Caterpillar to lay off 120 East Peoria workers on June 29

PEORIA — Caterpillar Inc. announced the indefinite layoff of 120 workers at the company’s East Peoria plant on Wednesday. It marked the second round of layoffs of East Peoria Caterpillar workers this year.

This round of layoffs take effect June 29. Previously, 120 East Peoria workers were laid off in January.

The company said it was taking the action “to bring production in line with demand.”

“Products built in this location are used in the mining and construction industry, which continue to witness weak market conditions,” said spokeswoman Lisa Miller.

“While some cost reduction measures have already been implemented, including temporary shutdowns and reductions in the flexible workforce, more permanent measures must be taken in the near term,” she said.

In May, Caterpillar announced the layoff of 150 workers at its Decatur plant due to weak demand for the mining equipment manufactured there.

The global mining slump has cut into what had been the most profitable part of Caterpillar’s business.

In releasing its first-quarter earnings report in April, Caterpillar officials indicated that 2015 was going to be another tough year.

Mike DeWalt, VP of the financial services division, predicted the year would be the third consecutive year for sales declines for Caterpillar. “That’s happened only one other time in the history of our company and that was during the Great Depression in 1930, 1931 and 1932,” he said.

Brad Halverson, Caterpillar group president and chief financial officer, pointed out in April that mining accounted for much of the company’s $66 billion in revenue in 2012.

Sales dropped to $55.6 billion in 2013 and to $55.1 billion in 2014. The Caterpillar forecast is for $50 billion in sales this year.

“Mining (companies) had more mining trucks than they needed. Mining companies are using up that excess inventory. We’ll see a decent increase (in orders). We’re just not sure when,” he said.

Steve Tarter is Journal Star business editor. Tarter’s phone number is 686-3260, and his email address is starter@pjstar.com. Follow his blog, Minding Business, on pjstar.com and follow him on Twitter @SteveTarter