Caterpillar Inc. plans to shutter three component production facilities in Illinois, affecting about 170 jobs in Sterling and Dixon, moving the work to a similar facility in Michigan.
The sites, all Anchor Coupling facilities — a wholly owned subsidiary of Caterpillar — make or distribute hydraulic hose assemblies for both Caterpillar and other equipment manufacturers. The work will be moved to an existing site in Menominee, Mich., in an attempt to cut costs and boost efficiency, the company said in a Friday afternoon news release.
“You’ve got three facilities spread out across two (locations) in Illinois that are doing essentially, primarily the same work as one facility is doing in Menominee,” company spokeswoman Rachel Potts said by phone Friday.
Combining them in the site about an hour northeast of Green Bay, Wis., will allow the company to eliminate some “redundancies in management structures” and internal logistics costs that come from having the work spread out over four locations, she said.
Production at the Illinois plants — one in Dixon and two in Sterling — will be slowed during the fourth quarter this year, and complete the consolidation in the first quarter of 2015, the company said in a news release.
Existing employees will have opportunities for relocation to the combined site, Potts said, though she could not cite the exact number of positions that would be available on the Upper Peninsula for Illinois-based workers to be considered.
The company eyed “a variety of locations across North America” before settling on the existing Michigan location, which will expand operations into a building across the street that Caterpillar currently leases, Potts said.
“In the end, the financial analysis just showed the team that the location in Menominee is a better location for efficiency reasons,” she said.
The analysis not only looked at overall business climate, but also at other costs. She said the Illinois sites also were reviewed, but would not detail what other locations in the United States or Mexico also were considered.
“We recognize that this decision will be difficult for our employees,” said Greg Folley, vice president with responsibility for Caterpillar’s Remanufacturing, Components and Work Tools Division, in a prepared statement. “We value and appreciate the work that our Sterling and Dixon employees have contributed and their dedication to producing and distributing quality products. This decision is not about the performance of these plants, but rather about improving efficiency across the component manufacturing footprint and reducing the cost structure driven by three independent facilities, while providing the highest quality products to our customers.”
This is the latest in a series of plant closures or consolidations for the company, which shed 10 percent of its total work force — about 13,000 employees — last year according to the International Business Times.
The shifts include the closure of a Pulaski, Va., coal hauler plant and the planned shutdown of a marine engine plant in South Carolina that was announced in April. Jobs at that latter facility are expected to be moved to other facilities in Georgia and Texas.
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