Cat to close Waco Work Tools plant, cut 200 jobs

Updated Mar 3, 2018
Sensors on the bucket, stick and boom can automate the digging process resulting in perfect slopes and trenches.Sensors on the bucket, stick and boom can automate the digging process resulting in perfect slopes and trenches.

With the better part of a year and a few consecutive positive earnings reports since the company had closed a facility or eliminated jobs, it seemed like Cat may be through with cuts associated with a massive cost reduction plan announced in 2015. However, the company has decided that it will close its Work Tools manufacturing facility in Waco, Texas, eliminating 200 jobs.

According to a report from the Waco Tribune-Herald, Cat spokesman Jamie Fox said the closing of the Work Tools plant will not affect the company’s distribution center in Waco. The Work Tools plant manufactures excavator buckets, couplers and hammers and these operations will be transferred to a Cat facility in Wamego, Kansas, Fox told the paper.

Fox said the move was not dictated by waning demand for the attachments produced at the Waco facility. He added that “employees who lose their jobs will receive severance packages,” the paper reports.

The move is the latest of several closings and consolidations the company has performed since announcing its cost reduction plan nearly three years ago. The plan is designed to save the company $1.5 billion annually through the end of this year. So far the company has either closed or consolidated about 30 facilities worldwide.

The initial estimate for global job cuts was 10,000. However due to market conditions in 2016, the company had to be “more aggressive” than it had anticipated, with job cuts reaching more than 14,000. That being said, it looked as if the company was done with cuts not only due to the time between the previous closure and the Waco decision, but also due to a note in Cat’s 2017 full-year earnings report.

According to the report, the company’s global workforce had increased by more than 10,000 employees due to higher production volumes. The majority of those increases weren’t full-time employees, but “flexible workforce,” Cat said at the time. While the company would not say that the increase in jobs during 2017 was a sign that it was done cutting jobs, it did issue a statement to Equipment World saying “…we are continuing on the path to a leaner, more competitive cost structure in support of our strategy.”

The Waco Work Tools facility is the second attachment plant Cat has decided to close in the last 12 months. In March 2017, Cat announced that it would close its Elkander, Iowa, facility which manufactured excavator buckets, wheel loader buckets and dozing blades.

That announcement was followed by the decision in April 2017 to shutter facilities in Aurora, Illinois, and Gosselies, Belgium, eliminating 2,800 jobs.