Cat announces more layoffs

Paul Gordon

A month ago Caterpillar Inc. officials warned that even with President Obama’s stimulus package passed by Congress, the job situation could get worse before it started to improve.

That came to pass Tuesday, when Caterpillar announced it plans to lay off an additional 2,365 employees at five plants in June, including another 911 in East Peoria.

The company also said it will close a facility in Georgia, eliminating 89 jobs.

The layoffs likely will last at least six months, the company said, while sounding yet another warning that the situation has probably not hit bottom yet.

“Depending on business conditions, more layoffs and separations may be required as the year unfolds,” the release said.

The layoffs, which would bring the total number of workers laid off at Caterpillar facilities worldwide to more than 24,000, are “due to lower volumes and to bring production levels in line with demand,” the company said.

In East Peoria, 861 hourly production workers and 50 support and management employees will be laid off at plants where track-type tractors and pipe layers are manufactured.

Other layoffs include 665 production workers and 150 support and management personnel in Aurora, where hydraulic excavators and wheel loaders are made.

Also, Caterpillar said 405 production and 34 support and management employees will be laid off at its large engine plant in Lafayette, Ind., and 200 employees — 189 production and 11 support and management — will be laid off at its engine plant in Griffin, Ga.

In Jefferson, Ga., 89 workers will be given severance packages when their jobs are eliminated. The work will be moved to Thomasville, Ga., and to Pontiac, the company said.

In Pontiac, the company will have one-week plant shutdowns the week of March 23 and again the week of April 13.

Caterpillar said it issued mass layoff notices as required to various governmental agencies under the U.S. Department of Labor’s Worker Adjustment and Retraining Notification (WARN) Act. The act requires 60 days notice of layoff.

These layoffs are the latest cuts announced by Caterpillar in the last few months as it implements “trough” plans to get through the economic crisis.

Besides layoffs — including more than 700 in East Peoria and more than 800 in Mossville — other actions announced earlier include other one-week shutdowns, hiring freezes and compensation cuts for executives and senior managers.

In addition, the company made early buyout offers to its U.S. employees and more than 2,500 accepted.

The total laid off includes about 8,000 contract and temporary workers, said Caterpillar spokesman Jim Dugan. There are about 10,000 production workers on the layoff list and about 5,000 support and management personnel, he said.

Asked whether the stimulus package was starting to help increase orders, Dugan said: “What we’ve said consistently is that the stimulus plan is not a light switch that can be turned on and suddenly turn things around. We said there was also a need for the global economy to turn around, if you recall.

“It will take time. If things start to turn around in the world economy, maybe we can start bringing people back. We remain confident we will again see growth.”

Rick Doty, president of United Auto Workers Local 974 in East Peoria, said the announcement wasn’t surprising in that the union was aware orders continue to be delayed or canceled.

However, Doty said he didn’t expect more layoffs until it was known whether rolling temporary weeklong shutdowns would be enough to stave them off.

“I guess not, huh? Of course, the first guy to feel it when things go bad is always the guy on the shop floor,” Doty said.

He added he isn’t sure how much more the company can go before it reaches the list of production employees and UAW members with by-name job security, meaning they retain full call-back rights. Doty said there are probably 5,000 workers with that security now.

“This is the kind of stuff that keeps you awake at night. But I’m sure they’ll bring our guys back when they need them because they’re the ones with the skills for the jobs,” he said.

Paul Gordon can be reached at (309) 686-3288 orpgordon@pjstar.com.