Caterpillar Inc. (IW500/23) announced on Friday that it will close a plant in Prentice, Wis., manufacturing forest products equipment, eliminating 220 jobs in the latest development of its cost-saving/restructuring program. The Forest Products Division plant will transfer its operations from there to plants in LaGrange, Ga., and Victoria, Tex., by the end of this year.
Reportedly, Caterpillar is negotiating a sale of the plant in north-central Wisconsin, though it did not detail that effort and all the employees there will be (administrative, support, and production workers) are affected by the shutdown. No additional jobs are expected to result at the Georgia or Texas locations, because the current staffs of those plants are said to be sufficient for the volume of work being transferred.
Caterpillar’s Forest Products division manufactures machinery and attachments used in timber harvesting, loading, and processing.
Caterpillar also is eliminating 230 office and production positions in East Peoria, Ill., consolidating some manufacturing and transferring work to outside contractors. Another 120 employees in East Peoria will be placed on indefinite layoff.
A fuel-systems plant in Thomasville, Ga., will be closed, resulting in job losses for 200 office and production workers. A plant in Santa Fe, N.M., that produces aftermarket diesel emissions-control systems will close, costing about 50 jobs.
The moves were explained by the OEM as a response to global market conditions, with mining and construction sectors offering significantly reduced demand.
Last fall Caterpillar implemented a wide-scale restructuring program it said would lower operating costs by about $1.5 billion. Since the late-September announcement Caterpillar has announced nine plant closings, and more may be expected.
The group reported 2015 fourth-quarter sales and revenues of $11.0 billion, down 29% from the $14.2 billion revenues recorded for Q4 2014. The full-year revenues were $47.011 billion, down from $55.184 billion revenues for 2014.
When it revised its 2015 sales earnings forecast last September, Caterpillar predicted it would hit $48 billion, or $1 billion lower than it previous outlook. The figures it reported were $989 million lower than that revision.
For 2016, it forecast sales and revenues to be about 5% lower than 2015. Caterpillar noted then that 2016 would be the first time in its 90-year history that sales and revenues will have decreased for four consecutive years.