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Caterpillar Announces Additional Layoffs for Employees at Three Illinois Facilities


PEORIA, IL - To bring production levels in line with current demand, Caterpillar Inc. (NYSE: CAT) today notified full-time production employees at its Aurora, Decatur and East Peoria, Illinois, manufacturing facilities of permanent layoffs. A total of 2,110 production employees will be laid off at the three facilities as a result of this decision. The layoffs for production employees announced today are in addition to a wide range of other workforce and cost-reduction actions that were outlined by Caterpillar on Monday, January 26, 2009.

In Aurora, where Caterpillar manufactures wheel loaders and hydraulic excavators, 500 production employees will be laid off. In Decatur, where the company manufactures off-highway trucks, motor graders and wheel tractor scrapers, 1,026 production employees will be laid off. In East Peoria, where Caterpillar manufactures track-type tractors and pipelayers, 584 production employees will be laid off.

In addition to the production employees, a total of 416 support and management employees in Aurora, Decatur and East Peoria have also been notified of layoffs today. This includes 96 support and management staff in Aurora, 146 in Decatur and 174 in East Peoria. These 416 support and management staff make up a portion of the as many as 5,000 layoffs and separations announced by Caterpillar on January 26, 2009. Other Caterpillar business units are currently determining the level of layoffs and separations needed to reach the previously announced plan to reduce the company’s support and management workforce.

These actions are in response to lower demand for products made at the Illinois facilities. As previously announced, Caterpillar is rapidly executing strategic “trough” plans and implementing actions throughout the company to deal with a very challenging global business environment. Depending on business conditions, more layoffs and separations may be required as the year unfolds.

“It is never easy to take steps that impact the lives of our employees and their families,” said Bob Williams, Caterpillar vice president for the Americas Operations Division that includes the facilities in Aurora, Decatur and East Peoria. “But over the last few months, recessionary conditions have had a very negative impact on our customers and we must drastically reduce our production levels and cost structure in order to remain competitive for the long run.”

Employees impacted by this decision were notified today by Caterpillar that the layoffs would begin on April 13, 2009. In addition, various government agencies and other officials were notified of this decision under the United States Department of Labor’s Worker Adjustment and Retraining Notification Act (WARN) and the Illinois Worker Adjustment and Retraining Notification Act (“IL WARN”).

In addition to reducing its global employment, Caterpillar has previously announced other actions in response to current conditions. These include:

* Hiring freezes and suspension of salary increases for most support and management employees.
* Significant reductions in total compensation for executives/senior managers.
* Significant reduction in capital expenditures.
* Sharp declines in overtime work.
* Several facilities have shortened workweeks. Others will or have implemented full and partial plant shutdowns.


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