The threat of permanent replacements is a dynamite tactic to break a strike, as recent events in Peoria show. But there is still the question of whether the tactic is valid in labor relations. We believe the United Auto Workers was wrong to insist that Caterpillar Inc. settle on the same terms Deere & Co. granted last year. The two are quite different: Cat, which exports 60% of its U.S. production, barely competes against Deere, which is largely a domestic company. Cat's main rival is Japan's Komatsu Ltd.
Yet the specifics of this dispute shouldn't obscure the larger significance of what happened. Permanent replacements have been used with increasing regularity recently, most often by companies on the verge of collapse: Continental Airlines, Greyhound, the Daily News, Eastern Air Lines. But Caterpillar, by contrast, is profitable. And the uaw may be the country's strongest remaining union. That the company's mere threat caused the union to crumble means that other healthy companies are likely to follow Cat's lead.
The issue will soon be before Congress, which is due to consider a labor-backed bill that would ban permanent replacements. We think a ban would be a mistake. The temper of the times suggests a compromise between fairness to striking workers and the reality of global competition. Any legislation should continue to permit a company to hire temporary replacements. If a strike lasts six months and an impartial mediator declares an impasse, then the temporary workers could become permanent replacements. That would allow time for bargaining before the threat of permanent replacement becomes a reality.