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Cat puts silver lining in latest announcement

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Caterpillar Inc. says there is a silver lining in its announcement made late Thursday about more job losses, including the likelihood that Building HH in East Peoria will be closed.

The announcement brings to just over 2,000 the number of jobs to be cut, the company said.

That silver lining, however, is that nearly all of the restructuring to be done in the Peoria region is completed, said Henry Vicary, Caterpillar’s director of community relations. That means the number of jobs eliminated in this region will not be nearly as large as many have anticipated, he said.

While any job cuts are tough to accept, the fact the local restructuring is "90 percent completed, and that’s comforting because a lot of people thought it would be worse,” Vicary said in an interview Friday.

Caterpillar announced Sept. 24 that it would go through a restructuring that would eliminate up to 10,000 more jobs – on top of the 31,000 jobs eliminated the previous three years – and would also consolidate some operations and plants.

That day the company also renewed its commitment to Peoria, even though it said construction of its new headquarters campus in downtown would be delayed.

Since then 1,200 salaried and management personnel in Peoria accepted early retirement offers and the company then eliminated another 260 of those types of jobs while ending another 340 agency positions.

On Thursday, Caterpillar announced it will close its undercarriage components facility in Danville, Kentucky, and shift production to various Caterpillar locations and strategic suppliers. That will affect about 75 jobs, 25 of which will be moved to East Peoria. Components that are now made in Danville go into track-type tractors used in construction and mining.

The company also said Thursday it is contemplating moving some production out of East Peoria and eliminate about 230 jobs, both office and production positions. Those jobs are in the manufacturing of components for mining and construction equipment.

The company is considering moving that production to a combination of suppliers and other Cat facilities. If the company decides to go forward with that – with the decision likely early next year – it would begin in early 2016 and would be complete in late 2018.

If this happens, Caterpillar expects to consolidate various production in East Peoria and close Building HH.

Also announced Thursday is the consolidation of its production at Caterpillar Japan Ltd. Component product development and production now done in its Sagami facility - hydraulic, drivetrain and undercarriage components - will move to Caterpillar's plant in Akashi in addition to other Caterpillar facilities, with some going to outside suppliers. CJL will also move a number of office positions from its Yoga and Sagami offices to the Akashi plant. About 690 employees are expected to be affected, 240 of which will relocate to other locations, including Akashi.

“Caterpillar recognizes these restructuring actions are tough and impact its talented and dedicated workforce. While difficult, the company must continue with these efforts given the market conditions and the need to reduce costs,” the company said.

Vicary said Caterpillar is making these moves “from a position of strength.” While the company’s revenues are down since 2012, Caterpillar is still making quarterly profits and remains number one in the world in the manufacture of earth moving and mining equipment. “It is far better to make these moves from a position of strength than from one of weakness,” he said.

The voluntary retirement program, Vicary said, allowed enough people to retire early that it eased the burden on the company enough that it didn’t have to eliminate as many jobs in the Peoria area. “It’s never easy, whether it’s 260 or one, but it’s a lot better than a thousand. And we were able to do that and will be there to support to the extent we can our great employees who we’ve had to separate,” he said, noting the programs made available to them to help them find new jobs.

“We’re leading with our values and we did everything we could to soften the blow in the Peoria area. We’re vastly on the road to being done in Peoria,” he said.   

Vicary said it was understandable that many business people in the area were concerned how the restructuring would affect the region. But he said the company is in the position to recover quickly when the markets it serves rebound. “That’s further good news for Peoria because as Caterpillar grows, obviously the community grows with it. And that protects the next generation of employees,” he said.

The commitment to the community “is unwavering,” he added. “We hope to be here another 90 years.” However, construction of the new headquarters still is being delayed until recovery starts.

 

Caterpillar Inc. says there is a silver lining in its announcement made late Thursday about more job losses, including the likelihood that Building HH in East Peoria will be closed.

The announcement brings to just over 2,000 the number of jobs to be cut, the company said.

That silver lining, however, is that nearly all of the restructuring to be done in the Peoria region is completed, said Henry Vicary, Caterpillar’s director of community relations. That means the number of jobs eliminated in this region will not be nearly as large as many have anticipated, he said.

While any job cuts are tough to accept, the fact the local restructuring is nearly completed “and that’s comforting because a lot of people thought it would be worse,” Vicary said in an interview Friday.

Caterpillar announced Sept. 24 that it would go through a restructuring that would eliminate up to 10,000 more jobs – on top of the 31,000 jobs eliminated the previous three years – and would also consolidate some operations and plants.

That day the company also renewed its commitment to Peoria, even though it said construction of its new headquarters campus in downtown would be delayed.

Since then 1,200 salaried and management personnel in Peoria accepted early retirement offers and the company then eliminated another 260 of those types of jobs while ending another 340 agency positions.

On Thursday, Caterpillar announced it will close its undercarriage components facility in Danville, Kentucky, and shift production to various Caterpillar locations and strategic suppliers. That will affect about 75 jobs, 25 of which will be moved to East Peoria. Components that are now made in Danville go into track-type tractors used in construction and mining.

The company also said Thursday it is contemplating moving some production out of East Peoria and eliminate about 230 jobs, both office and production positions. Those jobs are in the manufacturing of components for mining and construction equipment.

The company is considering moving that production to a combination of suppliers and other Cat facilities. If the company decides to go forward with that – with the decision likely early next year – it would begin in early 2016 and would be complete in late 2018.

If this happens, Caterpillar expects to consolidate various production in East Peoria and close Building HH.

Also announced Thursday is the consolidation of its production at Caterpillar Japan Ltd. Component product development and production now done in its Sagami facility - hydraulic, drivetrain and undercarriage components - will move to Caterpillar's plant in Akashi in addition to other Caterpillar facilities, with some going to outside suppliers. CJL will also move a number of office positions from its Yoga and Sagami offices to the Akashi plant. About 690 employees are expected to be affected, 240 of which will relocate to other locations, including Akashi.

“Caterpillar recognizes these restructuring actions are tough and impact its talented and dedicated workforce. While difficult, the company must continue with these efforts given the market conditions and the need to reduce costs,” the company said.

Vicary said Caterpillar is making these moves “from a position of strength.” While the company’s revenues are down since 2012, Caterpillar is still making quarterly profits and remains number one in the world in the manufacture of earth moving and mining equipment. “It is far better to make these moves from a position of strength than from one of weakness,” he said.

The voluntary retirement program, Vicary said, allowed enough people to retire early that it eased the burden on the company enough that it didn’t have to eliminate as many jobs in the Peoria area. “It’s never easy, whether it’s 260 or one, but it’s a lot better than a thousand. And we were able to do that and will be there to support to the extent we can our great employees who we’ve had to separate,” he said, noting the programs made available to them to help them find new jobs.

“We’re leading with our values and we did everything we could to soften the blow in the Peoria area. We’re vastly on the road to being done in Peoria,” he said.  

Vicary said it was understandable that many business people in the area were concerned how the restructuring would affect the region. But he said the company is in the position to recover quickly when the markets it serves rebound. “That’s further good news for Peoria because as Caterpillar grows, obviously the community grows with it. And that protects the next generation of employees,” he said.

The commitment to the community “is unwavering,” he added. “We hope to be here another 90 years.” However, construction of the new headquarters still is being delayed until recovery starts.

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).