Following multiple layoffs earlier this year, Caterpillar announced an additional series of layoffs this week at its Denison facility. On Wednesday, officials announced that about 15 production workers would be place on indefinite layoff, effective Friday.
“These actions are a result of the Van Alstyne warehouse consolidation and lower product demand,” Caterpillar Media Relations representative Lisa Miller said Thursday. “Caterpillar recognizes that this news is hard for its talented and dedicated employees, but is necessary in the current environment.”
This news follows 15 additional positions that were eliminated at the Denison facility in October due to the discontinuation of the company’s track drill product line, which was produced at the facility. This in turn followed and completed an announced reduction of 40 positions at the plant, in August, related to the drill production.
Layoffs at the Denison plant began in October 2015 when 30 positions were cut and production hours at the plant were reduced to a four-day-a-week schedule. Three months later, an additional 10 positions were cut from the Denison plant.
In May, officials announced plans to close a warehouse facility Caterpillar rented in Van Alstyne and consolidate those operations in Denison. As a part of that plan, officials announced an $8 million expansion of the Denison facility that would include a new paint station and a 14,000-square-foot warehouse. Miller said this expansion is expected to be complete later this month.
When asked about the layoffs, Denison Development Alliance President Tony Kaai said he was unaware of any additional layoffs, and that plant officials have historically called him regarding reduction in staff. After speaking with officials, Kaai said this week’s layoffs were completing staff reductions related to the closure and consolidation of the Van Alstyne facility. At the time, Kaai said 20 employees were laid off, with an additional 17 this week and three employees that were lost due to retirement.
These series of layoffs have occurred as Caterpillar attempts to cut its costs amid a down turn in the global mining and minerals market. In 2010, Caterpillar attempted to move heavily into the mining and drilling markets, which were experiencing a boom in developing countries including China and Brazil. The efforts included the openings new plants in China and the purchase of other machinery producers, including Bucyrus International, who operated the Denison facility.
These efforts ultimately turned into a losing bet after the market burst in 2012. Since reaching peak profits that year, the company has seen a continued decrease in demand and sales for its products as the market has stabilized. In an effort to balance its costs, the company announced a cost reduction effort that would include the elimination of 10,000 jobs and closure of 20 plants through 2020. Officials said this was in the hopes of reducing the company’s annual expenses by $1.5 billion annually.
Following this announcement, Caterpillar CEO and Chairman Doug Oberhelman announced in October that he plans to retire at the end of 2016.
With the ongoing layoffs, Kaai said his main concern was for the workers who were displaced by these cost reduction efforts. Since the layoffs started, Kaai said he has received resumes from multiple workers who were laid off and is attempting to find jobs for them in other industrial employers.
He said white-collar employees, including office workers and non-production workers, may have some difficulty finding a new position. However, production workers and those who worked industrial positions should have an easier time, he said, citing near record low unemployment that has left some positions at other industrial employers vacant.