Caterpillar, which has significantly raised its executives’ compensation because of its strong profits, defended its demands, saying many unionized workers were paid well above market rates. To run the factory during the strike, the company is using replacement workers, managers and a few union members who have crossed the picket line.

The showdown, which has no end in sight, is being closely watched by corporations and unions across the country because it involves two often uncompromising antagonists — Caterpillar and the International Association of Machinists — that have figured in many high-stakes labor battles.

“Caterpillar has been a leader in the past 20 years in taking a hard line,” said Richard Hurd, a professor of industrial relations at Cornell. Last winter, Caterpillar locked out about 450 workers at its locomotive plant in London, Ontario, and then closed the factory after the union rejected its demand to cut wages by 55 percent. In the mid-1990s, the company vanquished the United Automobile Workers after a 17-month strike by 9,000 workers at eight factories; the union surrendered and accepted the company’s concession-filled offer.

The machinists have carried out largely successful strikes at Boeing and Lockheed Martin, ultimately winning better raises and benefits for thousands of members.

Robert Bruno, a labor relations professor at the University of Illinois, said Caterpillar was trying to drive compensation down to a new floor. “Caterpillar sees this as ‘the new normal,’ while this union local feels you have to draw a line in the sand to hold on,” he said. “Some people are saying the union should be more deferential, more compliant, that it’s a bad time to strike. How can you counter a powerful multinational in this economy?”