Caterpillar Inc. took the first step Friday to end its bitter contract dispute with the UAW and called back 5,600 workers locked out by the company. It also sought renewed talks with the union.
Company officials said the action was ”a good-faith” bid to end the nation`s largest labor confrontation, which has placed a heavy burden on Illinois` slumping economy.
The company`s decision does not affect the 2,400 United Auto Workers on strike, but Caterpillar said it would begin recalling the 1,500 workers laid off as a result of the dispute.
The confrontation also has put a squeeze on parts-supply firms for Caterpillar and businesses in the idled workers` communities.
The Peoria-based company said it would begin calling back workers to its Aurora and East Peoria facilities as of the third shift Feb. 16. It similarly asked the union to go back to the bargaining table Feb. 17.
Speaking at a press conference in Peoria, Caterpillar officials said they would make ”some modifications” in their contract offer, but they refused to offer details.
UAW officials, who have vowed not to bow to Caterpillar`s refusal to accept bargaining patterned on the union`s agreements with other U.S. machinery and farm-implement manufacturers, reacted warily to the news.
”I don`t know what their motive behind this is. I guess that is why I am so cautious,” said Jerry Baker, chairman of the UAW`s bargaining committee.
UAW spokesman Karl Mantyla in Detroit said the workers who were locked out would be urged to return to their jobs.
More Top Picks Farberware Classic Fmo11ahtbkb
Peoria Mayor James Maloof, who recently called a meeting of UAW, Caterpillar and local officials to urge an end to the financially costly dispute, welcomed the company`s decision.
”Thank God,” he said. ”We just hope and pray that the UAW members will accept this offer and come back to work while the bargaining committee and Cat continue to negotiate.”
”They (Caterpillar) flinched first,” said Eli Lustgarten, a securities analyst with PaineWebber in New York City.
He suggested Caterpillar was not seriously hurt by the strike because it had a six-month inventory when the dispute began. It is probably searching now for a solution because it wants to get production started by spring, he added. However, Frank Manfredi, editor of the industry newsletter Machinery Outlook, said the confrontation has hurt Caterpillar, and company officials are reluctant to admit it.
”I suspect that they have either run out of inventory or they have some orders that have to be produced,” he said. The company is ”probably keeping stuff together with baling wire and Scotch Tape, but you can only do that for so long,” he said.
The company`s last contract proposal, which the UAW turned down within minutes, offered to raise wages and benefits by $5 an hour or about 16 percent over three years. There would be a pay freeze for 3,700 workers at the lowest pay scales. These workers account for about 22 percent of the UAW`s nearly 17,000 Caterpillar members.
But they would be eligible for an across-the-board cost-of-living increase, which the company said would average about $1.62 an hour by the end of the contract.
A major snag in negotiations was the company`s request for a separate contract for its parts employees, and a second tier of lower wages for newly hired employees. The union balked at the proposal, saying it would eventually tear away at the union`s contract with the company.