Caterpillar union workers approve a six-year labor agreement

The United Auto Workers (UAW) union announced that members at four local chapters working at Caterpillar (NYSE: CAT) voted in favor of a new six-year labor contract, averting a strike at the world’s largest manufacturer of construction and mining equipment.

Unionized workers unanimously approved the agreement, which included a 27% combined wage increase and lump sum payments over six years, an increase in employer contributions to retirement plans, and a $6,000 bonus.

“The contract terms are effective immediately (March 13),” the UAW said in a statement on Sunday.

Furthermore, the latest agreement included a moratorium on plant closures, following years of CAT shifting production to other U.S. facilities and closing its Aurora, Illinois, plant in 2017.

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The agreement covers approximately 7,000 union workers at plants in central Illinois as well as a parts distribution center in York, Pennsylvania. According to a Reuters report, 71.5% of union members voted to accept the tentative agreement. The union did not say how many employees voted.

Caterpillar union workers approve law

Caterpillar’s local union leaders said in a statement that they were pleased to have reached an agreement with management to avoid a strike like those experienced by rivals Deere (NYSE: DE) & Co. and CNH Industrial (NYSE: CNHI).

Rank-and-file union workers at the company have expressed outrage and frustration over the agreement, claiming that wage increases were insufficient in light of rising inflation.

However, some members believe the new contract is the best CAT has offered in years, after previously agreeing to company concessions that frozen wages during the Great Recession.

“It’s a good contract, and I just want it over with,” said a 40-year-old lathe operator who has worked at a Caterpillar plant in Peoria, Illinois, since 2006. The operator had not been permitted to speak to the media.

The UAW’s contract ratification with Caterpillar comes just six months before the deadline for the union and Detroit’s three automakers to reach new master contracts covering roughly 143,000 workers.