PITTSBURGH — Caterpillar on Tuesday announced plans to lay off more than 2,400 employees at five plants in Illinois, Indiana and Georgia 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 drastically in recent years, helped by a building boom in developing countries.
It also said it would slash executive compensation by up to 50 percent and offer buyouts to about 25,000 U.S.- based employees.
In the latest cuts, the Peoria, Ill.-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.
In February, Caterpillar said it planned to offer early-retirement packages to about 2,000 production workers.
President Barack Obama, during a visit to a Caterpillar factory last month, said the company’s chief executive, Jim Owens, had promised to rehire some workers if Congress approved the president’s economic-stimulus plan. But Owens later said more cuts were likely before the company could start hiring again and that a stimulus plan was unlikely to have an effect on the economy until late 2009 or early 2010.
The White House tried Tuesday to sound a positive note despite the news of more layoffs at Caterpillar.
Press secretary Robert Gibbs said the White House was confident the stimulus bill will create opportunities for Caterpillar and other companies to grow their businesses because of the many construction projects states will be breaking ground on.
