Tag Archives: Caterpillar

Good Luck, Rocket Robotics!

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I had a chance to meet Rocket Robotics, FIRST Team 3596, last week, and I left feeling so impressed with our next generation of engineers and the work they’re doing — as well as with the community and business partnership it takes to make their work possible.

The robotics team, in its sixth year at South Milwaukee High School, is 15-20 students strong and is led by Brian Niggemann, a Caterpillar engineer who volunteers countless hours of his time to mentor the team and prepare them for their annual competition. He is joined by three other Caterpillar employee volunteers who bring their engineering expertise and guidance to the kids you see pictured above.

Caterpillar is also a significant funder of the program, paying the team’s entry fee and also donating funds and equipment used in building the robots. In addition to Caterpillar, The Rotary Club of Mitchell Field stepped up with significant funding this year, as well as smaller contributions from Vito Clean, Alliance Manufacturing Group, and Styled Aesthetic.

But it really comes down to the kids and the passion they bring to this, which was clearly evident when I visited with them.

I wish them good luck at the FIRST Robotics Regional Competition, scheduled for this Friday and Saturday, March 25-26, at the Milwaukee Panther Arena downtown. Learn more about the competition here. It’s open to the public and free. Stop by and see these students in action, and I’m certain you’ll come away as impressed as I was.

Their robot is wrapped in plastic below. They didn’t want to risk me breaking it 🙂

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Caterpillar Donates $40,000 To SMHS For New CNC Milling Machine

Cat milling machine

I just heard about this great example of local industry stepping up to support local kids.

From the South Milwaukee School District …

Through a generous $40,000 donation from Caterpillar, the Technology & Engineering department at South Milwaukee High School was able to purchase a new CNC milling machine.  The milling machine accepts computerized 3D modeled designs and machines them out of wood, plastic, or aluminum.  

The donation will also fund the future purchase of a 3D printer, design laptops, field trips, engineering kits, and professional development opportunities for teachers.  The equipment will be used to create a new rapid prototype lab for students to manufacture their design projects.

A big thank you goes out to Caterpillar and their support for our technology & engineering program.  Caterpillar sponsors and their engineers lead South Milwaukee High School’s FIRST Robotics Team.  Also, each year engineering students are invited to take a field trip to visit the plant and engineers then visit the school as guest speakers and engineering project judges.

Pictured is the Roland MDX-540 Bench Top CNC Milling Machine.

This is really cool. Thanks, Caterpillar. And good luck to our next generation of engineers and skilled workers.

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Caterpillar To Close Oak Creek Facility, Shift Jobs To South Milwaukee

Caterpillar announced to its employees on Monday that it will close sell its Oak Creek corporate building and move between 200 and 250 jobs back to South Milwaukee in the first half of 2016.

These are salaried professional workers in finance, human resources, legal, marketing, etc. — many folks who had been working in South Milwaukee prior to the opening of the Oak Creek mining headquarters in the former Midwest Airlines building about five years ago.

The move is not a surprise, given Cat’s announcement last month of up to 10,000 global job cuts and other consolidations coming in light of a continuing slumping mining industry. (Competitor Joy Global also announced job cuts last week.)

While it’s hard to call this great news — certainly when taking a broader perspective with economic development — it does strengthen Cat’s presence in downtown South Milwaukee and should help area businesses.

Cat also continues with its plans to invest in its manufacturing presence here.

A company spokesman tells me that the South Milwaukee plant — now in the company’s Surface Mining and Technology group — will be focusing on rope shovels and draglines going forward, and Caterpillar continues to plan investments in the facility in the next three years to meet eventual demand. Cat had previously announced the closure of 250,000 square feet of manufacturing space, while investing in the space that remains.

I’ll keep you posted.

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More Bad News For Caterpillar: Up To 10,000 Job Cuts Coming

Caterpillar plans to cut up to 10,000 jobs worldwide over the next three years, the company reported today, as it also announced reorganization of its mining division.

Check out coverage from the Wall Street Journal, ReutersUSA Today and CNBC. Here is the press release.

From the Wall Street Journal piece …

The Peoria, Ill.-based company said the job cuts would occur through a reduction in its salaried and management staff and, longer term, through contemplated plant consolidations and closures. Caterpillar is aiming to reduce annual costs by roughly $1.5 billion a year. …

The planned job cuts include reductions of between 4,000 and 5,000 salaried and management staff through 2016 but mostly this year. The potential plant consolidations and closings could affect more than 20 of its operations and slightly more than 10% of its factory floor space.

Caterpillar said that since 2013, it has closed or announced plans to close or consolidate more than 20 facilities, impacting 8 million square feet of manufacturing space. In addition, the company already has reduced its total workforce by more than 31,000 since mid-2012. …

Caterpillar also said it would revamp its mining business, as well as the company’s dealer and customer-facing divisions as part of the efforts to lower costs.

Details of the mining reorganization are contained in a company press release. From it …

As previously announced, Chris Curfman, vice president with responsibility for Caterpillar’s Mining Sales & Support Division is retiring, effective December 31, 2015. His division will be integrated into the existing Global Mining machine business divisions. Bringing product, operations, sales and marketing organizations together in both the surface and underground mining applications aligns well with our customers and will also enable a more effective cost structure in a challenging mining environment. The surface mining sales and support teams will join the Hauling & Extraction Division, which will be renamed the Surface Mining & Technology Division, led by Caterpillar Vice President Tom Bluth. The underground mining sales and support teams will join the Material Handling and Underground Division, led by Caterpillar Vice President Denise Johnson.   

So, what does it all mean for South Milwaukee? It remains to be seen.

I’ll keep you posted, especially if I hear more about potential impacts to our city.

 

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Going Big With Little Free Libraries

Little Free Library

Update: A point clarification, only those who requested libraries initially will get one for free. We are accepting no more requests for the complimentary libraries. 

So, you might remember in June that we put a call out to local residents interested in giving Caterpillar’s former Little Free Library a good home. We had a great response. Eleven people said they wanted one of these in front of their homes!

So we began wondering, “How can we say ‘yes’ to everyone who asked?’”

Well, we’re proud to announce that everyone who initially asked for one, will get one. That is due to a generous donation of time and expertise from local woodworker Larry Oleson.

I just met Larry a few weeks ago, and if you’ve driven down 15th Avenue near City Hall over the years, you may know some of his work. His carved wood (and some metal) pieces adorn the front of his house 2413 15th Ave., and he has even more terrific works in his garage, from tables and chairs to wooden animals.

He’s also no stranger to Little Free Libraries. He’s constructed more than a dozen over the years.

So when I asked him about taking this on, Larry was more than happy to help.

So was Ace Hardware, which is donating paint and stain for the project, and the South Milwaukee Library, which is donating some of the wood (from old library shelves) that Larry will use and provide some books for the libraries, as needed.

The plan: Larry now has the list of people who expressed interest in the libraries and will begin construction soon. The goal is to have everyone their free library by the time the snow flies, starting with the one from Cat.

I am really excited about this community partnership, and I want to thank Caterpillar, Ace, the library and especially Larry for his contributions.

This is why I love South Milwaukee!

Be sure to check out Larry’s work for yourself at his home. Give him a call first at 414-764-6786. Tell him I said hi, and please thank him personally for stepping up to help with this project.

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This Little Free Library Needs A Good Home

Little Free Library

Caterpillar wants to donate the Little Free Library you see here to a loving resident and neighborhood that needs it.

Are you interested, or know a South Milwaukeean who might be? Contact me via email at brooks@smwi.org.

And thanks to Cat for stepping up to donate this library. It used to be at their 11th and Milwaukee entrance, but they realized it would be better served in a neighborhood.

Could that neighborhood be yours?

Learn more about the Little Free Library movement here. I love the concept, and the fact that you already see so many of them around town.

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Much Smaller, But More Efficient: Big Changes Coming To Cat In South Milwaukee

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,

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Mixed Caterpillar Earnings And Other Headlines

Some good news/bad news in Caterpillar’s earnings, a Cudahy gun club update, St. Francis lakefront apartments proposed and more.

Check out these South Shore headlines …

Also, NOW has published a new police blotter.

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Profit Up, Sales Down For Cat

Caterpillar is out with its second-quarter earnings report, and results were mixed — but still concerning around the company’s mining prospects.

Check out coverage from the Wall Street Journal, Forbes and Bloomberg.

From Bloomberg …

Mining companies have cut billions of dollars of capital spending amid surplus commodities production and a drop in prices for coal, iron ore and other metals. Caterpillar, which completed a string of mining-related acquisitions when the market was stronger, said today the industry remains “weak” and order levels are still low.

“We are seeing our customers defer maintenance,” Chief Executive Officer Doug Oberhelman said on a conference call discussing a decline in mining equipment sales. “The bottom is just behind us. Our numbers are minuscule in terms of ticking up, but they are ticking up.”

Caterpillar’s sales of mining machinery through dealers dropped 38 percent in the second quarter, with declines in every region except North America.

The “mining slump is the No. 1 headwind for Caterpillar,” Matt Arnold, a St. Louis-based analyst with Edward Jones, said by phone. “It won’t last forever, but the question is, how well can the company harness improvement in its other segments in the meantime?”

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Strong Earnings For Caterpillar

Some good news in Caterpillar’s first-quarter earnings report, which came out Thursday … but mining continues to struggle.

From the Reuters story

Caterpillar said it expected its sales to the global construction industry to increase 10 percent from 2013, up from a previously anticipated rise of about 5 percent.

But it cautioned that 2014 would be “another very tough year” for mining, another key market, and that its outlook reflected an anticipated drop of about 80 percent in sales of large mining trucks from the company’s peak year in 2012.

Adam Fleck, an analyst at Morningstar, said he was pleasantly surprised by the company’s “very solid cost control in construction in particular,” where operating margins continued to grow and “were at their highest quarterly level in several quarters”, even though they were typically more compressed than in the mining equipment category.

Fleck said the weakness in mining “wasn’t terribly surprising” and added that because that once-critical business accounted for just 17 percent of sales and 12 percent of operating profit in the first quarter, any continued weakness in the sector was “more of a headline risk than a true economic one.”

The better-than-expected report was tinged with caution. Chief Executive Officer Doug Oberhelman said the Peoria, Illinois-based company was watching several regions closely. Having visited China recently, he said the construction industry there was facing challenges.

Caterpillar was also concerned about the situation in Ukraine and Russia, he added.

The news followed stories this week of mixed dealer data and of reduced 2013 compensation for the CEO.

Of course, we’ll continue to watch the Caterpillar news closely, especially that from the mining front, given our (and Oak Creek’s) position as the center of Cat’s global mining operations.

With that in mind, I had a really positive meeting with several local Caterpillar officials on Friday, as part of my ongoing efforts to introduce myself to local elected official and business owners.

I look forward to keeping lines of communication open … and I have Caterpillar’s commitment to do the same. Having a strong partnership with our largest employer is a priority for me as mayor.

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Mixed Q4 Results For Caterpillar

Profits were up significantly for Caterpillar in the fourth quarter of 2013, and the company on Monday issued a positive earnings forecast for the new year … but there wasn’t a lot of positivity in the sector South Milwaukeeans watch closest.

Here is MarketWatch coverage. From it:

Oberhelman said the company sees some signs of improvement in the global economy, which should bode well for sales in its construction and power systems businesses. However, despite expectations that mining production will continue to rise, the company sees mining companies further reducing capital spending this year.

“As a result, we’re expecting sales in resource industries to decline modestly,” he said. “ We’ve already taken a number of restructuring actions to help improve our financial results and expect to take additional actions in 2014.”

Reduced spending by mining companies has taken a toll on sales of mining equipment, while Caterpillar’s sales of construction equipment have benefited from a recovery of home building in the U.S. The heavy-equipment maker has been closing plants that make mining equipment and laying off workers to reflect a sharp drop in demand in the sector.

Of course, I always worry about the “additional actions in 2014.” The Reuters story included this …

He characterized the moves as “tough decisions necessary to better position us down the road when economic conditions improve and our sales rebound.”

I guess we’ll have to wait and see what “tough decisions” are to come. Let’s pray the worst is over.

Also, check out coverage from the Chicago Tribune and Wall Street Journal.

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Caterpillar Getting $1.2 Million Tax Refund Payment From City, Other Government Entities

The Wisconsin Department of Revenue recently found Bucyrus/Caterpillar overpaid on its property taxes during four of the past five years – and, because of it, the city, school district and other taxing bodies owe the mining company more than $1.2 million.

The South Milwaukee City Council last week approved an agreement that will refund that tax overpayment in varying amounts over the next four years. The $1,265,135.22 will be sent to Caterpillar in these installments …

  • 2014 (for 2008 overpayment): $283, 073.78
  • 2015 (for 2009 overpayment): $540,205.17
  • 2016 (for 2010 overpayment): $278,535.58
  • 2017 (for 2012 overpayment): $163,320.69

Caterpillar dropped its 2011 appeal as part of the settlement agreement.

Of course, as one of several taxing entities, the city is only on the hook for a portion of each year’s repayment, ranging from more than $56,000 in 2017 to more than $187,000 in 2015. All in, the city’s liability here is more than $437,000. The schools, for instance, are liable for more than $521,000 over the four years, with lesser amounts owed by the county, MATC and state.

I voted for this agreement because it was clear this was the best we can get.

Besides allowing for the gradual repayment plan – vs. requiring the city to pay one lump sum this Jan. 1 — the agreement waives any interest payments Caterpillar could have sought. In exchange, the city waives its right to challenge any Cat property tax assessments between now and 2017. I absolutely do not like that fact – but the benefit of retaining that right seemed relatively small since it is the state, not the city, that assesses industrial properties.

How did this happen? It’s hard to say, since the state makes the final call on industrial assessments. So we are reliant on what they determine (and must pay the price if they are wrong).

The issue in question dates to the days of Bucyrus more than five years ago, when the company first disagreed with the assessments on property outside of the tax incremental financing district (south of Rawson Avenue). The state disagreed. Bucyrus disagreed again. The state disagreed again. And so it went until a court found in favor of Bucyrus (now Cat) … and the state determined the manufacturer had overpaid for those four years. The city was informed of this final decision recently.

I’m certain the downturn in the economy had an impact here. Industrial land and property across the country was simply not worth as much during the time frame in question.

So, what does this mean for the city budget and property taxes? To be determined. The city will use its cash reserves to make the 2014 payment when it’s due in September. After that, future refund amounts can be added to the tax levy and not be subject to any state levy limits. That means it’s likely future homeowner tax bills will be affected by the ongoing refund payments.

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More Bad News For Caterpillar … And Exploring The Local Impacts Of The Layoffs

The hits just keep coming for Caterpillar …

The company reported Wednesday that profits are down more than expected, and they cut their forecasts again. From Reuters:

In an interview with CNBC, Caterpillar Chairman and Chief Executive Doug Oberhelman said he was confident mining customers would begin ordering again but acknowledged he did not have any idea when that would happen.

“Long term, the mining customers I’ve talked to lately are very bullish – as am I, and I have to be based on what they tell me,” Oberhelman said.

“But I don’t know if long term is next year, five years or 10 years. But it will come back. We’ve seen it every single time.”

Meanwhile, local impacts of the recent layoffs continue. WUWM has a good piece on those impacts, with interviews with area business owners and impacted workers. From it:

Across the street, sits a bar named Powers on 10th. Owner Joe Braun says, if not for the layoffs, the place would be packed this evening.

“A lot of those employees were people who like to come here at night after second shift or there’s a group of guys who would come after first shift. My group of guys who would stop here from 3:00 to 6:00 at night went from 10 or 12 people down to about four people, so yeah, it affects a lot,” Braun says.

Braun says business dropped so profoundly this past summer that by August he had laid-off several employees. He says he can’t afford to hire anyone right now, so he tends bar.

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Report: Caterpillar Confirms More South Milwaukee Job Cuts

Update: The number is 115 in South Milwaukee alone, Fox 6 is reporting.

Not good news … here is the Milwaukee Business Journal story. From it …

Caterpillar spokeswoman Rachel Potts confirmed to The Business Journal that layoff notices went out to employees in South Milwaukee and Oak Creek as recently as last week, but she declined to indicate the types of positions and number of jobs cut.

Potts said the latest local layoffs are in addition to 260 production jobs cut in South Milwaukee during the summer.

“We stated in our second quarter financial results released in July that the company would be taking actions to reduce costs in the second half of the year,” Potts told The Business Journal. “The employee notifications in both Oak Creek/South Milwaukee and Decatur are included in those actions. We are not breaking out specific location totals or details.”

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Another Tough Quarter For Caterpillar; More Job Cuts Coming?

Caterpillar’s second-quarter earnings report was another ugly one, with profit declines and a cut in the company’s annual earnings projections.

Of bigger concern: The potential for more job cuts. From the story in USA Today:

He said the company already has temporarily closed factories and had rolling layoffs. “We’ve taken significant action already, and we will be taking additional cost reduction measures in the second half of 2013,” he said.

Caterpillar cut its global full-time work force by more than 10,000 people compared with the second quarter of last year. The company had 122,402 employees at the end of June. The temporary work force also dropped by 9,633 during the quarter.

Also, check out coverage from Reuters, Bloomberg and the Milwaukee Journal Sentinel.

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