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Archive for the ‘Layoffs’ tag

Mr. Hope, meet Mr. Yellow

I was at my real job when Obama came to Peoria and Caterpillar CEO Jim Owens managed to muck up a pretty good photo op by doing that thing they taught us to do in Peoria when asked a direct question: say what you think the truth is.

Something you develop in the news biz is a BS detector — mine was pegged the other day when Obama was allegedly going to say Owens promised to recall recently laid-off workers if the stimulus bill passed. It was all based on an unnamed “source” quoted in the Journal Star and carefully hedged to really mean “we’ll start rehiring if the version we want gets passed (though we know this will never happen by the time the Beltway Sausage Factory gets done with it).”

Mr. “Audacity of Hope” is not above exploiting fearful people’s hopes for better days to get legislation passed. Refreshing because it exposes him as politician vs. messiah. Mr. Yellow Father, however, has to answer to the people who have their personal fortunes (and $18 billion worth of stock) invested in his enterprise; he gains nothing by handing out false hopes.

I don’t really think Owens and Obama contradicted each other: Obama’s package should help companies like Caterpillar stop firing and start hiring. Owens just said it would be farther down the road than many had hoped, and that more jobs may be lost before things turn around and hiring resumes. If this surprises you, congrats on returning from your vacation on the Mars Riviera.

(I had to work late last night to get a story in the paper about a plane crash that killed 50 people … puts all this in perspective).

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Tom Mangan posted at 9:18 am February 13th, 2009 |

Peoria Journal Star: Caterpillar CEO will promise to rehire laid-off workers if stimulus passes

Paul Gordon of the Journal Star notched a scoop this morning: a source is saying Caterpillar CEO Jim Owens will promise at tomorrow’s Obama visit in East Peoria that recently laid-off workers could be rehired if a federal stimulus act passes.

Owens, who will fly into Peoria on Air Force One with the president on Thursday afternoon, will encourage passage of a “significant stimulus package” in the United States and will offer his and Caterpilar’s encouragement for other stimulus packages being considered around the world, said a source familiar with the plans for Obama’s visit to Peoria on Thursday.

Owens, the source said, in his discussions with Obama and his public comments during the visit, will “emphasize that these economic stimulus packages are a critical step toward global economic recovery.”

If the packages are adopted and enacted quickly, it would give Caterpillar the opportunity to begin recalling those employees who have already been laid off since early December and like stave off planned near-term layoffs.

Before we launch the chorus of glory hallelujahs, however, we must keep a couple things in mind:

  • Cat has not changed its mind about the plants in North Little Rock, Arkansas, and Sequin, Texas. Jobs eliminated because they’re moving to these locales will most likely stay gone.
  • The stimulus package could spike demand for construction and power equipment, but demand for mining machinery would be farther down the road. Cat people in construction and finance could benefit sooner.

I’m still in wait-and-see mode on what gets said at Thursday’s visit. Cat is letting people go because demand is way off and it’s pointless to build machinery and let it stack up in a lot somewhere. Many of the people laid off would get rehired when the economy turns around; the stimulus package simply hurries things up a bit (potentially).

Honest question: how reliable is Gordon’s source? Well, given Cat’s Fort Knox mentality about guarding company information (and carefully telling only what it wants known), it’s safe to assume this was an approved leak. I can’t imagine anybody talking to the press without authorization when the company’s looking for reasons to reduce expenses.

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Tom Mangan posted at 11:27 am February 11th, 2009 |

More Caterpillar layoffs in the wind?

Merle Widmer at Peoria Watch says he’s hearing that more people will get the heave-ho today; this gibes with some rumors I was told last week, namely that trimming the white-collar ranks would start in earnest this week.

Presumably these are among the non-production jobs mentioned in the most recent earnings report rather than evidence that things are getting even worse. Caterpillar expects this round of cuts to happen by the end of March.

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Tom Mangan posted at 7:35 am February 9th, 2009 |

Cascading effects of lost jobs from Peoria to Las Vegas

National Public Radio tracks the effects of the Mossville, Illinois, layoffs from the factory floor to suppliers to a local restaurant and finally all the way to Las Vegas, where a laid-off Peorian was planning to attend a billiards tournament but might not now, for obvious reasons.

Tammie Cox of nearby Peoria just lost two jobs, which she says earned her about $30,000 a year — neither of them at Caterpillar, but both of them indirectly dependent on the company.

At one job she tracked Caterpillar parts.

“I was employed just recently through DHL Global Forwarding, but because of Caterpillar, they had to lay off employees,” she says.

Cox also waited tables at a Mossville restaurant and bar that depended on Caterpillar workers — a place called Building G.

“The Caterpillar workers use to, if they wanted to go have a beer or a get-together with their friends, they would say that there was a meeting at Building G,” she says.

Cox says that after a promising start last summer, the restaurant found that Caterpillar workers were cutting back, and business at Building G slowed to a halt.

Seems Cox is an ace eight-ball player who was planning to compete in Vegas but might have to pass on it this year.

Audio of this piece will be available around 7 p.m. EST. This is the kind of piece that NPR excels at.

(Incidentally: this link was sent along by a Cat Stock Blog reader — I won’t name names, but I wanted to say thanks and encourage everybody to send your tips along.)

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Tom Mangan posted at 12:32 pm February 4th, 2009 |

Cummins plans job cuts as earnings dive

Cummins, a key Caterpillar competitor in diesel engines and power systems, reported today that its fourth quarter profit fell 55 percent and it plans to cut its workforce by 6 percent this quarter.

“We are in an extraordinarily challenging period,” Tim
Solso, chairman and chief executive, said in a statement.

Cummins reported a fourth-quarter profit of $89 million, or
45 cents a share, down from $198 million, or $1 a share, a year

Sales fell 6 percent to $3.29 billion.

Analysts on average expected a profit of 41 cents a share,
according to Reuters Estimates.

Layoffs should total about 800, the company said.

Cummins Engine earnings release here. From the release:

Cummins expects sales in 2009 to be approximately 20 percent lower than 2008, and to earn an EBIT margin of 6.5 percent of sales, excluding restructuring costs associated with the actions announced in the first quarter of 2009.

Sales are forecast to drop across all business segments, with the largest decline expected to come from the Components and Engine segments. All business segments, however, are expected to be profitable in 2009 and the Company will continue to aggressively reduce costs while investing in key growth opportunities.

Well, they’re keeping their chins up. Noteworthy tidbits from the release: sales to Chrysler for its pickup trucks are down 34 percent and sales to RV manufacturers are off 72 percent.

More on Cummins at Finviz.

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Tom Mangan posted at 7:03 am February 3rd, 2009 |

CNN: Pain in Peoria

For the peeps in P-town: CNN stops in and reports on how Peorians are coping with the Caterpillar layoffs.

While I’m on the subject, a Motley Fool contributor notes how companies conducting layoffs cut their own throats.

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Tom Mangan posted at 6:30 am February 2nd, 2009 |

More Caterpillar layoffs at three Illinois plants

Another 2,110 production workers will be out the door in East Peoria, Aurora and Decatur on April 13. These are on top of the job cuts announced Monday with the earnings report. The breakout, plus management and staff cuts included in Monday’s count:

  • Aurora: 500 production; 96 management, staff & support
  • Decatur: 1,026 production; 146 all the rest
  • East Peoria: 584 production, 174 all the rest

Cat builds wheel loaders and hydraulic excavators in Aurora; off-highway trucks, motor graders and wheel tractor scrapers in Decatur; and track-type tractors and pipelayers in East Peoria.

Sorry for not posting this sooner; I’m still catching up on the sleep I lost Monday to blog the earnings release (4 a.m. on the East Coast, and I work second shift).

UPDATE: A forum at says the third shift at the Mossville plant was told their layoff started immediately rather than at the end of February, the previous plan.

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Tom Mangan posted at 7:19 am January 30th, 2009 |

U.K. Caterpillar plant to suspend production for 12 weeks

Workers at Caterpillar’s articulated-truck plant in Peterlee, United Kingdom, approved a break in production:

The layoffs start next Monday when the factory will halt work on its line of articulated lorries for five weeks, with the staff to receive 75 per cent of their usual wages.

Union officials say a further break of six weeks with full pay and another week are also expected leading up to the end of May.

The decision was made after months of negotiations between unions and the company, which employs 700 people at its factory in Mill Hill, in the North West Industrial Estate.

Articulated trucks are basically two-piece machines with a big hinge connecting the tractor to the load carrier in the back. They work best over varied, uneven terrain.

They’re far smaller than the huge mining trucks Caterpillar builds in its Decatur, Illinois, plant, where I’ve been told demand for smaller trucks has also dried up.

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Tom Mangan posted at 10:33 am January 28th, 2009 |

Scratch 140 jobs from the Pontiac plant

Caterpillar is letting go of about 15 percent of the staff at its Pontiac, Illinois, factory, the Bloomington Pantagraph reports.

The layoffs, which will take effect Feb. 16, are the latest blow to the community of about 12,000 people. Since the start of 2008, the city has seen extensive flooding damage, battled the governor’s still-pending decision to close Pontiac Correctional Center — the city’s third largest employer — and learned of layoffs at Interlake Material Handling Inc.

At Caterpillar, the layoffs represent about 15 percent of the work force of more than 860 workers. The number doesn’t include an undetermined number of managers who may accept buyouts.

I once applied for a job at the Pontiac plant just before the economy cratered in about 1981 or so. Fate smiled on me, I figure.

As long as we’re on the subject, Cat won’t say how many of the 5,000 working in Decatur will be let go.

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Tom Mangan posted at 11:00 pm January 27th, 2009 |

Layoffs: negotiating a better severance deal

This article in Fortune questions the notion that you have no leverage in a layoff. It notes that under certain conditions, you might be able to finagle a better severance package.

For instance, let’s say your company’s rule of thumb is two weeks’ pay for each year of service. “That’s a commonly used formula left over from when people tended to stay with the same employer for many years,” Bayer notes. “But suppose you are a 50-year-old manager making $100,000 a year who was wooed away from a competitor and had to move across the country to take this job, and let’s say that was just two or three years ago. Is four or six weeks’ severance pay really fair?” In such a case, even the most hardnosed boss is likely to agree you should get more.

Another consideration: negotiating more favorable health coverage.

Sounds pretty Pollyanna-ish to a natural-born cynic like me. I mean, really, would any of this fly at a company like Caterpillar? Never know till you ask.

A more serious bit of advice to be culled from the article: find out your severance rights and do your utmost to get every penny you have coming to you. You might not get more but you should not settle for less.

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Tom Mangan posted at 9:51 am January 27th, 2009 |