Cat announces layoffs as labor talks begin

Peoria, Ill.-based Caterpillar Inc. recently began labor negotiations with United Steelworkers Local 1343, which represents 803 workers at the company’s South Milwaukee plant.

Just days before the negotiations began on April 2, Caterpillar announced it is planning to lay off 250 to 300 employees at the plant by June.

Union officials say the timing of the layoff announcement is suspicious.

The negotiations with the union will be the company’s first since acquiring Bucyrus International Inc. in 2011.

USW Local 1343 sent the following update to its membership after learning about the plan to lay off workers:

“As most everyone should be aware by now, Caterpillar management informed us today that the company plans to lay off 40 percent of its workforce in South Milwaukee. Your USW negotiating committee is taking this threat very seriously, as you would expect. Your committee also believes the timing of this layoff announcement is hardly coincidental, with negotiations scheduled to begin in less than a week. We urge you to avoid overreacting or swallowing every detail that management tries to feed us over the coming weeks. We believe that Caterpillar is frustrated that our union didn’t panic over salaried and administrative employees ‘shadowing’ us on our jobs or its use of our publicly funded technical school to train potential scabs how to weld. Instead, we are calmly and thoroughly continuing to prepare for negotiations and investigating the company’s suspiciously timed layoff announcement…We anticipate the negotiations to be tough, though we are committed to fairness and ready to engage Caterpillar in good faith at the table. We expect management to do the same, despite the company’s recent attempts to intimidate us.

According to Caterpillar, the layoffs are a result of a slowdown in global mining.

Meanwhile, Bloomberg Business News analysts are forecasting a global bear market for iron ore, which has led to some iron ore mines to be closed and workers to be laid off in North America in recent months.

“Short-term layoffs and other actions will be taking place,” Caterpillar spokesman Rusty Dunn told BizTimes. “Various Caterpillar facilities and business units are taking action to bring our production in line with demand, including our operations in South Milwaukee. This includes some short-term temporary layoffs and other actions…We know this is difficult for our employees, but we are taking steps to better align with the current economic circumstances, while at the same time remain focused on positioning the company for long-term success.”

Caterpillar has been getting contingency workforce planning training for salaried and management personnel in case of a labor strike at the South Milwaukee plant. The training, which readies managerial and support staff for production jobs, is a normal part of Caterpillar’s planning cycle prior to any union negotiations, Dunn said.

The United Steelworkers asked Milwaukee Area Technical College to stop training Caterpillar’s salaried and management personnel for production jobs. MATC officials rejected that request.

The MATC training was intended to intimidate union workers, according to Ross Winklbauer, United Steelworkers union sub-district director of District 4.

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