timberland shoes for kids A possible consolidation by Caterpillar may benefit Winston
Caterpillar confirmed Saturday that one of its subsidiaries, Progress Rail Services Co., may close its engine manufacturing plant in LaGrange, Ill., potentially affecting more than 600 jobs. subsidiaries, with the Winston Salem plant specifically mentioned.
Progress Rail’s local railroad equipment production plant, at 2950 Temple School Road, had 160 employees at last count.
The subsidiary also said it could shift certain engine and locomotive components to outside suppliers.
“Progress Rail routinely reviews its strategic footprint and, as a result, is evaluating how to use its existing manufacturing space as efficiently as possible to remain a competitive supplier to the rail industry,” Caterpillar said. and worldwide.
Part of the restructuring was Caterpillar switching the use of its $426 million Winston Salem plant from axle manufacturing for mining trucks to its railroad business unit.
The 850,000 square foot plant, when operating as an axle manufacturing operation, had a peak workforce of 438. The company had pledged to create 510 full and part time jobs.
In August 2016, the company renegotiated its incentive packages with Winston Salem and Forsyth County, who approved keeping it eligible for the incentives with as few as 200 jobs in exchange for pledging to keep the plant open an additional five years.
Caterpillar disclosed, and local elected officials accepted that the company’s local workforce could drop below 200 temporarily. The workforce slipped to 140 in January 2017 before rising by 20 jobs over the past year.
The amended incentive agreements make it less likely that Caterpillar’s local workforce will drop low enough below 100 to invoke a “clawback provision” on the more than $8.7 million in local incentives it had received as of August 2016.
The company did not provide a deadline for when it might possibly make a decision about the future of the plant in LaGrange. It said there are an additional 600 jobs in administration, engineering and support operations that would not be affected.
Caterpillar declined to say how many jobs the local plant might gain from the potential consolidation.
The axle production was shifted in 2017 to operations in Decatur, Ill., where most of the production was done before the Winston Salem plant opened in 2011 to resolve a year’s backlog.
The disclosure comes two days after Caterpillar reported that fourth quarter sales increased 34.4 percent to $12.9 billion.
Analysts have become increasingly bullish over the past 12 months about Caterpillar’s benefiting from expanded infrastructure spending in the United States and worldwide on machinery and products in the construction, energy and mining sectors.
Each of Caterpillar’s three main divisions had a sharp increase in third quarter revenue: 47 percent in construction industries, to $5.26 billion; 22 percent for energy and transportation, which includes the Winston Salem plant, to $4.71 billion; and 53 percent in resource industries, to $2.2 billion.
“We remained focused on operational excellence and made early investments in profitable growth initiatives as we began to implement our new strategy,” Jim Umpleby, Caterpillar’s chief executive, said Thursday.
The company said that “Caterpillar is beginning 2018 with strong sales momentum resulting from strong order rates, lean dealer inventories and an increasing backlog.”
“Caterpillar is preparing its factories and suppliers to be ready for continued growth, while remaining focused on managing with a flexible and competitive cost structure that should enable the company to respond quickly if economic fundamentals change,” it said