Cat is significantly reducing its manufacturing footprint in South Milwaukee — but investing significantly in what remains.
In that regard, this afternoon’s announcement about the retooling and redesign of the South Milwaukee plant — including the consolidation of nearly 260,000 square feet of it, or about half of its current manufacturing space — is not all bad news.
And it certainly could have been much worse.
From the Daily Herald in suburban Chicago …
In South Milwaukee, where the company makes electric rope shovels, hydraulic mining shovels and draglines, Caterpillar plans to redesign and retool the facility, removing the need for more than 260,000 square feet of production space in its manufacturing footprint.
“We continue to evaluate our operations for efficiency, to lower cost and to improve competitiveness. This decision allows us to more competitively position the products produced on these campuses, and it provides employees in these facilities clarity around our long-term plans for maintaining production,” said Ed Rapp, Caterpillar group president with responsibility for resource industries.
I am told the buildings Cat will vacate (by not renewing leases) are primarily located in the inner portion of the campus, with those along Rawson Avenue getting the increased (likely multi-million dollar) investment. The technical center and offices are not affected.
The announcement Monday will not affect current employment, which is obviously much less than it used to be. South Milwaukee has more than 700 employees.
I spoke with a local Caterpillar official this afternoon about the decision, and he positioned it as a significant investment in the facility to make it more competitive.
“The ultimate goal in this is to make South Milwaukee a world-class provider,” he said. “As you get more globally competitive, that is good for the employees, our customers, and the city.”
I agree. While it would be great to see the local plant humming along at full capacity in its current footprint, that seemed more and more unlikely with each passing day. Instead, we are getting a smaller, more efficient plant better positioned for the long term, in a changing mining industry that might be headed for an upswing.
Indeed, there are plenty worse alternatives.
Check out coverage from the Milwaukee Journal Sentinel,