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 J-TEC Chief Executive Officer Gary Roling said Peoria,
Illinois-based Caterpillar, his single largest customer, had
recently pushed back a big order due this month to December.
"We’ve been selling to Caterpillar for a long, long time, and this
year will likely be the lowest year for sales we’ve ever had," said
Roling, whose company makes tools to measure the flow of fuel,
exhaust and other gases.
Combined with declining orders for a defense-related project, total
sales are down 75 percent at J-TEC. The Cedar Rapids, Iowa,
company's workforce has fallen to 10 from 25 and is on a four-day
week.
J-TEC is seeking new business in other sectors to boost sales.
"Our hope is that things will start to get better in the first half
of 2016," Roling said. "But we have no visibility, and based on
(Caterpillar's) news, a recovery could be some way off."
J-TEC is not alone. The problems at Caterpillar have rippled through
its supplier base and will probably worsen. On Thursday, the
equipment maker forecast sales declines for 2015 and 2016 and
announced plans to cut up to 10,000 jobs.
At Elk Grove Village, Illinois-based Acme Industries, which makes
transmission parts for Caterpillar and rival Komatsu Ltd <6301.T>,
the sales drop has come at a time when its customers in the oil
industry are also suffering.
Just last summer, the company was on a hiring spree and
manufacturing around the clock. But owner Warren Young said it had
cut staff to 200 from 240 as sales to Caterpillar and Komatsu have
fallen 50 percent, dragging Acme's total down 10 percent to 20
percent.
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"When a downturn hits a couple of your businesses at the same time,
it leaves you fewer places to hide," Young said.
Like J-TEC, Acme executives are "out pounding the streets" for new
business.
Other, larger Caterpillar suppliers like Tenneco Inc <TEN.N> and
Dana Corp <DAN.N> did not return calls seeking comment.
But Mike Schroeder, joint owner of DuPage Precision Products of
Aurora, Illinois, summed up the situation for the diesel engine
component maker, which supplies Caterpillar's mining and
construction business.
"Obviously this affects us, our business and our workers," he said,
declining to provide details. "Like everybody else, we have to make
adjustments."
(Reporting by Nick Carey; Editing by Lisa Von Ahn)
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