I wrote about the strike at the Caterpillar plant in Joliet, Illinois, three months ago. Cat was absorbing a strike of union workers who were being asked to accept a six-year wage freeze and a cut in health care benefits to keep their jobs at the hydraulic components plant one hour southwest of Chicago.
This past week the workers took a slightly modified deal, against the wishes of the officers of the Association of Machinists and Aerospace Workers. Cat raised a proposed $1000 ratification “bonus” to $3100 to tip the vote to their side and is converting a $7.8 million dollar fund that had been used to supplement the wages of laid off workers into a pot sweetener for older workers who are being paid well to retire.
Cat earned $5 billion last quarter, but still threatened the Joliet plant’s striking workers with moving jobs either to other North American plants or abroad. The recent closure of a London, Ontario, factory after the workers rejected a 50% pay cut by Cat, validated the threat of a plant closure if the workers refused the company offer.
The workers’ capitulation at Caterpillar in Joliet, which is only a half hour away from our Oak Forest facility, finally evens the playing field between big companies and their job shop suppliers. It will enable Cat to keep more work in-house because their labor costs will be more competitive with local companies, but it will also even up the hiring landscape for skilled workers, many of whom prefer the atmosphere in smaller well-run suppliers to big company regimentation and union peer pressure.
At the same time the Caterpillar union news came out, the even more astonishing news appeared that “tenure as we know it” for New York City public school teachers had been broken. This had long been a goal of New York Mayor Michael Bloomberg, and he finally gained the upper hand against the entrenched unions in the city that made it so difficult to prune weak teachers when they got their tenure card after three years on the payroll, even if they stunk at their jobs.
In Chicago, Rahm Emanuel, the new mayor, is also pushing back against the Teachers Union with some success. The housing recession in Chicago has kept yuppies with kids locked into their homes, when they normally would have moved to the burbs for better schools. Many of them are getting active in their local schools, giving Emanuel an important ally in pushing for change in the system.
Recently, Motorola Mobility, now a division of Google, announced they were moving a huge number of jobs to downtown Chicago from the Northwest suburbs. This puts more pressure on Emanuel to upgrade the public schools in order to enable companies like Motorola Mobility to hold onto and hire younger workers with children.
It is an interesting development in American politics that ambitious and smart politicians like Bloomberg and Emanuel have chosen local office rather than Washington jobs. They probably have done so because it is actually possible to make meaningful change in a relatively short period of time in a city if you can control the levers of power – not that different from the position of Douglas Oborhelman, CEO of Caterpillar Inc.
Question: Does the Caterpillar labor deal make you happy or mad?