Caterpillar will be focusing on exploring strategic alternatives for certain mining products as part of the company’s plan to optimise its manufacturing footprint.
The company said it will focus on products with the greatest growth potential and seek strategic alternatives for its room and pillar products, which serve a segment of underground soft rock mining customers.
Denise Johnson, group president with responsibility for Resource Industries also pointed out that that Caterpillar is not excluding possible divestitures.
“These moves, which align with Caterpillar’s ongoing restructuring, will allow us to focus resources on those areas of the business that provide the highest, sustainable growth and best long-term returns,” Ms Johnson said.
She said the company will stop taking new orders while the business is under strategic review.
“Caterpillar remains committed to an extensive mining product portfolio. We firmly believe mining is an attractive long-term industry, and we continue to invest in a broad range of products, both surface and underground. We are targeting our investments within the mining product portfolio to concentrate on those areas with the highest profitability potential,” Ms Johnson added.
“At the same time, we continue to manage through the longest down-cycle in our history. We know these ongoing restructuring actions are not easy on our workforce; I’m grateful for our team’s ongoing dedication.”
The company will also be taking actions to reduce the workforce in Houston, Pennsylvania, where the room and pillar products are manufactured.
Ms Johnson said Caterpillar intends to sell the room and pillar products, but did not rule out the possible closure of the Houston facility.
“Total workforce reductions of up to 155 positions associated with the room and pillar business are expected, with some occurring immediately. These actions will more closely align employment levels with current end-market demand,” she added.
“In Denison, Texas, where track drills are produced, approximately 40 positions will be eliminated as a result of the track drill exit and other facility restructuring.”
Caterpillar also announced that it will repurpose its mining facility in Winston-Salem, North Carolina, into to a rail facility beginning later this year, with operations to transfer to Progress Rail, a wholly owned Caterpillar subsidiary.
“As a result, the company will relocate the manufacturing of some components used in large mining trucks from its facility in Winston-Salem to its existing facility in Decatur, Illinois,” the company said in a press release.