04/30/2012 11:44 am ET Updated Jun 30, 2012

Caterpillar Prepares For Strike After Union Rejects New Contract Offer

* IAM workers voted down contract offer on Sunday

* 800 workers making hydraulic parts are affected

* Caterpillar says production will not be slowed

* Caterpillar shares down 1.9 percent

April 30 (Reuters) - Caterpillar Inc is preparing for a strike at its Joliet, Illinois, plant after union workers there overwhelmingly turned down a new six-year contract during weekend voting.

The world's largest maker of construction machinery does not expect a strike to disrupt production at this point. The labor dispute comes as Caterpillar is scrambling to meet growing demand for its machinery in North America.

About 800 workers at the company's Joliet manufacturing facility are covered under a contract, which expires early on Tuesday morning. They are represented by the International Association of Machinists and Aerospace Workers, or the IAM.

Caterpillar spokesman Rusty Dunn said the outcome of the vote, which took place on Sunday, was "unfortunate" and that the company hoped to avoid a work stoppage. But production will continue, even if the current workforce decides to walk out.

"The Joliet facility will continue to work safely, meet production levels and conduct business as usual as we focus on meeting customer needs," Dunn said. "Caterpillar has work plans, processes, policies and people ready to be deployed in the event of any business interruption, whether it is a tornado, fire or a strike."

Dunn said Caterpillar and the IAM had been negotiating for more than a month. The terms of the new labor pact were not disclosed, but Dunn said the company had put forth a "competitive contract offer."

IAM officials were not immediately available for comment.

IAM workers in the Joliet plant produce hydraulic components and systems for a variety of Caterpillar machines, including track-type tractors, wheel loaders and mining trucks.

The labor dispute in Joliet follows a high-profile conflict between Caterpillar and the Canadian Auto Workers late last year. Caterpillar had employed hundreds of CAW-represented workers at a London, Ontario locomotive plant.

The company closed the plant after failing to come to terms with the CAW.

Shares of Caterpillar were down 1.9 percent at $102.61 in late morning trading.