More Details on the Bucyrus Purchase: Blue Collar Jobs Seemingly Safe

Update: Check out the Journal Sentinel’s editorial on the deal. It, too, casts a wary eye to the statements about job cuts and raises a point that I also have been concerned about: the potential impact the acquisition will have on corporate giving.

The Journal Sentinel has some more details on Caterpillar’s purchase of Bucyrus in Tuesday’s edition.

Here is the story. From it:

Under the deal, Caterpillar, based in Peoria, Ill., would move the headquarters of its mining equipment division to Bucyrus’ headquarters in Oak Creek. The Bucyrus plants in South Milwaukee and Milwaukee would remain intact, according to Bucyrus and Caterpillar executives.

Caterpillar would bring some senior managers here to run the mining division, including Bucyrus. That’s likely to come at the expense of some Bucyrus executives jobs, according to CEO Tim Sullivan.

“I am sure that with (Caterpillar’s) existing mining team, some of us at the senior executive level will not be required as time progresses,” Sullivan said.

“I will have between now and the closing (of the sale) to think about what I will be doing,” he added.

The combined companies say they expect about $400 million in cost savings, beginning in 2015, as a result of coming together.

The bulk of that savings won’t come from job cuts, according to Sullivan, adding that much of it would be from things such as combining equipment service centers and sharing a global distribution system.

“We see this as nothing but upside to continued growth and expansion of our Milwaukee operations,” Sullivan said. “I think it’s the best move, in the long term, for our existing employees.” …

In recent years Bucyrus has spent millions of dollars to upgrade and expand its Milwaukee area factories.

“The scale of the products that it makes in South Milwaukee is at least on par with the largest Caterpillar factories. I would not be terribly worried if I were a Bucyrus worker,” said Robert McCarthy, a senior analyst with Robert W. Baird & Co.

Also, the Journal Sentinel has a story about Sullivan’s future. See it here.