More layoffs at Cat, but dividend remains the same

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Caterpillar Inc. said Wednesday that a new round of layoffs has started at its facilities around the world just before the holidays, the same day it also announced it is maintaining its cash dividend of 77 cents a share for its stockholders. 

The company said employees around the world started getting termination notices on Wednesday, but it declined to say how many or from what facilities the new layoffs would come.

Caterpillar said the layoffs were triggered by the expectation that sales and revenues will be lower in 2017 than they have been this year, the company’s fifth consecutive year of reduced sales and revenues, and the continuig need to reduce its cost structure. Earlier, the company said it expected revenues to be about the same as 2016.

“There is never a good time for announcements like this, but we recognize this is particularly difficult for employees and their families during the holidays,” the company said in a prepared statement. It added that it will try and place affected employees in other available jobs within the company and that displaced employees will receive severance packages and outplacement services to provide support during the transition.

Also on Wednesday, Caterpillar said its board of directors voted to maintain the quarterly cash dividend of 77 cents a share, payable Feb. 18 to shareholders of record at the close of business on Jan. 20.

"Our dividend has remained a high priority throughout this difficult economic cycle. We've been able to maintain our dividend because our balance sheet remains strong, we've taken the tough actions necessary to reduce our cost structure and have generated solid cash flow through the current downturn in our business," said Caterpillar Chairman and CEO Doug Oberhelman, who is retiring as CEO at the end of the year but will remain chairman through March, 2017.

Caterpillar has paid higher dividends to its shareholders for 23 consecutive years, and since 2007, the company's cash dividend has more than doubled. Caterpillar has paid a cash dividend every year since the company was formed and has paid a quarterly dividend since 1933.

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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).