PEORIA, Ill. -- Three Caterpillar tractor plants in Illinois and Iowa are targeted for consolidation and severe production cutbacks in order to cut the company's losses, officials said Thursday.
The plants are located in Joliet and Mapleton, Ill., and Davenport, Iowa.
The announcement was in response to growing speculation that the 28-year-old Davenport plant would close. Caterpillar officials made no comment on changing employment levels, but indicated some employment cutbacks as they consolidate production at the three plants.
'The key word is consideration,' Caterpillar spokesman Steve Newhouse said. 'Nothing is cast in bronze.'
But officials said the elimination of cost-of-living allowances and paid personal absence time for salaried employees are certain.
In Mapleton, employment reductions will take place in the next two to three years as Caterpillar determines if outside contractors can provide the castings currently made at the plant.
In Joliet, two separate operations will be consolidated into one and manufacturing space will be reduced by approximately 500,000 square feet.
And, in Davenport, the company intends to move track-type loader production to Grenoble, France, in 1985, and take the new model D6 tractor to Glasgow, Scotland, in 1986. This change could result in employment reductions at Davenport.
'The dimension and timing of the reduction in costs and enhanced cash flow expected from these measures are significant,' company officials said in a prepared statement. 'Any further consolidation measures should be of a relatively minor nature.
The plans are in line with the company's 22 percent cost reduction program, a severe cutback strategy announced earlier to restore profitability to the construction and agricultural equipment maker.
