Business

Caterpillar lays off workers in Clayton, Sanford

Posted December 18, 2008 11:57 a.m. EST
Updated December 18, 2008 7:03 p.m. EST

— Days after the Caterpillar plant in Johnston County announced plans to expand, the company said it is temporarily laying off workers at its Clayton and Sanford facilities.

But the company – one of the world's largest makers of construction equipment – did not say how many workers the layoff affects or how long it will last.

In addition, Caterpillar is planning "additional non-production days" at both plants next year.

"We regret the need to take these steps, and we understand this will cause disruptions in the lives of employees and their families," Caterpillar said in a news release. "During these uncertain times, we must take steps to position Caterpillar for long-term success."

The reduced demand for the products made at the facilities prompted the layoffs, the company said. It declined to comment further about them. Some workers said they heard hundreds of employees could be affected.

In October, new housing starts fell 4.5 percent to an annual rate of 791,000 – the lowest since records began being recorded in 1959, according to Bloomberg news service. Building permits also declined to levels not seen since the 1960s. Both would be expected to affect demand for Caterpillar equipment.

The Clayton Town Council recently approved a plan to rezone 250 acres near the Caterpillar facility on the south side of N.C. Highway 42 for the company to test its products.

Mayor Jody McLeod said Thursday afternoon that the news surprised town officials. The only word of layoffs he has received came from reports in the community, he said.

Caterpillar is one of the three largest employers in the town, McLeod said, and if the layoffs are large-scale, it will likely send a ripple effect throughout the community.

Last month, WRAL LocalTechWire reported the prospect of layoffs and nonproduction delays.

Sources said an entire shift was to be eliminated at the company's Sanford plant and that approximately 100 contract workers would be affected.

Caterpillar also said that Thursday, it told 814 employees at its Mossville, Ill., plant, which assembles engines, of indefinite layoffs there.