Declining demand leads to more Caterpillar layoffs

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Peoria, Ill-based Caterpillar Inc. announced Friday it will lay off more than 460 supplemental employees from its plant in Decatur, Ill.

“Products built in Decatur are used in the mining industry, which is weaker than last year at this time,” said Rachel Potts, a company media relations representative. “While some cost reduction measures such as temporary layoffs, shutdowns and shortened workweeks have already been implemented, more permanent measures must be taken in the near-term.”

The layoffs will take effect in 60 days, in cooperation with the Worker Adjustment and Retraining Notification Act.

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“We know this is difficult for our employees and their families, but we are taking steps to position the company for long-term success,” Potts said.

The decision was made to bring production in line with demand, according to Caterpillar.

On March 28, the company announced it will lay off 250 to 300 employees in South Milwaukee by June for the same reason. It expects those layoffs to be temporary.

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But United Steelworkers Local 1343, which represents 803 workers at the South Milwaukee plant, said the timing of the layoff announcement was suspicious.

Last Tuesday, Caterpillar began its first labor negotiations with USW since the South Milwaukee facility became part of the company after the Bucyrus International Inc. acquisition.

The company said there is nothing significant to report on the negotiations so far. It has set up a website to keep the community informed about the negotiations at

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“I assure you that we will bargain with the union in good faith and hope to reach an agreement that is fair to all our employees and allows us to make the business decisions necessary to compete on a global scale,” says a letter on the site from Vince Clark, South Milwaukee factory manager.

Ross Winklbauer, United Steelworkers union sub-district director for District 4, said he hadn’t heard about the Illinois layoffs. It’s too early to tell how negotiations will go in South Milwaukee, he said.

“We did exchange proposals and it’s been cordial so far,” Winklbauer said.

Caterpillar plans to release its first quarter financial results on Monday, April 22.

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