Caterpillar closing Kilgore plant; 100 jobs to be affected
From Staff Reports
Oct. 29, 2013 at 11:11 a.m.
Caterpillar Inc., which last week reported disappointing third-quarter earnings, is shutting down its facility in Kilgore, it said Tuesday.
The Illinois-based heavy equipment manufacturer notified employees in Kilgore it would close the facility and move the work to other facilities. The move is part of an effort "to position this business to be more successful and competitive throughout the cycles in a rapidly changing mining industry."
Production of the dippers made in Kilgore will be moved to Cat facilities in Kansas and Wisconsin, a company spokeswoman said.
According to the Kilgore Economic Development Corp., Caterpillar employs about 185 people at the plant. Caterpillar said about 100 jobs would be impacted. Caterpillar will offer eligible full-time employees a severance package and transitional support, said Rachel Potts, a company spokeswoman.
"We recognize this will impact our workforce and their families, but after considering a number of options and alternatives, we have concluded we need to take this step to achieve a more sustainable, long-term cost structure," Potts said.
The moves comes nearly a week after Caterpillar said its <a href="http://www.news-journal.com/business/caterpillar-earnings-tumble-percent/article_12eec63f-8f6f-50c6-878b-727e0d1037a2.html" target="_blank">third-quarter earnings plunged 44 percent</a> and it cut its forecast, again. It said revenue will be almost $11 billion lower than last year, a decline of 17 percent. Most of the decline is in its mining gear business, where revenue is expected to fall 40 percent, and of which the Kilgore plant is a part.
Until this year, rising commodity prices had fueled a mining boom. But slower growth in China's economy hurt demand for mining gear there and Australia.
Here is the text of the release:
<em>Hello - In <a href="http://www.caterpillar.com/cda/files/4509584/7/3Q13%20Caterpillar%20Inc.%20Results.pdf" target="_blank">Caterpillar Inc.'s 3Q financial release</a> on October 23, 2013, it was stated that the company has taken many actions to align our costs with the environment we're in currently. Further, we reported that while we've done much already, we're not finished and expect to take deeper actions to improve our cost structure and balance sheet.</em>
<em>Today, the company notified employees in its Kilgore, Texas, plant that following an extensive strategic review of its mining operations in Kilgore, it will close the facility to position this business to be more successful and competitive throughout the cycles in a rapidly changing mining industry. Production of dippers made in Kilgore will shift to another Caterpillar facility in Wamego, Kansas, and ballast box production will shift to our South Milwaukee, Wisconsin facility by year end. The closure will impact approximately 100 people. Caterpillar will offer eligible full-time employees a severance package and transitional support.</em>
<em>We recognize this will impact our workforce and their families, but after considering a number of options and alternatives, we have concluded we need to take this step to achieve a more sustainable, long-term cost structure.</em>