Caterpillar Defeats UAW Strike Using Permanent Replacement Threat, Pattern Bargaining Collapses

The United Automobile Workers ends its five-month strike against Caterpillar on April 14, 1992, after the company announces it will begin permanently replacing the 12,600 striking workers. The UAW—the union that pioneered industrial unionism with the Flint sit-down strike—capitulates without a contract, ordering members back to work under the company’s final offer. The defeat destroys pattern bargaining in heavy equipment manufacturing and demonstrates that even the most powerful industrial unions cannot withstand permanent replacement threats.

Caterpillar CEO Donald Fites refuses to match the contract the UAW negotiated with John Deere, breaking the pattern bargaining system that had governed heavy equipment industry labor relations for decades. When the UAW strikes on November 4, 1991, Cat continues production with management and brings in replacement workers. The union initially believes public pressure and solidarity will force a settlement, but Caterpillar proves that a profitable company willing to take short-term losses can outlast striking workers who face permanent job loss.

The Caterpillar defeat marks the effective end of pattern bargaining—the system where unions negotiate with one company and impose similar terms across an industry. Without pattern bargaining, employers can whipsaw workers, threatening to move production to lower-cost plants. The strike’s collapse also reveals the limits of solidarity strikes under Taft-Hartley: other UAW members cannot legally refuse to handle Caterpillar products, and secondary boycotts are prohibited. Caterpillar workers would strike again in 1994-1995 for 17 months, ultimately accepting a contract inferior to the one they rejected in 1991. The company’s victory demonstrates that by the 1990s, even legacy union strongholds can be defeated when corporations combine permanent replacement threats with legal restrictions on labor solidarity.