcing much of Caterpillar's parts production and warehouse work to outside firms. In another move, according to United Auto Workers union officials and industry analysts, Caterpillar began to execute a "southern strategy". The "southern strategy" involved opening new, small plants, termed "focus facilities", in right-to-work states. Caterpillar opened these new, smaller facilities in Clayton and Sanford North Carolina, Greenville South Carolina, Corinth Mississippi, Dyersburg Tennessee, Griffin Georgia, LaGrange and Seguin Texas and North Little Rock Arkansas.
21 comments:
What some unions still haven't grasped is that while they have the right to strike, companies have the right to shut down, and in this day and age it is easy for them to find cheaper labour elsewhere.
Was Steve jobs 'apple' unionized-don't think so which let apple to be sucessful.
Pissedoff, you are right, when businesses feel threatened by union strikes Up and away they leave. who is to blame for their leaving the country but the union itself.... unfortunately the little worker who just want to work and earn a living suffers more than the union 'big shots'
From what I have read Lewenza made all the decision, not sure if he even put the offer to a vote, maybe Paul knows. As far as unions I lived in the UK and saw what happened to the Auto industry and the miners strike in the 60 & 70 with darling Harold as PM.
Nope, no vote. I wonder what the outcome would have been had the workers voted on the offer.
Looking at the offer so would I, so the worker know who to blame.
With the advent of immigration into Canada I dare suggest that the companies will simply find new Canadians that will gladly work for half what the union wants!
There are companies in Alberta that only hire immigrants cause they worker cheaper and harder.
I don't think the workers would have accepted the offer. I dare say not any of people commenting here would go into work tomorrow for half of what they made last week. But this is Schadenfreude to anybody making lower wages, isn't it? "If I can't have it, they shouldn't get it either".
There's a new reality show coming out soon starring Ken Lewenza.
It's called "The Closer"
Love it.
Happens enough times and the unions will finally get the hint.
Terrible price but welcome to reality.
at the wage of $16 or so an hour, I would be making more cleaning ice and toilets at my city arena. non-union as well. it's a huge slap in the face from a company posting such large profits.
but the company has the right to do what it wishes with itself.
When these workers attempt to go out into the private sector and find that their private sector counterparts make half of what they do any way, then they are going to be kicking themselves and cursing their former union. At least if they were going to make the same wage working for Caterpillar, they could have at least saved their seniority. But their constant demands got them where they are today. It is ever thus - ye reap what ye sow.
How to not predict the future. The Toronto Star has an article about the players who acted on this stage of absurd union vs company farce. Its not the CAW, Caterpillar, or the provincial government aka Dalton who could have changed the course of events - TA!!!! DA!!! its Stephen Harper. Next thing you know, the federal government will be negoitiating with ever union on every level - federal, provincial and municipal. Why bother with the othe two levels - save the taxpayer some tax dollars. Avoid the middle governments. Sassafrass!!!
These union members are a bunch of sissy's. Why can' t they stand up to their leaders and start demanding answers. I would have been calling for Lewenza's immediate resignation and negotiating my own contract with caterpillar. I might have been called a scab, however, when the union leaders are so out of touch with reality I'll do what I need to do to put food on the table. I would bet lots of your union brothers would have followed.
Asking employees to take a 50% reduction in salary is significant. Most of the employees were probably living on a $34.00 an hour wage and so taking the reduced salary would be a huge adjustment. However, having said that the unions have got to understand that companies have choices. The old days are gone and people like Lewenza who want to play chicken with multi nationals are in for a big surprise. Lewenza was not smart. He should have put it to a vote. Now he is hung out to dry and is the only one responsible for the loss of jobs.
We are losing our mfg. sector fast. Soon we will only have the energy and service sectors supporting our economy. With the attacks on the energy sector and our inability to move raw bitumen we will soon be just a service sector based economy. It is notorious for paying low wages. The standard of living of Canadians is going to fall dramatically over the next 20 years.
It is my understanding that the proffered contract did NOT have a straight 50% drop in wages for all employees. If this is so, then those peddling that line are at the very least disingenuous in their attack upon Caterpillar and the Harper government.
There has been enough published everywhere on this topic,and yes, there are a few people, I think maybe 6% who are getting a small cut, but the majority of the workers plus loss in benefits would have made it average least a 50% cut.
This situation makes Russ Hiebert's Bill to force labor Unions to show where the money goes,even more timely and appropriate.
If the CAW is so gung ho to look after their workers,why don't they use their millions in dues to buy up the companies and get a member on the Board of Directors.
The Unions share of the profits could flow straight into the Pension fund.
But labor Unions seem to like investing in real estate,not the companies where their members work. Makes no sense to me.
Reportedly, wages for skilled tradespeople would have dropped from $40-43 an hour to $34. Wages for unskilled labor would have gone from $34 to $16-18.
The first part I have no problem with, but laborers being paid higher wages than non-union tradesmen? That's unacceptable, sorry...and a large part of the reason for this closure. 34 dollars an hour for sweeping floors? Seriously?
A CAW that blows $2 million of union dues on a wind turbine, at a facility [Family Education Centre], that is $5 million in the hole, can be hazardous to your job. Lewenza is quite simply out of control.
Great depiction of Caterpillar/CAW dispute over on Quixotes Last Stand (www.quixoteslaststand.com)
http://quixoteslaststand.com/2012/02/11/what-happens-when-you-dont-keep-your-eyes-on-the-prize/
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