Caterpillar has announced that its cost reduction efforts will continue with the closure of two more facilities and the elimination of nearly 3,000 jobs.
According to a report from the Peoria Journal Star, the heavy equipment manufacturer will move forward with the closure of its manufacturing facility in Aurora, Illinois. The move will eliminate 800 jobs and require that large wheel loader and compactor manufacturing be moved to the company’s Decatur facility, while medium wheel loader production will move to North Little Rock, Arkansas.
The newspaper reports that Cat reached an agreement with United Auto Workers that will provide severance pay and benefit extensions for the impacted employees in Aurora. According to a report from the Chicago Tribune, the agreement will provide employees with 40 hours of severance pay for each year of service to the company.
The Tribune reports that the move will mean an addition of 500 jobs to the Decatur facility and 150 to North Little Rock. The closure and transition plan is expected to be completed by the end of 2018.
Caterpillar also announced that it will close its facility in Gosselies, Belgium, the Star reports. Production of some equipment at that facility will be moved to “Grenoble, France, and elsewhere,” the Tribune reports, and would “possibly include shifting component production to unidentified external suppliers and other Caterpillar facilities.”
The Aurora and Gosselies closings follow the announcement that the company would also close a facility in Elkader, Iowa, eliminating 75 jobs.
They are the latest in a line of Caterpillar facility closings and consolidations that began in the final quarter of 2015 as part of a cost reduction plan designed to save the company $1.5 billion annually through 2018. One year later, the company announced that market conditions had forced it to be “more aggressive” than it had anticipated in making these cuts.
Though the company’s initial estimate on global workforce cuts was 10,000, as of October Caterpillar had cut 14,100—a 41-percent increase. With these latest closures, the company is approaching nearly doubling that initial job elimination estimate.
The company says it has consolidated or closed about 30 facilities, an elimination of around 11 percent of its global manufacturing square footage.