Heavy equipment manufacturer Caterpillar Inc. said it is offering a voluntary retirement package to about 2,000 US production employees because of ''significant declines'' in demand for its bulldozers, excavators and other earth-moving equipment.
"We recognize these are extremely difficult and uncertain times for our employees. In offering this package, our intent is to provide eligible employees the opportunity to retire early as we expect significant declines in all geographic regions in most industries due to difficulties in the global economy," said Sid Banwart, Caterpillar vice president with responsibility for the Human Services Division.
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, Illinois-based company said in a statement.
The world's largest maker of bulldozers and excavators saw demand disappearing as dealers cancelled orders in the fourth quarter after nine months of record sales, with fourth-quarter net income falling almost a third to $661 million, from $975 million (See: US loses nearly 50,000 jobs in a single day).
Caterpillar has been slashing jobs at a pace not seen since the mid-1980s, when the US manufacturer was losing $1 million a day and fighting to keep its doors open. Last month the company reported a 32 per cent fall in fourth-quarter profit and said it expects sales to fall about 22 per cent this year to $40 billion as a global recession and credit crisis sap demand for construction. CEO 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 on 26 January included 12,000 employees, or 11 per cent 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.