By Dow Jones Business News, October 29, 2013, 05:36:00 PM EDT
By Bob Tita
Caterpillar Inc. ( CAT ) said it will to close its Kilgore, Texas, assembly plant in response to falling demand for
mining machinery and relocate Kilgore's production work to plants in Kansas and Wisconsin.
About 100 workers are expected to lose their jobs in the shutdown, which is scheduled for completion by year-end. The
Kilgore plant makes dippers and ballast boxes used in giant electric-powered mining shovels. Ballast-boxes production
will shift to Caterpillar's plant in South Milwaukee, Wis., while dippers will be moved to a plant in Wamego, Kan.
The Peoria, Ill., company said the decision to close Kilgore was made "to align our costs with the environment we're
"We recognize this will impact our work force and their families, but after considering a number of options and
alternatives, we have concluded we need to take this step to achieve a more sustainable, long-term cost structure," a
Caterpillar spokeswoman said in a written statement Tuesday.
Caterpillar last week reported that third-quarter sales of its mining equipment fell 42% from a year ago to $3
billion. Income from mining machinery plunged 63% to $409 million. Lower prices for mined commodities, such as iron ore
and coal, have triggered widespread spending cuts on new equipment. Mine expansion projects also have been shelved
throughout the world.
Chairman and Chief Executive Doug Oberhelman vowed last week that the company would be on a "cost-lockdown binge," to
counter falling demand for mining and construction equipment. Caterpillar has been using temporary layoffs for
management and hourly employees since the summer. The company revealed last week it also was considering closing some
smaller plants, cutting more jobs and consolidating management functions.
The company already has closed or announced plans to shutter small plants near Toronto and in Summerville, S.C.;
Owatonna, Minn.; Tazewell, Va.; and Sudbury, Canada.
Caterpillar acquired the Kilgore plant as part of its $8.8-billion purchase of mining-equipment maker Bucyrus
International Inc. in 2011.
Caterpillar's stock Tuesday closed down 0.25% at $84.07 a share.
--James R. Hagerty contributed to this article.
Write to Bob Tita at firstname.lastname@example.org
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