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Caterpillar cuts ties with some contract workers

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[December 06, 2008]  NEW YORK (AP) -- Caterpillar Inc. has started cutting ties with some contract workers as the world's largest maker of construction and mining equipment tries to lower costs amid the global economic slowdown.

HardwareThe company said Friday it notified agencies that employ the workers in Peoria, Ill., where Caterpillar is based, and the surrounding area, but declined to specify how many workers would be affected.

Jim Dugan, a Caterpillar spokesman, said similar work force reductions already had been made in North Carolina and Europe. The Peoria workers, he said, perform tasks ranging from factory work to office duties.

The cuts are part of a cost-reduction plan that also includes limiting travel, external meetings and events.

In a statement, the company said "certain Caterpillar business units are taking steps to manage overall work force and production schedules to appropriate levels during this time."

Caterpillar declined to provide details about the reduction of its so-called flexible work force, which includes the contract workers, "because these individuals are employees of these agencies rather than Caterpillar."

In the Peoria area, Caterpillar's contract workers include employees of Volt Information Sciences Inc. and ATS Corp. Representatives of those companies did not immediately respond to phone messages seeking comment.


Caterpillar spokesman Dugan said the company also had a small number of voluntary layoffs in Britain and a "very limited" number of notifications among part-time employees in Britain and the United States.

Caterpillar employs about 112,000 people worldwide, excluding contract workers.

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In October, Caterpillar reported a 6 percent drop in third-quarter profit, saying higher steel and freight costs had offset record global sales. It forecast virtually flat sales for 2009, noting "recessionary conditions" in North America.

Caterpillar, known for its trademark yellow-and-black earth-moving machinery, has broad geographic reach and a range of products that tap into various global industries.

Shares of Caterpillar rose 74 cents, or nearly 2 percent, to close at $38.26 on Friday. The stock is down 55 percent since peaking at $85.96 in April.


On the Net:

Caterpillar Inc.: http://www.cat.com/cda/layout?m8703&x7

[Associated Press; By DANIEL LOVERING]

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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