On Tuesday, CAT announced plans to lay off more than 2,400 employees at five U.S. plants as the heavy equipment maker continues to cut costs amid the global economic downturn. In January, CAT announced job cuts that will ultimately eliminate 20,000 positions. It also said it would slash executive compensation by up to 50 percent and offer buyouts to about 25,000 U.S.-based employees
Among the affected workers are 1,726 people at plants in Illinois. They include 911 workers at a plant in East Peoria that makes track-type tractors and pipe layers and 815 at a factory in Aurora that produces hydraulic excavators and wheel loaders. Caterpillar notified the employees Tuesday of the layoffs expected to last at least six months starting in June.
This layoff was expected and already reflected in the stock price. During our pitch, we said that we believe CAT would mostly likely cut more jobs by the end of the quarter so this did not come as a surprise to us and still feel confident in holding our full position in CAT. On the day, CAT rose 41 cents.