Caterpillar Inc. and United Steelworkers Local 1343 are entering the third week of negotiations at the company’s South Milwaukee plant.
This is the union’s first contract negotiation since it became part of Caterpillar in the company’s acquisition of Oak Creek-based Bucyrus International Inc. in July 2011.
USW representatives meet with Peoria, Ill.-based Caterpillar daily, but progress has been slow, the union said in a release.
“Management is still seeking sweeping changes to our layoff and seniority language and demanding unfair concessions in other major economic and non-economic areas,” the USW release said.
Caterpillar also renewed its contract with Milwaukee Area Technical College. MATC is training some salaried and management personnel for production jobs at Caterpillar.
The company has said the training is part of its contingency workforce planning, which the company undertakes as a normal part of its planning cycle prior to union negotiations.
“We remain committed to negotiating a fair contract that acknowledges our contribution to the company and makes our jobs, wages and benefits more secure,” USW said.
Meanwhile, Caterpillar today reported first quarter sales and revenues of $13.2 billion, down from $15.9 billion in the first quarter of 2012. Profit was $880 million, down from $1.5 billion last year.
“In our year-end 2012 financial release, we said the first quarter of 2013 would be challenging, and it certainly was,” said Chairman and CEO Doug Oberhleman. “As expected, inventory changes were a major factor. Caterpillar and our dealers usually add inventory in the first quarter to prepare for higher end-user demand in the spring and summer. In the first quarter of 2012, we added about $2 billion to inventory, but this year, we cut inventory by about a half billion dollars. In the first quarter of 2012, Cat dealers added machine inventory of about $875 million, and this year, they reduced machine inventory by about $700 million. Those are significant year-to-year swings, and coupled with moderating end-user demand, resulted in sales and revenues being down 17 percent.”
Citing declining demand, the company recently announced it will temporarily lay off 250 to 300 of its South Milwaukee employees by June and permanently lay off 460 supplemental employees from its plant in Decatur, Ill.
In the earnings release, Caterpillar said it expects continued slow economic growth in 2013 but will have a tough year.
“Our revised 2013 outlook reflects a sales decline of about 50 percent from 2012 for traditional Cat machines used in mining and a decline of about 15 percent for sales of machines from our Bucyrus acquisition,” Oberhelman said.
“From an operational standpoint, we have taken action to align production, costs and capital expenditures with the sales and revenues outlook. While 2013 will be a challenging year, we are confident about the long-term prospects for our business, and when conditions improve, the steps we have taken will position us well to serve our customers and deliver better financial results.”
