BRUSSELS Caterpillar Inc (CAT.N), the world's largest maker of construction equipment, plans to cut 1,400 jobs at a plant near Charleroi in Belgium due to high costs and the weak European economy, the group's Belgian unit said on Thursday.
The cuts will come at the Gosselies site just outside of Charleroi, one of the largest Caterpillar facilities in Europe, where the group makes hydraulic excavators, loading vehicles and engine parts. The site employs 3,700 people.
"Though they are painful, these measures are indispensable to allow us to be competitive and give a chance of survival to our factory," said Nicolas Polutnik, CEO of Caterpillar Belgium.
The job cuts at Caterpillar are the latest in a string of large-scale layoffs in Belgium.
The world's largest steelmaker, ArcelorMittal (ISPA.AS), said in January it planned to shut facilities at its site in Liege, with the likely loss of around 1,300 jobs, while Ford Motor Co (F.N) announced last October it would close its plant in Genk, affecting 4,000 workers.
"The numbers we have received are a catastrophe, and that in a region like Charleroi...," a spokeswoman for the socialist FGTB union said.
About one in five people in Charleroi are unemployed, double Belgium's national average.
Apart from the economic slowdown in Europe and increased competition, Caterpillar said its products faced different environmental rules in different parts of the world, which made its production process more complicated.
Caterpillar said costs were so high at present that it would be cheaper to import machines from elsewhere than produce them at the Belgian plant.
Caterpillar has invested 210 million euros ($275.3 million)in the site in the past five years. ($1 = 0.7628 euros)
(Reporting by Robert-Jan Bartunek, additional reporting by Ben Deighton; Editing by Philip Blenkinsop)