Caterpillar may close its construction equipment facility in Gosselies, Belgium, laying off nearly 2000 workers if confirmed.
The potential closure is part of the company’s global restructuring and cost savings plan announced in September last year, and is driven by a drop in demand, after CAT recorded a five per cent fall in revenues year on year in 2015.
It announced plans to potentially reduce its workforce by up to 10,000 workers by 2018, having already closed or consolidated more than 20 facilities and reducing its global workforce by more than 31,000 since 2012.
“We have to contemplate actions to reduce manufacturing capacity and take operating costs out of our business to align with lower demand,” Tom Pellette, group president with responsibility for Construction Industries said.
The company is also discontinuing the manufacture of their room and pillar equipment, and track drills in an effort to “focus on those areas of the business that provide the highest, sustainable growth and best long term returns”.
As part of this product discontinuation decision, Cat will also lay off 155 workers at its Houston, Pennsylvania facility, where room and pillar products are produced, and 40 workers in Denison, Texas where track drills are manufactured.
CAT is also planning to allocate all volumes produced at the Belgian plant to other manufacturing facilities outside of Europe.
The announcement led to an immediate worker blacklash with nearly 60 employees using machinery in an attempt to block the facility’s entrance.
The company may also close their plant in Northern Ireland, cutting up to 250 jobs, later this year.
Belgian prime minister Charles Michel and other regional leaders are set to hold an emergency meeting with the company’s representatives regarding the closure, according to AP.
Paul Magnette, leader of the Wallonia regional government where the facility is based, was surprised by the announcement as the site recently received financial support from the government.
“Should the intention be confirmed, we will support the local leadership in order to mitigate the impact on our employees, their families and the communities where we’re located,” Pellette added.