- Construction equipment giant Caterpillar laid off 300 workers at a facility near its Peoria, IL, headquarters last week and announced a plan to potentially terminate thousands of overseas workers as it contemplates shutting down production in Northern Ireland and Belgium, the Pekin Daily Times reported.
- The 300 terminated workers in Mossville, IL, are office and engineering staff and do not include other possible Caterpillar employee reductions in the Peoria area.
- The latest round of layoffs, according to the Daily Times, is in addition to the 10,000 terminations the company announced in September 2015 as part of a $1.5 billion savings initiative.
The company said that the reason behind the overseas workforce adjustments is reduced demand for its equipment. Caterpillar also said that it would try to find American workers other jobs and that these latest layoffs did not mean it was giving up on Peoria, its home base for more than 90 years. However, plans to build a new headquarters there are on hold.
In July, the company announced that it had surpassed its second-quarter sales expectations but cautioned investors that it would most likely continue to suffer the effects of decreased demand throughout the rest of 2016. Caterpillar reported a year-over-year sales decline of 17% with machinery and engine operating profit plummeting 44%. The company cited global conditions, instability and international events as factors contributing to its stalled growth. It also had to break the news to investors that, although it had saved $670 million as part of its cost-cutting initiative, those savings were eaten up by $700 million in downsizing expenses.
Caterpillar said it expects to be complete with its workforce reduction by the end of 2018. The company's cost-cutting plans, in addition to putting 20 of its facilities on the chopping block, also include the closing of five manufacturing plants in North Carolina, South Carolina, Florida and Mississippi by the end of 2017.
This past May, Caterpillar executives visited Cuba in anticipation of the existing trade embargo between the U.S. and the island nation being lifted in the not-too-distant future. Cuba offers potential business opportunities for American companies; however, experts say that Cuba must overhaul its laws to make investment in that country a profitable proposition.