The media is abuzz as Caterpillar Inc. announced Thursday the closing of five factories to cut capacity in response to slowing demand for construction and mining equipment.
The designated plants that are being closed are in plants in North Carolina, South Carolina, Mississippi and Florida.
The cutbacks are part of CAT's strategy outlined in September to reduce its workforce by ~10K positions and close or consolidate ~20 facilities through 2018; CAT says it has cut ~5,300 positions so far. These decisions enable the company to be more efficient and better utilize its manufacturing assets. Production of buckets and other work tool attachments for the medium wheel loader product line in that facility will move to existing suppliers. A plant in Morganton, N.C., that makes engines and other components is expected to end production next year, affecting about 110 jobs. The closure will impact about 240 positions.
The Associated Press also states that Caterpillar will be demolishing a mostly-vacant engine manufacturing building in Mossville, Illinois, "to save money".
The Mississippi plant was rebuilt after a 2008 tornado damaged it. At the time, Oxford was the only Caterpillar plant stamping out the steel cylinders that channel hydraulic fluid through most of its machinery, causing the company to scramble to prevent disruptions worldwide.
The final transition is expected to be completed within the next 12 to 18 months.
Ridgeway, South Carolina - a 75-employee generator assembly panel plant in Ridgeway, South Carolina, will shift work to company plants in Seguin, Texas; Lafayette, Indiana; and Griffin, Georgia.
"Caterpillar recognizes these restructuring actions are painful for its dedicated workforce, their families and the impacted communities", the company said in a memo shared with employees. Including's announcements, the company has announced the closure or consolidation of about 20 facilities, which represents about 7 percent reduction of square footage.
Caterpillar will put the Oxford building up for sale while officials with the Oxford-Lafayette County Economic Development Foundation seek a new tenant.
He says they have already begun planning.