DECATUR — Now it’s the turn of a new group of Caterpillar Inc. employees to worry about the future:.
The company said it’s been sending out letters this week to some white-collar workers, warning them their jobs are due to be cut.
The letters have been showing up at the vast mining truck plant in Decatur, along with company factories across the nation. Caterpillar would not talk specific numbers for Decatur or anywhere else but described the affected workers as being in “support and management” positions.
The latest employment bad news rides in on the heels of 800 recent production-related job cuts that have already hit the Decatur plant. And Caterpillar has talked of further possible companywide blue-collar job losses as it struggles to control costs while awaiting better times.
Decatur, already hit this week with the news that Archer Daniels Midland Co. is moving its global headquarters elsewhere, is struggling with an unemployment rate of 12 percent, the highest in Illinois.
Caterpillar, dragged down by plunging sales as miners retrench in the wake of an industrywide slump, saw its second-quarter earnings collapse by 43 percent and has cut its revenue and profit outlook for the year.
Jim Dugan, a company spokesman, said the support and management cutbacks were part of an organizational streamlining and did not necessarily mean those targeted in Decatur would end up terminated. He said workers would have the opportunity to apply for vacant jobs in Decatur or elsewhere among Caterpillar’s production facilities.
“If they are not able to find another position, then they may end up leaving the company,” Dugan added.
He would not comment on the prospects the workers were facing, but it appeared clear many of those getting letters this week had a slim chance of landing another Caterpillar job in the teeth of such a sharp turndown in the firm’s order books.
“It’s important for us to say this, because it’s true, that we certainly understand that this is difficult for the employees and their families,” Dugan said. “And we’re doing what we can to try to provide support for those impacted employees during this time.”
News of more job cuts followed Caterpillar’s release of global dealer sales statistics that showed an accelerating downturn. Worldwide sales of the machines that include the mining trucks and other equipment built in Decatur were down 10 percent in August compared to the same time last year. That follows on from a 9 percent decline in July and an 8 percent drop in June.
The Latin America region, which had been a consistent bright spot, was off 3 percent, and the Asia-Pacific region continued its plunge with a 30 percent drop. North America bucked the trend with a 1 percent sales uptick, but overall, Caterpillar has seen worldwide sales pass through their ninth straight month of declines.
Jim Minton, an investment adviser with Decatur-based Investment Planners who studies Caterpillar, said it’s hard to find a light at the end of the tunnel, but there could be one. He points to the $85 billion-a-month cash injections by the Federal Reserve in the American economy, which he said will serve to lower the value of the dollar.
“When Caterpillar does well is in a timeframe when the dollar is falling and commodities are booming,” Minton said. “And those two things can kind of go hand-in-hand.”
He said a falling dollar also makes many people turn to gold to park their money, possibly setting the stage for a boost to gold miners, a big Caterpillar customer. “It could possibly be a trigger for Caterpillar,” Minton added.
For the moment, however, Caterpillar is pinning its faith in another area of government: the Washington, D.C.-based U.S. Export-Import Bank. Caterpillar is urging the bank to approve a $650 million long-term loan that would finance an Australian iron ore mine’s purchase of vast quantities of Caterpillar equipment, including many of the mining trucks built in Decatur.
“Caterpillar believes this particular transaction will have a positive net impact on jobs …” said a statement from the Washington, D.C. office of Caterpillar, Inc.