UPDATED 05/01/12 11:46 a.m.

JOLIET, Ill. (CBS) — Hundreds of union workers at the Caterpillar plant in Joliet were on strike Tuesday morning, after walking off the job at midnight when their contract expired.

As CBS 2’s Susanna song reports, the workers have swapped their tools and machines for picket signs, and plan to strike until Caterpillar gives them more money and better health and retirement benefits.

Third-shift workers say they came in to work for an hour, and then walked out. By 6:30 a.m., dozens of picketers were lined up.

along Route 6 just outside the Joliet plant.They are asking for for better wages and health care.

LISTEN: WBBM Newsradio’s Bernie Tafoya reports

The striking workers shouted and booed at any workers driving into the plant Tuesday morning, and cheered at passing drivers that honked in support.

They overwhelmingly turned down the new contract offer, and the previous contract expired at midnight.

The union members who are part of the International Association of Machinists Lodge 851 say they rejected the new contract from Caterpillar because it calls for stagnated wages over the next six years, and higher health care premiums.

“Pay increases that were offered were called market-based wage increases, which have no guarantee of any amounts,” union negotiating committee chairman Joe Nuske said. “So if they measure the market and it don’t go up, you don’t get a raise.”

Meanwhile, under the proposed contract from Caterpillar, health care premiums will double for a single person, according to the union.

Wally McClain has worked for Caterpillar for 17 years, and says he can’t keep up with the costs.

“I have a wife and two kids, and a house, a mortgage, just like everybody else,” McClain said, “and with the cost of health care and everything like that, you just can’t keep it up. You can’t do it.”

The vote on the latest contract offer took place on Sunday, and talks between the union and company broke down late Monday.

“We’re not going to take any concessions – bottom line,” McClain said.

A Caterpillar spokesman calls the strike unfortunate, but said it will not disrupt production at this point, and that production will continue.

But workers at the plant disagree.

“They need our parts,” McClain said. “They’re going to need us back.”

Nuske said the substitute workers being brought in during the strike were composed of “very few people who have been here before.”

Nuske says when talks failed Monday, the workers felt they had no choice but to strike.

“The senior members of our union want to be able to retire with dignity, and our younger members have a need to their feed family and provide for their wives and children,” he said.

The union says it is willing to meet with the company but as of now there are no further negotiations scheduled.

Caterpillar says the substitute workers are salaried employees who have gone through extensive training.

The strike involves about 800 workers at the company’s Joliet manufacturing facility. Caterpillar’s headquarters are in Peoria.

The Joliet plant manufactures hydraulic components used in tractors, wheel loaders and trucks.

The strike comes about a year after Caterpillar made headlines for considering leaving Illinois over a hike in the state’s corporate tax from 7.3 percent to 9.5 percent. But the company decided to stay following a meeting with Gov. Pat Quinn.