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Local News

Caterpillar will decide by March whether to move Joliet jobs to Mexico

Cuts would amount to 75 percent of remaining production

JOLIET – Most of the production and about a third of the remaining jobs would be moved from the Joliet Caterpillar plant if the company moves forward with a plan announced Thursday.

Caterpillar said it will decide by March whether to go ahead with the plan, which includes cutting 230 Joliet jobs – nearly all the remaining union jobs at the plant – and moving two production lines to Mexico.

"The two production lines they're looking at are probably 75 percent of what that plant is producing," said state Rep. Larry Walsh Jr., D-Elwood.

Walsh said he spoke with Caterpillar officials Thursday and will mount an effort to try to keep the jobs in Joliet.

"Nothing is set in stone," Walsh said. "I have asked Caterpillar to let us know if there is anything we can do."

GLOBAL COMPETITIVENESS

But a company statement suggested the prospects for keeping jobs in Joliet is not good.

"In studying the global landscape for producing these type of components, it is becoming clear that the Joliet location is not as competitive for these particular components," Jean Savage, vice president for Caterpillar's Advanced Components and Systems Division, said in the written statement.

Part of what will happen between now and March is a discussion with the International Association of Machinists union, which represents workers whose jobs are threatened.

Caterpillar spokeswoman Rachel Potts said the company announced its plan Thursday because "we need to give the time to have the appropriate discussions and some of the discussions will be with the local union."

Potts said the move would not be based on considerations such as taxes and policy issues that could be addressed by government officials. But, she said, "As we move forward and continue our discussions, if we need more information from local officials, we will reach out to them."

Ron Stanley, business representative for Machinists District 8, said the company gave the union a 60-day notice Thursday.

"Per the [union] contract, they have to give us 60-day notice for a partial plant closing," he said.

Stanley said he did not know what the prospects were for keeping jobs in Joliet, and the union will meet with Caterpillar.

JUST THE LATEST CUT

The move, if it goes forward, would be one more cut at the Joliet factory, which in the late 1970s employed nearly 7,000 workers.

Now, there are 770. About 250 of those are union employees. Potts said all 230 jobs that could be be cut are held by union employees.

Just in the last two years, the number of union employees at the plant have dropped from the 780 who worked there in 2012, when Machinists went on strike in an unsuccessful effort to prevent Caterpillar from reducing benefits.

“Their workforce here has gone down so much over the years, it’s hard to believe,” said Russ Slinkard, chief executive of the Joliet Region Chamber of Commerce and Industry.

If the company moves ahead with the plan, production would begin to be moved in the third quarter of 2016 and be completed in the second quarter of 2018.

Potts would not confirm Walsh's characterization of the plan as involving 75 percent of Joliet production, but said it is "a significant portion of the production work in Joliet."

Caterpillar would move production of gear and engine oil pumps and valves to a sister plant in Monterrey, Mexico. Production of truck struts and truck hoist cylinders would remain in Joliet.

Walsh said Caterpillar contacted him in his role as the state representative in the district that includes the Joliet plant. Walsh also is secretary-treasurer for Machinists District 8, and he once worked at the plant.

ONGOING CONCERN

The Caterpillar announcement is "not a surprise," said John Greuling, chief executive of the Will County Center for Economic Development.

"We've had a concern about Caterpillar all along – what their corporate plan is for Illinois," Greuling said. "Their chairman and CEO has made a lot of noise about the business climate in Illinois."

In 2011, Caterpillar Chairman and CEO Doug Oberhelman made headlines when a letter sent to then-Gov. Pat Quinn suggested the company was considering moving its corporate headquarters out of Peoria to another state.

In 2003, Caterpillar sold its land and buildings at the Joliet site to Oak Brook-based CenterPoint Properties and now leases its space.

Greuling said Caterpillar's decision to lease rather than own its Joliet operations gave the company flexibility.

"Unfortunately," he said, "this is an example of how they can be flexible with the Illinois workforce."

Herald-News Reporter Felix Sarver contributed to this story.

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