Caterpillar to cut 10,000 jobs, close and consolidate facilities
Caterpillar plans to cut 10,000 jobs and close 20 manufacturing facilities to save $1.5 billion annually.
Caterpillar Inc. will cut over 10,000 jobs and will close and consolidate more than 20 manufacturing facilities, the company announced Sept. 24. Between 4,000 and 5,000 management and other salaried employees will lose their jobs, most by the end of 2015. The other cuts will affect workers in more than 20 of Caterpillar’s 103 manufacturing facilities around the world, as the company closes and consolidates plants and reduces its manufacturing space by over 10 percent between 2016 and 2018. The Peoria, Illinois-based company did not specify what facilities would be affected. However, given that Caterpillar employs 21,600 workers in Illinois, and has eight manufacturing plants across the state, the company expects the local impact “to be significant,” according to Caterpillar spokeswoman Rachel Potts, as reported in the Peoria Journal Star.
Caterpillar plans to save $1.5 billion in costs annually through the layoffs and plant closures. Due to weakened demand in the global oil and mining sectors, the construction and mining equipment manufacturer has had three consecutive years of declining sales and revenues. If this trend continues in 2016 as predicted, Caterpillar’s sales will have decreased four years in a row for the first time in the company’s 90-year history.
Caterpillar has already cut 31,000 jobs since 2012 and has shuttered over 20 facilities, according to the Chicago Tribune. The September news comes on the heels of August layoffs in which 300 Illinois employees lost their jobs.
In 2011, Caterpillar CEO Doug Oberhelman wrote a letter to state lawmakers detailing exactly what needed to be done to help Illinois compete for quality jobs and business investment. His recommendations included genuine workers’ compensation reform and a balanced state budget that offers tax certainty and relief in the long term.
“Business leaders are making decisions today on where to invest in the future,” Oberhelman wrote. “Illinois must act now, with a bipartisan sense of urgency, to position itself for future job creation that is being discussed in boardrooms all across this country.”
“When Caterpillar and most other companies look to locate a new factory in the United States, Illinois is not in the running for such projects. It doesn’t have to be that way.”
The mayor of Peoria, Jim Ardis, expressed his concern over the layoffs and Illinois’ economic condition, as reported by the Chicago Tribune:
“Our state is hemorrhaging manufacturing jobs, and it has been for some time. We’ve lost 300,000 manufacturing jobs since 2000.”
Companies contend with the ups and downs of the global economy every day. These job providers should be able to look to their home states to make it easier, not harder, for them to conduct business and employ people. But Illinois, through its anti-growth workers’ compensation system, high taxes and hostile legal climate, makes it needlessly expensive and complicated for employers to operate in the Land of Lincoln. The state must clear these barriers to growth to provide every resident the best chance to earn a living.