The new layoffs came on top of 20,000 job cuts announced earlier this week, when the Peoria, Ill.-based company reported a 32 percent drop in fourth-quarter profit. Results fell as slumping commodity prices, tight credit markets and a decline in construction hurt orders for Caterpillar's backhoes, tractors and other machines.
"Over the last few months, recessionary conditions have had a very negative impact on our customers," Bob Williams, vice president for the Americas Operations Division at Caterpillar, said in statement. The company "must drastically reduce our production levels and cost structure to remain competitive for the long run."
When Wanda Smith clocked in at 7 a.m. Friday at Caterpillar's sprawling central Illinois factory she didn't have a clue she was about to be laid off with hundreds of other workers.
Only after she took her place along an engine assembly line did supervisors approach her to tell her and dozens of others to follow them.
"They separated us from other workers, handed us pink slips and escorted us out of the building like children," said Smith, 48, of nearby Canton, who worked at the plant for four years and made $17 an hour. "No explanation. No apology."
Caterpillar, with about 113,000 employees worldwide, has expanded dramatically in recent years, helped by surging demand from infrastructure-building in developing countries. Its total employment grew by 11,500 people in 2008.
The latest reductions include 500 production workers in Aurora, where Caterpillar makes wheel loaders and hydraulic excavators; 1,026 production workers in Decatur, where the company makes off-highway trucks, motor graders and wheel tractor scrapers, and 584 production workers in East Peoria, where Caterpillar makes track-type tractors and pipelayers.
Caterpillar said it notified employees Friday of the permanent layoffs scheduled to begin in April.
The company said it also notified 416 support and management employees at those locations of layoffs under a plan announced Monday, including 96 in Aurora, 146 in Decatur and 174 in East Peoria. That plan calls for shedding about 5,000 white-collar workers globally by the end of March.
Caterpillar said other business units were still determining how many layoffs would be needed to meet the staff reduction plan.
