Caterpillar (CAT) - Get Caterpillar Inc. Report late Thursday announced layoffs and put part of its mining equipment business on the block as the company continues to try to weather a downturn in commodities that has cut into some of its key businesses.

Peoria, Ill.-based Caterpillar said in the announcement that it would pursue strategic alternatives, including a possible divestiture, for its room and pillar products used by soft rock mining customers.

The company will also discontinue production of track drills, and said it would cut about 155 jobs at its Houston, Pa., plant. That plant could eventually close, Caterpillar warned, if a buyer cannot be found.

Caterpillar said it would eliminate about 40 positions at a Texas facility.

The businesses to be shed primarily cater to the coal industry, which has been hit hard by low natural gas prices and stricter regulations that have steadily made coal less attractive in the marketplace. Caterpillar acquired the units as part of its ill-timed 2010 acquisition of Bucyrus International Inc. for $8.6 billion, which dramatically boosted its exposure to mining at the top of the commodities cycle.

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Weak commodity prices, coupled with the strong dollar, a slowdown in emerging markets, low oil prices and sluggish industrial spending, have caused issues for Caterpillar in the years since. The company has responded by repurchasing more than $8 billion of its stock but is expected to post its fourth straight year of declining sales.

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Caterpillar officials spooked markets in July when they said they did not see conditions in end markets improving until 2017 at the earliest. The company this week reported that rolling 3-month machine sales fell by 19% in July, compared to a 12% decline reported in the June period.

The company has more than $5 billion in total cash and a dealer network that is the envy of its industry, meaning it should have little trouble surviving the downturn. But management is not sitting still. Caterpillar in addition to looking for buyers for the coal unit said it would "repurpose" a mining facility in North Carolina to focus on Caterpillar's rail operation, though officials insist they are not giving up on mining altogether.

"We firmly believe mining is an attractive long-term industry, and we continue to invest in a broad range of products, both surface and underground," Denise Johnson, president of the mining equipment business, said, in the statement.

Johnson went on to say that Caterpillar is targeting investments in mining "to concentrate on those areas with the highest profitability potential," while conceding that the business is going through "the longest down-cycle in our history."

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