PEORIA, Ill. (TheStreet) -- On a day of further jobless worry and continued stock-market losses, Caterpillar showed up to assure the American citizenry that the big manufacturer was doing its part, at least, to save the day.
The company announced plans on Thursday to build a new 600,000-square-foot factory, which will manufacture hydraulic excavators. But, as the headline to its press release made clear, this wasn't just any old groundbreaking for any old plant:
"Caterpillar to Expand Manufacturing and Increase Employment in the United States With New Hydraulic Excavator Facility in Victoria, Texas."
Caterpillar didn't say exactly how many people it would now need to hire, thereby lessening the unemployment problem in the United States -- although the company did note that it would double the number of Caterpillar employees in the U.S. making excavators.
Construction is set to begin in September. Caterpillar said it hopes to finish the job less than two years later, with production to start in "mid 2012."
Various Victoria city fathers were pleased by the news. (Victoria, population 60,000, is an East Texas town near the Gulf of Mexico, 130 miles south of Houston.) We know this because the press release went so far as to quote them.
"Victoria is proud to play a role in Caterpillar's plans to expand its hydraulic excavator manufacturing in the United States, while at the same time Caterpillar will be an important part of the work to reinvent Victoria," intoned the mayor, Will Armstrong.
Judge Don Pozzi also had some things to say. He mentioned "these economic times," before adding, "I am certainly happy that Victoria County is positioned to help a project that will put local people to work."
Caterpillar's shares, meanwhile, declined 1.8% to $67.50 Thursday, extending their losses from Wednesday's brutal session, along with the broader market.
The move by Caterpillar comes as the company revamps its manufacturing systems in preparation for what it views as a coming global recovery. The new plant will take the pressure off a similar facility in Japan. Caterpillar said it will use that plant to supply the Asian markets, which have been booming for the company.
For the time being, Caterpillar only builds excavators in the U.S. at its facilities in Aurora, Ill. It has plenty of excavator production lines elsewhere, though. For example (in alphabetical order): Belgium, Brazil, China, France, Indonesia, the aforementioned Japan and Russia.
Caterpillar has been expansionist of late in a number of ways, from the
it had discontinued a few years earlier, to its $800 million
-- Written by Scott Eden in New York
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