(FORTUNE Magazine) – In the 1980s, labor leaders talked glowingly of partnerships with management. But bitter strikes by the United Auto Workers at Caterpillar and the United Steelworkers at Lukens, a Pennsylvania steelmaker, signal an end to that love affair. Concludes Karl Mantyla, a UAW spokesperson: ''The spirit of cooperation is dead.'' Both unions refuse to give way on an old concept called pattern agreements, which are contracts similar or identical to those agreed to by other employers in their industries. Companies, the unions argue, should compete not on wages and benefits but on attractive products and manufacturing efficiencies. Bunk, say managers at Caterpillar and Lukens. They believe that pattern agreements no longer make sense in an increasingly complex world. The UAW, for instance, wants Caterpillar to accept an agreement like that of Deere, a competitor. But Caterpillar management argues the company does more business overseas than Deere and therefore needs a more favorable contract to compete with foreign producers. (For more on Caterpillar, see Personal Investing.) Similarly, the USW wanted Lukens to accept an agreement patterned after those at large steelmakers such as Bethlehem Steel and USX. Lukens, though, is a small maker of plate steel and requires much lower labor costs to stay competitive. The union later backed off and signed an agreement that met Lukens's needs. Why are the unions digging in? Some say the unions, backed by contracts that pay workers handsome wages long after they've been laid off, feel they have nothing to lose. In addition, UAW President Owen Bieber faces reelection in June and may not want to seem too cozy with management. Whatever the reason, both sides are likely to end up losers. Today companies must have the flexibility to react swiftly to market conditions. Those that don't will pay dearly, a price that is sure to lead to fewer union jobs.