Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=115349
Story Retrieval Date: 7/22/2014 4:14:50 AM CST
After laying off 20,000 workers last month, construction equipment manufacturer Caterpillar Inc. wants to cut another 2,000 workers—mostly in Illinois—through voluntary early retirement incentive packages.
Enter President Barack Obama, who’s scheduled to speak Thursday at a factory in Caterpillar’s Peoria, Ill., headquarters, a part of his road trips to recession-hit hot spots. On Wednesday, Obama said in a speech in Springfield, Va., that Caterpillar CEO Jim Owens told him the administration’s economic stimulus plan, if passed, would enable the company to rehire recently cut employees.
Caterpillar announced Jan. 26 it would cut 10 percent of its workforce –12,000 full-time employees plus 8,000 temporary and contracted workers – in efforts to offset declining sales and a 32 percent drop in profit in the fourth quarter. During the same week, the company reported 2,110 more layoffs at Illinois factories in East Peoria, Aurora and Decatur.
About 2,000 workers at five facilities in Illinois and three in other states are being offered a cash-based incentive to encourage them to retire. The company does not know how many workers will take advantage of the package, which is directed at retirement-eligible employees, said spokeswoman Bridget Young.
When Owens appears with Obama on Thursday, he’s expected to promise to recall the layoffs if the economic stimulus bill is signed into law, according to reports from the Peoria Journal Star. The bill is still waiting approval from Congress and the White House. Neither the White House nor Caterpillar would offer more details regarding Thursday.
“We’re looking forward to President Obama’s visit tomorrow but don’t want to provide further comments,” said Caterpillar’s Young.
In Peoria, where Caterpillar employs 8 percent of the city’s workers, the company’s job cuts boost the local unemployment rate by half of one percent, according to the Peoria Area Chamber of Commerce.
“In the ‘80s, Caterpillar had a much greater footprint,” said Jim McConoughey, CEO of the Heartland Partnership, the Peoria-based organization that runs the chamber. Today, “the impact in the Peoria market is not that significant, but our hearts go out to all who are affected,” he said.
Shares of Caterpillar closed Wednesday at $31.13, up 21 cents.