Caterpillar Offers Retirement to 2,000 Employees
Bloomberg — Caterpillar Inc. said it is offering a voluntary retirement package to about 2,000 U.S. production employees because of “significant declines” in demand for its bulldozers, excavators and other earth-moving equipment.
The plan announced today is in addition to more than 22,100 workers and contractors Caterpillar already said it is laying off or dismissing, and more job cuts may be required, the Peoria, Illnois-based company said in a statement.
Caterpillar, the world’s biggest maker of bulldozers and excavators, last month said it expects sales to fall about 22 percent this year to $40 billion as a global recession and credit crisis sap demand for construction. Chief Executive Officer Jim Owens has said the company may post a loss this quarter, its first in 16 years.
“Depending on business conditions, more voluntary and involuntary workforce reductions may be required as the year unfolds,” the company said in the statement.
The package is being offered to about 2,000 production employees in the Illinois cities of Aurora, Decatur, Joliet and Pontiac, and in the Peoria area. Some workers also will receive the offer in Denver; Memphis, Tennessee; and York, Pennsylvania.
Job cuts that Caterpillar announced Jan. 26 included 12,000 employees, or 11 percent of the workforce, and 8,000 contractors. Four days later it said it would place another 2,100 factory workers in Illinois on “permanent layoff,” meaning they would be out of work at least six months. Caterpillar had 112,887 employees at the end of 2008.
U.S. Job Losses
The U.S. economy has lost 3.5 million jobs since the beginning of the recession in December 2007. President Barack Obama has pledged to save or create as many as 4 million jobs over two years through stimulus and other economic measures.
The U.S. jobless rate rose to 7.6 percent last month from 7.2 percent in December, the Labor Department said this month. Payrolls fell by 598,000, the biggest monthly decline since December 1974. Losses spanned almost all industries, from construction and manufacturing to retailing, trucking, media and finance.
Caterpillar didn’t give an estimated cost of the latest program. It said workers would be eligible based on age and years of employment. Its shares rose 53 cents to $31.45 at 10:59 a.m. in New York Stock Exchange Composite trading. The shares have declined 55 percent in the last 12 months.