JOLIET – Caterpillar Inc. has announced the company will move forward with a plan that includes the loss of 230 jobs from the Joliet plant and the move of two production lines to Mexico, according to a company statement released Friday.
The announcement comes just two months after the company first went public about a possible move from the Joliet area. A decision was expected by this month.
"The company has since completed all analysis and determined to remain cost competitive, it must move forward with the transition," the statement read.
Under the plan, the company's production of gear and engine oil pumps and valves will be moved to a sister plant in Monterrey, Mexico. The transition out of Joliet and into Mexico is expected to begin in late 2016 and be complete by mid-2018.
The International Association of Machinists union represents workers whose union jobs are being eliminated. Caterpillar gave the union a 60-day notice when it first announced the possible move in January.
A call to the offices of Machinists Union District 8 for comment Friday was not returned.
The news came as a major disappointment to state Rep. Larry Walsh Jr., D-Elwood.
"This company has been a mainstay in Joliet. It was a part of how Joliet has grown," Walsh said Friday. "At one time, it was the largest employer in the county. To kind of just turn their backs on it all for profit … It upsets me.”
A company statement stated that the "manufacturing of truck struts and truck hoist cylinders as well as the heat treatment of components, and the management positions that support those operations, will remain in Joliet."
Still, the fate of hundreds of remaining jobs remains unclear.
Caterpillar has announced that 230 union production line positions will be cut at the Joliet plant. But of the nearly 770 employees at the plant, there are hundreds of contract, managerial and other positions, Walsh Jr. said.
Some of the contract workers and a number of management positions "will move with the production," Walsh Jr. said.
"The rumor rolling around is that there will probably be about 30, 50 production jobs left," Walsh Jr. said.
When asked about the remaining jobs in Joliet, Caterpillar spokeswoman Rachel Potts wouldn't comment on specifics, but said the company “always continue to take a look at the entire strategy” and “take a look at what makes sense” for the company as a whole.
"What we're announcing today is the approximate impact," she said.
State Sen. Pat McGuire, D-Joliet, said he's heard from union members that the number of managerial employees and contract workers leaving "is in the hundreds."
McGuire said a Caterpillar representative broke the news to him during a phone call Friday morning. McGuire said he was disappointed knowing Caterpillar's move is about the numbers.
"I asked him about the hourly wages in Mexico. He said he didn't know. I asked him if the workers there would be union. He said he didn't know," McGuire said. "Men and women have been punching into work at Caterpillar for more than 50 years ... They never gave up on Caterpillar, yet Caterpillar is giving up on them."
Caterpillar's leasing agreement with CenterPoint Properties expires in 2018. The company in 2003 sold its Joliet plant and property to the Oak Brook-based developer and signed a 15-year lease at that time.
Potts wouldn't say Friday whether the company plans to renew the lease, but that this is “a discussion to have” with the developer.
John Greuling, president and CEO for the Will County Center for Economic Development, said his biggest concern is retaining whatever jobs may be left after this transition.
"Whatever is potentially left, we need to figure out a way to work with (Caterpillar), to keep those jobs here," Greuling said.
He said the move was no surprise, as manufacturing continues to decline in the U.S.
"Unfortunately, this was a shoe that was going to fall sooner or later," Greuling said. "We still have a fair amount (of manufacturing) in the country, and in the region, but they tend to be companies that are smaller or have high-skilled processes. For Caterpillar, this was a global decision."
The move is part of a series of cuts 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.
Just in the last two years, the number of union employees at the plant has dropped from the 780 who worked there in 2012, when machinists went on strike in an unsuccessful effort to prevent Caterpillar from reducing benefits.
The company's announcement comes despite attempts made by local officials to persuade Caterpillar officials to keep the jobs in the Joliet area. In the weeks following Caterpillar's initial announcement, Walsh Jr., McGuire, union leaders, and other officials, had reached out to the company about the prospects for keeping jobs in Joliet.
A Caterpillar spokesperson had said move was not based on considerations such as taxes and policy issues that could be addressed by government officials.
In a statement Friday, U.S. Congressman Bill Foster, D-Illinois, said he was "extremely disappointed" in Caterpillar's decision to move to Mexico and turn its back on workers and a community that has supported the company "for decades."
“Immediately after learning of this news, I reached out to union leadership to offer my full support during this difficult time," Foster said in the statement. "While this is a tough blow, I have no doubt that the resiliency of our community and our workers will prevail.”
The local factory is known as the Joliet plant, although it is actually located in unincorporated Troy Township.