Caterpillar Inc. and the United Auto Workers last week began negotiations for a new labor agreement. The current contract, ratified in 2005, will expire on March 1, 2011. The agreement covers approximately 9,500 production and maintenance workers at the company’s Illinois facilities in Aurora, Decatur, East Peoria, Mapleton, Mossville, Morton and Pontiac, as well as those in Colorado, Pennsylvania and Tennessee. Both parties have agreed to make no public comments on contract issues during the negotiations process. The meetings are taking place in Caterpillar Building CV in East Peoria, Ill.

In the opening session, the company said it seeks to reach an agreement that is fair to all parties and helps the covered facilities compete in the international marketplace. Caterpillar also reinforced its commitment to providing competitive wages and benefits, a safe work environment and the flexibility to succeed in a volatile global economy.

“Caterpillar’s strategic approach to the global financial crisis was both timely and effective,” said Chris Glynn, Caterpillar’s director of corporate human relations. “Even though our sales fell $19 billion in one year, the company retained its focus on delivering excellent customer service and high-quality products while reducing costs. As a result of these actions, we were positioned to respond as the business continues to recover and we have recalled nearly all of our production employees.”

Glynn said that the company’s negotiating team would work diligently to reach an agreement that would allow these plants to compete and serve the growing global markets.

“A strong, profitable company is the best source of long-term job security and community stability,” Glynn said.

During the first meeting with representatives of the UAW, Caterpillar addressed the competitive challenges facing the company in the post-recession marketplace. The remarks included information about the dramatic increase in the number of manufacturers of excavation and earthmoving equipment, especially in emerging economies.

Headquartered in Peoria, Ill., Caterpillar Inc. had 2009 sales and revenues of $32.4 billion.