Caterpillar To Lay Off 2,454 Workers In 3 States

By DANIEL LOVERING

PITTSBURGH (AP) — Caterpillar Inc. on Tuesday announced plans to lay off more than 2,400 employees at five U.S. plants as the heavy equipment maker continues to cut costs amid the global economic downturn.

Caterpillar, the world's largest maker of mining and construction equipment, has seen its sales wither as the sluggish world economy and the credit crisis weaken demand for its products, used to build everything from houses to highways. The company had expanded dramatically in recent years, helped by a building boom in developing countries.

In response to the worsening conditions, Caterpillar in January announced job cuts that will ultimately eliminate 20,000 positions. It also said it would slash executive compensation by up to 50 percent and offer buyouts to about 25,000 U.S.-based employees. Caterpillar, which employs about 112,000 people worldwide, said it had imposed a global hiring freeze.

In the latest cuts, the Peoria, Illinois-based company said 2,365 support and management workers had been notified of layoffs expected to last at least six months — including 245 announced previously — and 89 workers will be let go permanently.

Among the affected workers are 1,726 people at plants in Illinois. They include 911 workers at a plant in East Peoria that makes track-type tractors and pipelayers and 815 at a factory in Aurora that produces hydraulic excavators and wheel loaders. Caterpillar notified the employees Tuesday of the layoffs expected to last at least six months starting in June.