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Caterpillar layoffs: what I know

I get a ton of Google hits from folks desperate for information about when and where Caterpillar’s next paycheck punch is coming from. It’s heartbreaking to have to tell folks hey, I know what’s available already online, and it ain’t much.

Caterpillar’s earnings announcement did not say where the cuts would happen. It’s about 10 percent of the global workforce (not 20 as some said yesterday, because 8,000 were contractors who were not counted in the official total.)

Demand for Cat machines is down across the board. The most notable order backlog is in big mining trucks, but commodity prices aside from gold and coal are too cheap to encourage much exploration that inspires buying new equipment.

Here’s the full description of Caterpillar’s employee-related cost-reduction plans for 2009 (sorry for the repetition if you saw some of it yesterday.)

  • Voluntary and involuntary separations and layoffs of about 4,000 full-time production employees. Depending on business conditions more layoffs may be required as the year unfolds.
  • Sharp declines in overtime work. Factory overtime is a key element of volume flexibility and many facilities were working high levels of overtime through most of 2008.
  • Several facilities have shortened workweeks, and thousands of employees have been, or will be, affected by temporary layoffs and full and partial plant shutdowns.
  • Elimination of almost 8,000 temporary, contract and agency workers. While these workers are a key element of our “flexible workforce” they are not included among the 112,887 full-time employees at year end.
  • Voluntary separations of about 2,500 support and management employees.
  • Additional layoffs or separations of as many as 5,000 support and management employees.
  • Hiring freezes and suspension of salary increases for most support and management employees.
  • Significant reductions in total compensation for executives / senior managers.

Also, here’s a post on what to do about health benefits if you end up out of work. Also: Six things to do before you get laid off.

My hunch is Cat figures good times’ll return in 2010 and it doesn’t want to have to rehire all the people it recently fired. I would expect far more days-and-hours reductions and temporary plant closings than permanent pink slips.

If you know anything more about Cat layoffs, please share in the comments.

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Tom Mangan posted at 8:08 am January 27th, 2009 |

Caterpillar layoffs: what today’s earnings report tells us

Caterpillar Inc. reported this morning that it expects to have its workforce reduction — you know, firings and such — complete by the end of the first quarter of 2009. The total adds up to 20,000, but 8,000 of those are contract/agency employees who, as far as we know, have mostly been let go already.

Adding in 2,500 voluntary separations (buyouts, etc.) cuts the 20k figure in half, but the report clearly states that says 4,000 full-time production employees will have been let go by the end of March, as will 5,000 support and management employees. And any more the economy dictates.

Further good news: Overtime is being slashed and hours are being cut, so even those who keep their jobs may end up pinching pennies this year.

Sadly, the report does not say where the cuts will happen. I’ve heard of layoffs in Aurora, Illinois, and Lafayette, Indiana, in the past couple days.

If you’re hearing about any where you work, let us know in the comments.

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Tom Mangan posted at 6:31 am January 26th, 2009 |

Caterpillar doesn’t make Fortune’s Best 100 Companies to Work For

Here’s the list at CNN money. Of course being based in Peoria puts the company in 300th place to begin with (only native Peorians can dis our hometown in such fashion; it’s fightin’ words if anybody else tries it).

Lists such as this are of course barely worth the pixels they paint on your screen but they are always great generators of buzz/readership, which is why magazines like them and blogs can’t resist linking to them.

I couldn’t help noticing Cisco Systems, the network switch/router company, is No. 6. I live about two blocks from Cisco’s world HQ; if only I knew squat about making bits flow over the Internet. I could walk to work and everything.

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Tom Mangan posted at 8:51 am January 23rd, 2009 |

Pay cuts, freezes becoming widespread

Associated Press reports that the white-collar pay cuts Caterpillar announced in December are catching on. I’m sure you’ve heard by now that President Obama (I like saying that, sorry) has frozen pay for everyone earning over 100k at the White House. From Yahoo News:

A wide range of employers have followed suit. In some cases, they’re imposing pay freezes or cuts to avoid immediate layoffs, though economists say such steps tend to lead to layoffs anyway. In other cases, employers are cutting or freezing pay and laying off workers.

“It’s a real tectonic shift,” Terry Connelly, dean of Golden Gate University’s Ageno School of Business, said of pay freezes and cuts. Such steps, which once affected mainly union workers, are spreading to white-collar industries, he said.

“The extraordinary pace of layoffs has shifted people’s internal calculations to the point where they are not only willing to take a pay cut to save their own job but also take a freeze to save their co-worker’s,” Connelly said.

I suspect a lot of companies are finding that in their relentless quests for efficiency in the past 15 years, they cut all the fat during the fat years and now, when times are tough, they have a hard time finding any people they can spare without damaging the business.

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Tom Mangan posted at 7:28 am January 22nd, 2009 |

Caterpillar rated 16th best company to work for, which offers salaries and workplace reviews, conducted a survey that rated the best places to work. The top 20:

  1. General Mills
  2. Bain & Company
  3. Netflix
  4. Adobe
  5. Northwestern Mutual
  6. Whole Foods
  7. Google
  8. SAP
  9. Continental Airlines
  10. NetApp
  11. McKinsey & Company
  12. FactSet
  13. Boston Consulting
  14. Procter & Gamble
  15. Intuit
  16. Caterpillar
  17. Genentech
  18. CareerBuilder
  19. Apple
  20. Juniper Networks

Wow, above Apple. Can’t be long till we have a squashed-bug-yellow successor to the iPod.

The methodology of this “survey” is so unscientific that it’s value is purely for entertainment/bragging rights. But hey, we all eat ice cream cones despite their utter absence of redeeming nutritional value.

Glassdoor’s “how do you like your job” area is loads of fun. Wonderful (if predictable) contrast from Cat’s page.

“Caterpillar – Exporting Producs, Importing Revenue, a good place to call Home”
Senior Engineer in Peoria, IL (US)

“Don’t work here unless you want to be miserable in the middle of nowhere.”
Mechanical Engineer in Peoria, IL (US)

Hey, that’s my hometown you’re calling in the middle of nowhere, bucko. (Sez the guy living it up in sunny California 2000 miles away).

Glassdoor requires you to post a review to be able to read other people’s, an extra layer of effort that yields expressions of extreme contentment or bitterness, I suspect. Folks in the middle probably wouldn’t bother.

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Tom Mangan posted at 12:38 am December 31st, 2008 |

Cat to cut executive pay, offer buyouts

This should warm the hearts of UAW leaders everywhere: Caterpillar’s taking a whack at management pay this time, according to Dow Jones NewsWires:

Caterpillar Inc. (CAT) will slash executive compensation by as much as 50% next year, with lower cuts for other employees, as the manufacturing giant becomes the latest to cut salaries to cope with slumping demand.

In addition, most U.S.-based employees will be eligible for buyouts as Caterpillar announced a hiring freeze and continues to look for other cost-saving opportunities, including layoffs.

Oh, and there’s this:

The company has benefited from a five-year boom led by emerging markets in big need for the heavy construction equipment made by Caterpillar. During that time, the work force rose nearly 50% to 101,000 as revenue more than doubled.

Let’s hope most of those folks keep their jobs, but the fact a bust almost always over-corrects the excesses of the boom is worrisome.

A post at MarketWatch on the same news item has some interesting comments about what to do about excessive executive pay.

As long as we’re talking jobs, the New York Times reports that lots of companies are avoiding layoffs by cutting hours and other tactics that fall short of outright layoffs:

Some of these cooperative cost-cutting tactics are not entirely unique to this downturn. But the reasons behind the steps — and the rationale for the sharp growth in their popularity in just the last month — reflect the peculiarities of this recession, its sudden deepening and the changing dynamics of the global economy.

Companies taking nips and tucks to their work force say this economy plunged so quickly in October that they do not want to prune too much should it just as suddenly roar back. They also say they have been so careful about hiring and spending in recent years — particularly in the last 12 months when nearly everyone sensed the country was in a recession — that highly productive workers, not slackers, remain on the payroll.

The worry for most companies is what to do when the fat is gone and they have to start cutting into the muscle. Anybody who survived the bloodbath of the early ’80s remembers what that was like.

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Tom Mangan posted at 8:01 am December 22nd, 2008 |

Laid off? What to do about health coverage

Even if you’ve still got a job, this is good to know.

If you think you might be one of them, know this: You’re almost certain to lose your employer-sponsored benefits with your full-time job. That’s why you need an action plan, stat. Make sure you know your health-insurance rights and options, because once you get that pink slip you have no time to lose tells what to do from the first hour through the next two months. One key detail not to be overlooked when you’re getting your kiss-off exit interview:

Don’t leave without asking for a certificate of creditable coverage. This document includes the dates that your health insurance began and ended, and proves that you were covered during that time. You’ll need this to apply to other health-insurance plans.

After a week:

Plan to spend down your flexible spending account (FSA), if you have one, on new glasses, cold medicine, acupuncture—on whatever you can, so your former employer doesn’t get to keep your hard-earned savings.

If after the first month you haven’t found another job or joined your spouse’s plan:

Sign up for a COBRA extension. Under the Consolidated Omnibus Budget Reconciliation Act, you and your family have the right to extend your current health plan for up to 18 months after you are laid off.

Those are the high points; I recommend reading the whole thing.

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Tom Mangan posted at 12:06 pm December 19th, 2008 |

Cat moving 1,400 jobs to Texas from Illinois, South Carolina

UPDATE: Paul Gordon at the Journal Star reports on yesterday’s layoff news, etc.

The layoff is not connected with Caterpillar’s earlier announced decision to cease making on-highway truck engines, or to an announcement by the governor of Texas on Thursday that Caterpillar is going to build a small-engine plant in that state, transferring some work from Mossville, a Caterpillar spokesman said.

Naturally the UAW is skeptical, and as much as this “move 1,400 jobs somewhere else for fun and profit” vibe irks me, one thing must be said: The Texas project has been in the works for months and nobody imagined the economy would’ve turned this ugly by now. The coincidence makes Cat look like Scrooge painted yellow this morning, but hey, coincidences do happen.

(Some part of me pities the Texans who sold their souls and abandoned their pride to get this plant. Because Texans are such a prideful bunch.)

Last night’s post:

On the same day that 800-plus got pink-slip notices from the Mossville engine plant, word came out about a new engine plant Caterpillar is planning. It moves 1,400 jobs from Illinois and and South Carolina to a town east of San Antonio. From the Austin American-Statesman:

Caterpillar Inc., a heavy-equipment giant, is consolidating its assembly, paint and testing operations from Illinois and South Carolina to Seguin. On the economic development scorecard, the move counts as a win for Texas against Mexico and South Carolina, both of which were also competing for the facility.

“The location really just fits our long-term strategic plans,” said Kate Kenny, a spokeswoman for Caterpillar. “About 70 percent of the engines that will be manufactured there will be exported, and Seguin gives us great access to ports and interstates and other hubs.”

Seguin is on Interstate 10 and near Interstate 35, and it is about 30 miles northeast of San Antonio and about 50 miles south of Austin. The ports of Houston and Corpus Christi are about an equal distance away. And when construction of Texas 130 is completed, the city will mark one end of the highway.

The state’s offering is the biggest Texas Enterprise Fund investment this year. In previous years, the fund has granted $50 million to companies such as Texas Instruments. The Texas Enterprise Fund was created in 2003 at the urging of Gov. Rick Perry and was funded through the Texas Legislature in 2005 and 2007.

This item says it’ll generate $170 million in capital investment. Well, at least they’re not pouring it into credit default swaps. Next on my to-do list: see how many millions Texas will give me to move my blog headquarters to a flat above an ultra-hip Austin watering hole. I love that song about going home with the armadillo.

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Tom Mangan posted at 12:07 am December 19th, 2008 |

Over 800 to be laid off from Cat’s Mossville plant

Reuters reports:

Caterpillar Inc. said on Thursday it would lay off hundreds of workers at an engine factory early next year in response to what it called a significant drop in demand for the plant’s products.

The company said that it had notified 814 workers at its Mossville, Illinois engine assembly. The layoffs are to take effect February 23, 2009 and last “indefinitely.”

The plant makes diesel powerplants used in commercial trucks made by companies like Paccar Inc (PCAR.O: Quote, Profile, Research, Stock Buzz) and Navistar International Corp (NAV.N: Quote, Profile, Research, Stock Buzz) as well as some of Caterpillar’s own earth-m

Tough times indeed. On a personal note, my Uncle Harold worked as an engineer at Mossville for decades. The dad of my best friend in grade school was a plant superintendent there.

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Tom Mangan posted at 1:03 pm December 18th, 2008 |

Layoffs in the Research Triangle?

TV station in the Raleigh-Durham region of North Carolina reports:

Clayton, N.C. — Days after the Caterpillar plant in Johnston County announced plans to expand its facility and employ about 300 people, there is now talk of layoffs.

Although plant officials would not comment Thursday morning, Johnston County deputies on site said they were called to the plant to help with any problems that might arise because of “numerous layoffs.”

And here I thought the idea of building plants down South was to avoid labor difficulties that require calling the cops.

More from the Raleigh News & Observer

The plant, which employs about 800, was slated to be furloughed for 10 days as part of a broader effort to reduce production and costs at the company, which makes earth-moving equipment.

Caterpillar also is cutting contract workers at many of its facilities, including the Clayton plant.

I know, Cat just wants them to spend more time with their families at the holidays.

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Tom Mangan posted at 11:45 am December 18th, 2008 |