Caterpillar Inc., Peoria, Ill., has announced significant restructuring
and cost-reduction actions that are
expected to lower operating costs by
about $1.5 billion annually once fully
implemented. The cost-reduction
steps will begin in late 2015 and reflect recent, current, and expected
The company’s 2015 sales and revenues for 2015 are expected to be
about $48 billion—$1 billion lower
than the previous outlook. For 2016
sales and revenues are expected to be
about 5 percent below 2015.
Key steps planned by the company
• An expected permanent reduc-
tion in salaried and management
workforce, including agency, of 4,000
to 5,000 people between now and the
end of 2016, with most occurring in
2015, and with a total possible workforce reduction of more than 10,000
people, including the contemplated
consolidation and closures of manufacturing facilities occurring through
• A voluntary retirement enhancement program for qualifying employees, which will be completed by the
end of 2015.
• A reduction in selling, general,
and administrative costs across the
company. This will be largely in place
and effective in 2016.
• A reduction in period manufacturing costs from additional contemplated facility consolidations and
closures that could affect more than
20 facilities and slightly more than
10 percent of the firm’s manufacturing square footage. A portion of these
cost reductions are expected to be effective in 2016, with more savings anticipated in 2017 and 2018.
This year is the company’s third
consecutive down year for sales and
revenues, and 2016 would mark the
first time in Caterpillar’s 90-year his-
tory that sales and revenues have de-
creased four years in a row.
“Several of the key industries we
serve—including mining, oil and gas,
construction, and rail—have a long
history of substantial cyclicality.
While they are the right businesses
to be in for the long term, we have
to manage through what can be considerable and sometimes prolonged
downturns,” said Doug Oberhelman,
Caterpillar chairman and CEO.
Since 2013 Caterpillar has closed
or announced plans to close or consolidate more than 20 facilities, affecting 8 million sq. ft. of manufacturing space. The company also has
reduced its total workforce by more
than 31,000 since mid-2012.
Women in Manufacturing
receives $100,000 grant
from the GE Foundation
Women in Manufacturing (WiM) has
received a $100,000 grant from the GE
Foundation as part of GE’s Developing
WiM is a national organization
based in Minneapolis dedicated to
supporting women in the manufacturing sector with year-round programming and a national directory for
women in the industry.
The grant will support WiM initiatives, including regional and national programming and, in particular,
new continuing education opportunities for women in the manufacturing sector.
“This funding is critical for supporting our efforts to develop and
deliver high-impact educational opportunities for women in manufacturing,” said WiM President Allison
Grealis. “Many available programs
for personal and career advancement
are simply too expensive for women
working in small and medium-sized
manufacturing companies. But we
know that these women—and these
companies—could really benefit from
enhanced and sector-specific skills
development programs and leadership training.”