Cat will close three northern Illinois plants, move 170 jobs to Michigan

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Caterpillar Inc. announced Friday it will close three northern Illinois factories that make couplings and move the 170 jobs to a facility in Menominee, Michigan.

The Anchor Coupling Inc. plants  ̶̶  two in Sterling and one in Dixon  ̶  will be shut down by the end of the first quarter next year, Caterpillar said in its announcement. Anchor Coupling is a wholly owned subsidiary of Caterpillar.

The employees, who were aware Caterpillar was studying the possibility of consolidating Anchor Coupling manufacturing and distribution operations in one facility, were informed of the decision on Friday, the company said. The Dixon plant and one of the Sterling plants were manufacturing facilities while the other Sterling plant was a distribution facility. The Anchor plant in Menominee does both product and distribution.

“Consolidating production and logistics to one location will enable us to better meet our customers' expectations by reducing costs, driving efficiency and utilizing existing assets,” the company said.

Anchor Coupling manufactures hydraulic hose assemblies for Cat machines as well as other original equipment manufacturers.

Caterpillar has been critical in the past of the Illinois business climate and its leadership has said the cost of doing business in this state could be a factor in future decisions.

Spokeswoman Rachel Potts acknowledged that was the case here, but said it was not the only or even the chief consideration. “Certainly in a decision like this business climate is always considered,” she said. “But the real driver of this decision was the cost structure.”

Caterpillar has owned the Dixon plant since the late 1960s and it opened the Sterling facilities in the mid-1990s. The Menominee plant, where Anchor Coupling is based, has been around since 1938, according to its website.

It said there are Anchor Coupling assembly plants in the United States, Belgium and the United Kingdom.

In the company’s announcement Greg Folley, Caterpillar vice president of the Remanufacturing, Components and Work Tools Division, said the company recognizes the difficulty the decision is for them.

“We value and appreciate the work that our Sterling and Dixon employees have contributed and their dedication to producing and distributing quality products. This decision is not about the performance of these plants, but rather about improving efficiency across the component manufacturing footprint and reducing the cost structure driven by three independent facilities, while providing the highest quality products to our customers,” Folley said.  

The plants in Sterling and Dixon will ramp down production beginning in the fourth quarter 2014 with the final transition to be completed in the first quarter 2015.

Employees who are displaced will be offered severance packages from the company and outplacement services from appropriate agencies to ensure they have the necessary support during this transition, the announcement said.

 

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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).