Caterpillar gave notice to the United Auto Workers Union on Wednesday that the company is considering moving its large size wheel loader and compactor production from its Aurora, Illinois plant to its Decatur, Illinois facility.
The move would mean about 500 new jobs for Decatur but would cost Aurora about 800 production jobs. The shift in production sites isn't about ramping up production but part of Caterpillar's continuing effort to cut costs. Since 2015, the company has announced the closure of 30 manufacturing facilities, cutting its manufacturing square footage by 11 percent and dropping more than 14,000 workers from its payroll.
Caterpillar is also considering moving the production of medium size wheel loaders to a facility in Little Rock, Arkansas. If the final decision is made to move production from Aurora, the facility would be used for office and engineering support services.
"Faced with lower demand, we continue to evaluate our global manufacturing capacity," Denise Johnson, Resource Industries group president, said in a press release. "We must use our existing space in the most efficient way possible while maintaining the ability to meet demand when it returns."
Caterpillar's global sales and revenue have dropped to $38 billion over the past four years, and the company said in its third-quarter financial report it does not expect an increase in sales for 2017.
Caterpillar gave notice of the contemplated closure to the United Auto Workers on Wednesday, and the shift in production will be addressed in negotiations, according to the company. A final decision about the production moves is expected in the second quarter of this year, with the move completed by the end of 2018.