Caterpillar capitalism triumphs

The almost 800 striking Machinists at Caterpillar in Joliet, Ill., voted last week to accept the company’s contract offer, which included almost the same give backs on wages, health care and pensions as the one they rejected some four months ago. The local leadership urged a “no” vote on the offer negotiated by the union’s district leadership. Reports say the vote was close, but the strike-weary workers relented to the company’s demands: wage and pension freeze, double the health care costs, replacing current pension plan with 401-K and seniority rights curbed.

Caterpillar threw in a few crumbs it didn’t have before, namely, new hires will get a 3% raise over the course of the six-year contract, a higher ratification bonus and time limits on management’s ability to override seniority on jobs and overtime.

What makes this concessionary contract significant is Caterpillar is rolling in record profits to the tune of $5 billion last year. Caterpillar is seen as a workforce trendsetter in manufacturing. The highly profitable trendsetter demanded and won concessions from its union employees, achieving its goal of so called market wages. That means bringing its employees down the wage ladder to equal the area’s going rate – about $13 bucks an hour. Caterpillar begins it, who’s next, a profitable John Deere? Other highly profitable companies?

The workers said they expected Caterpillar to be able to pay for what the workers had before this new contract. They didn’t want to go backwards and expected in a time of record profits of “sharing” the wealth, instead of giving millions to the CEO, top execs and, of course, the sacred shareholders.

That’s what The New York Times called Caterpillar capitalism.

Earlier this year Caterpillar broke the Canadian UAW local at its London, Ontario operation when it locked out the 465 workers. The company then transferred the work to a nonunion plant in Indiana, which recently became a “right to work for less” state.

Pitting union workers against nonunion workers or American against foreign to compete for jobs at ever spiraling down wages is an old capitalist tactic called whipsawing or better yet, race to the bottom.
With the current economic climate – huge wealth gap between the global haves and the 99% have nots, productivity up, job creation down, unemployment up, wages down – corporations are in the drivers seat. People think a job at $13 an hour is better than nothing.

Is there a solution? Not easy ones but it starts with building a united labor and people’s movement globally and locally, one that has an approach to political and legislative action along with strikes and protests. The first steps that can help such a movement to grow are the ones Americans will take to the voting booths in November. A possible Romney administration with a Republican Congress and ultra-conservative Supreme Court will put the movement on the defensive while giving a bright green light to corporate America and turning over the levers of government to them.

Photo: Caterpillar strike picket line, August 1, 2012. PW



PW Editorial
PW Editorial

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