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Cat ends production of vocational trucks

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Caterpillar Inc. said Friday it will end production of on-highway vocational trucks, a move that will affect 30 jobs in central Illinois and 70 altogether.

The trucks, which include dump trucks, are currently made by Navistar i Escobedo, Mexico, but Caterpillar had announced earlier it would transfer that work to its facilities in Victoria, Texas, near San Antonio.

The company said the existing business climate in the truck industry was such that, after a thorough evaluation of the business, it decided to withdraw from this market. "This is also in line with the company's ongoing restructuring to align its businesses with existing conditions. As a result of this action, the company will cease taking new orders for vocational trucks, although Caterpillar remains committed to existing truck customers and will support the existing trucks currently on the road," the company said.

Caterpillar produced its first vocational truck in North America in 2011, working with Navistar on the products' design and build. Last year, the company announced its intention to begin independently designing and manufacturing its vocational truck products at the Caterpillar plant in Victoria, Texas.

"Remaining a viable competitor in this market would require significant additional investment to develop and launch a complete portfolio of trucks, and upon an updated review, we determined there was not a sufficient market opportunity to justify the investment," said Ramin Younessi, vice president of Caterpillar's Industrial Power Systems Division. "We have not yet started truck production in Victoria, and this decision allows us to exit this business before the transition occurs."

Job reductions will begin in March and will take place over a period of time, the company said.

Caterpillar stock value rose 40 cents affter the news on Friday, closing trading on the New York Stock Exchange at $66.87 a share.

About the Author
Paul Gordon is the editor of The Peorian after spending 29 years of indentured servitude at the Peoria Journal Star. He’s an award-winning writer, raconteur and song-and-dance man. He also went to a high school whose team name is the Alices (that’s Vincennes Lincoln High School in Indiana; you can look it up).