CHICAGO Caterpillar Inc (CAT.N) said on Friday that it will close another plant and lay off 240 additional workers as it continues to respond to a sharp drop in demand for its earth-moving products from customers in the mining industry.
The planned shutdown of the Pulaski, Va. facility, which makes coal haulers and other equipment, is expected to be completed by mid-2014. It is the latest in a series of such closures announced by the Peoria, Ill-based heavy equipment maker.
Earlier this month, Caterpillar said it would restructure a factory that makes underground mining equipment in the Australian state of Tasmania, idling 200 workers there.
Last month, it said it was closing a mining equipment facility in Kilgore, Texas and laying off the 100 workers employed in it.
Those closures and firings came on the heels of a number of smaller consolidations and shutdowns at plants in Beckley, W. Va., Tazewell, Va., and Sudbury, Ontario that put more than 75 employees out of work.
In addition, Caterpillar has laid off 900 workers at its biggest mining equipment plants in Decatur, Ill. and South Milwaukee, Wis.
Caterpillar also makes construction equipment, railroad locomotives, and a variety of reciprocating and turbine engines. But mining equipment is its most profitable product category.
Those margins were one of the reasons it made mining equipment a focus of its merger and acquisition activity in recent years, buying Bucyrus, a U.S. maker of giant excavators and shovels, for $7.6 billion in 2010, and ERA Mining, a Chinese mining equipment company, for $654 million in 2012.
But the ink was barely dry on those deals before Caterpillar's global mining customers, facing investor backlash over unpopular takeovers, budget overruns and falling metal prices, slashed capital spending, slowed development on some projects and shelved others entirely, and postponed or canceled new equipment orders.
That pullback, which caught Caterpillar by surprise, has forced the company to cut its outlook three times so far this year.
Last month, as it released disappointing third-quarter earnings, Caterpillar warned its 2014 sales could be down as much as 5 percent from 2013.
Over the past year, the company has cut more than 13,000 jobs, about 10 percent of the global total, as the slowdown in its mining business forced it to repeatedly post lower-than-expected quarterly results and repeatedly slash its outlook.
(Editing by Leslie gevirtz)