The proposed six-year contract would have frozen wages for more than 800 workers at the South Milwaukee plant at $18-$34 an hour, increased health care contributions and offered senior union employees fewer protections, the Chicago Tribune reported.

The workers voted down the contract while also approving a strike. Caterpillar now has the right to lock out employees, as the previous contract expired midnight Tuesday.

A strike has not yet been called by the union, which said it was interested in returning to the negotiating table and would continue to work while negotiations proceed.

USW president Leo W. Gerard released a statement calling upon Caterpillar management to resume good faith negotiations with the union on behalf of 803 workers at plant.

Gerard said that the USW is ready to resume bargaining immediately and encouraged negotiators on both sides to find creative solutions and reasonable compromises to resolve issues at the table.

“Steelworkers in South Milwaukee have earned and deserve a fair contract that preserves these family and community-sustaining middle class jobs for the long term,” Gerard said.

“We also understand that a strong, healthy company means more security for our employment, earnings and benefits.”

While the USW is negotiating with Big Yellow, it made some strong statements last week about Caterpillar chief executive officer Douglas Oberhleman’s 32% pay rise from $16.9 million to $22.4 million last year, calling it “shameful and unwarranted”

USW District 2 director Michael Bolton said rewarding Oberhelman’s job performance by boosting his compensation by nearly a third last year, despite lower than expected earnings, sent a dangerous message to other CEOs that lining their pockets at the expense of their workers was somehow acceptable.

“In 2012, Caterpillar Inc put 700 people out of work by shutting down its Electro-Motive Diesel plant in London, Ontario after locking out its workers when they rejected a 50 per cent pay cut,” Bolton said.

“Then the company bullied almost 800 workers into major wage and benefit concessions after a three-month labor dispute in Joliet Illinois.

“In South Milwaukee, Caterpillar management threatened to lay off 40 per cent of the plant less than a week before our negotiations started and when we got to the table the company proposed unnecessary, sweeping changes to our contract language and continues to demand unfair concessions in other major economic and non-economic areas.”

The plant in question is one that was owned by Bucyrus for 18 years. It came to Caterpillar as part of that company’s takeover of Bucyrus.