90 jobs lost here as Caterpillar shuts plant

US machinery maker's S'pore manager says it has no further plans to revise business here

Caterpillar will retain the Jurong space for use by Cat Propulsion, which makes propulsion systems in a leased building elsewhere.
Caterpillar will retain the Jurong space for use by Cat Propulsion, which makes propulsion systems in a leased building elsewhere. ST PHOTO: SEAH KWANG PENG

The heavy machinery manufacturer Caterpillar has almost completed the closure of one of its facilities here at the cost of 90 jobs.

The move is part of a global restructuring plan announced last September that could see the American company axe 10,000 jobs and close more than 20 facilities over three years.

"(We closed the facility) late last year and we're still clearing it out. Some of the equipment is being auctioned off, most of the people have been let go," Caterpillar Singapore country manager Jeff Hardee told The Straits Times.

"We did notify the Government of our plans, and the Government was interested in the skillset of our employees and offered to help them. We had to reduce our manufacturing footprint; we really had no choice in that matter... We had to cut costs."

He added that there are no plans for further revisions here.

A Ministry of Manpower spokesman said: "MOM and the Workforce Development Agency are working closely with Caterpillar and providing the necessary assistance to the company and the affected employees."

Caterpillar's global revenues fell US$8 billion (S$10.8 billion) last year in the wake of the global commodities slump that has hit mining and building activity. The firm expects 2016 will be its fourth straight year of falling revenue.

Caterpillar, which made Singapore its Asia-Pacific headquarters in 2006, retains about 825 employees here across 29 business units, including dealer support and customer financing, as well as a large marine division.

The affected 24,000 sq m plant in Jurong was opened in 2010 and re-manufactured parts mainly for use in big mining truck engines. This involved collecting end-of-life parts and restoring them to as-new condition. Mr Hardee said: "It's sophisticated. We use additive technology to add back steel and iron to the parts, and then we bring them back to original tolerances and sell them as new."

Caterpillar will retain the Jurong space and turn it over to Cat Propulsion, a unit which makes propulsion systems in a leased building elsewhere.

Caterpillar is one of the world's largest manufacturers of heavy equipment. Its quarterly sales performance is widely watched by analysts as a barometer for the health of the resources sector and the wider economy.

Its rolling three-month machine sales in the Asia-Pacific, which includes China, was down 26 per cent as at the end of February from a year earlier, according to a Securities and Exchange Commission filing.

Asia-Pacific resources sector sales fell 56 per cent from a year earlier, making this the worst-performing region as far as the firm's exposure to mining activity goes.

Caterpillar runs manufacturing facilities across Asia but a lot of its products pass through the Singapore warehouse before they reach the firm's end customers.

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A version of this article appeared in the print edition of The Straits Times on April 02, 2016, with the headline 90 jobs lost here as Caterpillar shuts plant. Subscribe