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Tracy Frank, Published March 07 2009

Local Caterpillar plants could face shutdowns, layoffs

North Dakota is not immune to the economic malady afflicting much of the global economy, especially in the construction and farm equipment industries.

Caterpillar, which has manufacturing plants in Fargo and West Fargo, is cutting costs through temporary factory shutdowns, voluntary and involuntary layoffs and temporary layoffs.

The company will not provide location-specific information, but the actions affect Caterpillar operations in every region of the world, including North Dakota, Jim Dugan, Caterpillar’s chief corporate spokesman, said in an e-mail.

The company, based in Peoria, Ill., is also reducing overtime, shortening work weeks, and significantly reducing compensation for executives and senior managers, Dugan said.

“We are trying to reduce costs in response to the business climate while also preserving as many jobs as appropriate and possible,” he said.

Cost-cutting measures are a function of the global economy until global credit markets loosen, said Brian Walters, president of the Greater Fargo-Moorhead Economic Development Corp.

“There’s been a fair amount of suggestion that we’re insulated from the events that are happening worldwide,” he said. “When you have global companies, which we’ve been intentional as a community to bring in to diversify our economy, it only makes sense that anybody doing global sales is going to be affected by what’s happening.”

Not all of Caterpillar’s cost-cutting measures will happen at the Fargo and West Fargo operations, which employ about 220 people, Dugan said.

“We are giving our operations the flexibility to manage operations as they see fit based on the business demand at each location,” he said.

Dugan said the cost-cutting measures are on an as-needed basis in response to economic conditions that affect the markets for Caterpillar’s products.

Caterpillar makes construction and mining equipment, diesel and natural gas engines, and industrial gas turbines.

The company bought Gremada Industries’ business of remanufacturing components and drive train assemblies last July.

Caterpillar is communicating with employees at each facility to let them know what is planned, Dugan said.

In late December, Caterpillar announced a voluntary layoff plan for all United States support and management employees. More than 2,000 employees signed up for the incentive-based program and have left the company, Dugan said.

In late January, Caterpillar announced permanent layoffs for 2,110 production employees and 416 support and management employees in Illinois to begin April 13.

Other recent local manufacturing job cuts include: