Cat Evaluating Underground Mining Segment, Stops Taking Orders

August 18, 2016

Caterpillar will pursue "strategic alternatives," including a possible divestiture, for its room and pillar products, which serve a segment of underground soft rock mining customers. The company will also discontinue production of track drills within its Resource Industries portfolio.

“These moves, which align with Caterpillar’s ongoing restructuring, will allow us to focus resources on those areas of the business that provide the highest, sustainable growth and best long-term returns,” said Denise Johnson, group president with responsibility for Resource Industries. The room and pillar underground mining products under strategic review include continuous miners, feeder breakers, coal haulage systems, highwall miners, roof bolters, utility vehicles and diesel vehicles. While under review, Caterpillar will stop taking new orders. Production of track drills will be discontinued, and no new orders will be taken.

Workforce impact

Caterpillar says it expects to reduce the workforce by 155 in Houston, Pa., where the room and pillar products are manufactured. While the company intends to sell the room and pillar products, it will also assess other options, including a possible closure of the Houston facility. Some layoffs will occur immediately.

In Denison, Texas, where track drills are produced, approximately 40 jobs will be eliminated.

Winston-Salem

Cat will also transition its Winston-Salem, N.C., facility from mining to rail beginning later this year. Operations will transfer to Progress Rail, a wholly owned Caterpillar subsidiary.

As a result, the company will relocate the manufacturing of some components used in large mining trucks from its facility in Winston-Salem to its existing facility in Decatur, Illinois.

“Caterpillar remains committed to an extensive mining product portfolio. We firmly believe mining is an attractive long-term industry, and we continue to invest in a broad range of products, both surface and underground. We are targeting our investments within the mining product portfolio to concentrate on those areas with the highest profitability potential,” said Johnson. “At the same time, we continue to manage through the longest down-cycle in our history. We know these ongoing restructuring actions are not easy on our workforce; I’m grateful for our team’s ongoing dedication.” 

x
expand_less