MILWAUKEE, May 1 (UPI) -- United Steelworkers Local 1343 in Milwaukee said its members turned down a proposed contract with Caterpillar Inc. that would have frozen wages for six years.
The proposal also called for increased employee contributions for healthcare benefits, less security for senior union employees and a lower starting pay for new hires, the Chicago Tribune reported Wednesday.
The vote count was not released, but the Tribune said the contract was turned down "overwhelmingly."
The company has announced 40 percent of the 800 workers at its South Milwaukee plant will be laid off in June due to soft demand for mining equipment, the newspaper said.
"Everybody is scared. But our membership has stuck together," said Ross Winklbauer, a Steelworkers regional director.
The union has not called for a strike, but the contract rejection authorizes one.
Union leaders said they would prefer to re-open contract negotiations, although the company, by law, can lock out employees as of midnight Wednesday, the newspaper said.
"We will now assess the situation and determine what, if any, are the appropriate next steps in this process. In the meantime we will focus on working safely, meeting production levels and conducting business as usual as we focus on meeting customer needs," Caterpillar said in a statement.