Marathon Pundit: Caterpillar says some laid off workers will never be rehired

Saturday, August 01, 2009

Caterpillar says some laid off workers will never be rehired

From AP on February 13:

President Barack Obama, campaigning to cast his economic plan in terms of real jobs and families, said Wednesday that machinery giant Caterpillar Inc. plans to rehire some of its laid-off workers if Congress approves a sweeping stimulus bill.

The president sought to offer a clear example of how the legislation would help as House and Senate negotiators reached for a final deal with the White House, trimming the emerging legislation down to below $800 billion. That's still an enormous package, targeted at an economy that continues to bleed jobs.

But Cat's CEO said that it wasn't true:

President Barack Obama's stimulus plan may be good for Caterpillar Inc., but the company’s chief executive says the equipment maker will probably have to lay off more staff before it starts thinking about rehiring any of the more than 22,000 employees it already plans to cut.

Even if a stimulus plan passes, it likely will not have an effect on the economy until late this year or early 2010, CEO Jim Owens said after a town hall meeting with the president and Caterpillar workers at a company tractor plant Thursday.

"The reality is we’ll probably have to have more layoffs before we can start hiring again,” Owens said without elaborating on a timeline or specific job cut numbers.

Last night Caterpillar announced more bad news:

For the first time since it began massive layoffs eight months ago, Caterpillar Inc. on Friday acknowledged publicly that some of its workers now laid off will not be called back.

In a video message to workers on indefinite layoff, the second such quarterly message produced by the company, Sid Banwart, vice president for human services, said that is "the reality" of the situation at Caterpillar.

While many have believed that to be the case since indefinite layoffs began last December, it's the first time an official with a rank of vice president or higher has said it publicly, acknowledged company spokesman Jim Dugan.

Let's go back to February:

Owens told reporters that the president's plan is too light on infrastructure spending. Only about 20 percent of it would be devoted to the kind of infrastructure work Caterpillar would benefit from, he said.