Caterpillar Cuts Continue

This time, the mining giant is closing a plant in Virginia, this following the closure of a plant in Texas and another in Tasmania announced in recent weeks.

And all in, according to the Reuters report, more than 900 jobs have been cut in Cat’s Decatur, Ill., and South Milwaukee mining operations this year alone.

Let’s hope and pray the South Milwaukee plant is spared here.

From the article:

Caterpillar also makes construction equipment, railroad locomotives, and a variety of reciprocating and turbine engines. But mining equipment is its most profitable product category.

Those margins were one of the reasons it made mining equipment a focus of its merger and acquisition activity in recent years, buying Bucyrus, a U.S. maker of giant excavators and shovels, for $7.6 billion in 2010, and ERA Mining, a Chinese mining equipment company, for $654 million in 2012.

But the ink was barely dry on those deals before Caterpillar’s global mining customers, facing investor backlash over unpopular takeovers, budget overruns and falling metal prices, slashed capital spending, slowed development on some projects and shelved others entirely, and postponed or canceled new equipment orders.

That pullback, which caught Caterpillar by surprise, has forced the company to cut its outlook three times so far this year.

Last month, as it released disappointing third-quarter earnings, Caterpillar warned its 2014 sales could be down as much as 5 percent from 2013.

Over the past year, the company has cut more than 13,000 jobs, about 10 percent of the global total, as the slowdown in its mining business forced it to repeatedly post lower-than-expected quarterly results and repeatedly slash its outlook.