Caterpillar to shift work from Texas to South Milwaukee

Caterpillar Inc. has announced it will close its Kilgore, Texas, plant and move some of the work to South Milwaukee by the end of the year.

The Kilgore plant, where 100 employees will be laid off, makes dippers and ballast boxes for electric rope shovels used in surface mining, said Rachel Potts, a company spokeswoman. The dipper production will be shifted to a Caterpillar facility in Wamego, Kan. The ballast boxes will now be manufactured at the South Milwaukee Caterpillar plant.

In the sputtering mining industry, demand is low and the company must align production with demand, Potts said.

Ballast box production is expected to shift to the South Milwaukee facility before the end of the year. The company has not yet determined whether more workers will be hired to complete the additional work there.

“There’s no prediction on what it may or may not mean for the South Milwaukee workforce,” she said. “We’ll definitely evaluate it, and we’ll evaluate the demand for that particular product and adjust manpower as needed for that additional production that’s coming into the facility.”

The Peoria, Ill.-based company announced last week that revenues from its mining equipment manufacturing business, which is based in Oak Creek and operates a plant in South Milwaukee, will fall by 40 percent this year.

Expected sales and revenues for 2013 are $11 billion lower than last year. Caterpillar’s Resource Industries segment, which is principally mining, makes up about 75 percent of that drop.

Caterpillar has been shutting factories and has reduced its workforce by more than 13,000 people since the third quarter of 2012. The company also indicated in its earnings report that the workforce reductions are not finished.

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