Peoria, Ill.-based Caterpillar Inc. plans to move engineering jobs from its South Milwaukee operations to Arizona as part of the creation of a central hub for its surface mining and technology offices.
The company will be moving employees from a variety of locations including, but not limited to, Peoria and Decatur, Illinois and South Milwaukee, spokeswoman Lisa Miller said in an email.
Arizona Gov. Doug Ducey said the move would create more than 600 new jobs in Tucson over the next five years, including positions in executive management, engineering, product development and support positions.
Miller said the company is not offering a specific breakdown at this time, but added that the new Arizona facility would not impact South Milwaukee manufacturing operations and that employees supporting those operations would remain.
United Steel Workers Local 1343 president Brad Dorff said the decision focuses on engineering jobs and shouldn’t impact the union workforce at Caterpillar’s South Milwaukee facility.
South Milwaukee mayor Erik Brooks said on his blog that the company told him 10 to 15 employees from South Milwaukee would move this year and about 200 jobs could move to Arizona over the next five to seven years with the bulk of them coming in 2018. The company has about 900 employees in South Milwaukee, Miller said.
She acknowledged the company had spoken with the mayor about the announcement but declined to comment on the specifics of the discussion.
She did say the company’s comprehensive review of its mining operations did include the possibility of locating in Wisconsin and other locations besides Tucson. Brooks told BizTimes he was also told the Milwaukee area was included in the review but, “I got the sense there wasn’t much that could be done.”
“In the end, Tucson proved the best option as it provides the best opportunity to deepen collaboration across the entire engineering value chain,” Miller wrote in an email.
Tom Bluth, Caterpillar vice president with responsibility for Surface Mining and Technology, also stressed collaboration in a statement included with Ducey’s announcement of the decision.
“This decision positions us to build on the tremendous capabilities present at our Tucson Proving Grounds and Tinaja Demonstration Center and deliver the next generation of mining technology and leadership,” Bluth said.
The company announced last week it would be closing five facilities and reducing its workforce by 820 positions. Those closures came in Florida, North Carolina, South Carolina and Mississippi. Work was shifted to facilities in Texas, Indiana, Georgia and Michigan along with existing suppliers.
Caterpillar has closed about 20 facilities and eliminated 5,300 positions since September 2015. The company’s restructuring plans include a total possible workforce reduction of more than 10,000 people through 2018.
The company’s cost reduction moves included closing its Oak Creek mining division corporate office and moving those operations to South Milwaukee. Brooks said some of those jobs may now be destined for Arizona.
“It’s disappointing for sure, but not surprising,” Brooks said, adding that the economics of mining can’t be controlled.
He noted the company’s decision shows the importance of plans the city has been working on that plan for Caterpillar to have a smaller footprint in the city.
