PITTSBURGH (AP) -- Caterpillar Inc. said Tuesday it would cut an unspecified number of contract workers in Decatur, Ill., as part of its ongoing efforts to slash costs in a tough economy.
The world's largest producer of construction and mining equipment began notifying agencies that employ the workers in Decatur, where Caterpillar has a factory, said spokesman Jim Dugan. He declined to say how many workers would be cut.
The Peoria, Ill.-based company also planned two one-week shutdowns in February and March in three other Illinois plants, Rick Doty, president of UAW Local 974, told the (Peoria) Journal Star.
The temporary shutdowns in East Peoria, Ill., will affect more than 1,200 workers, Doty said.
Caterpillar told the workers the plan could change, depending on business conditions, Doty told the Journal Star.
"We're not sure what is going to happen between now and then or whether there will be other temporary layoffs announced. It wouldn't be surprising," Doty said.
The Decatur plant produces three types of machines, including large off-highway trucks used in the mining industry, motor graders used for leveling ground and wheel tractor-scrapers used in construction.
Earlier this month, Caterpillar said it was ending its relationship with other contract workers in Peoria. The workers performed tasks ranging from factory work to office duties.
The company made similar work force reductions in North Carolina and Europe earlier this year.
Caterpillar has made the cuts as part of a plan that also includes limiting travel, external meetings and events. It employs about 112,000 people worldwide, excluding contract workers.
"Thus far, the vast majority of work force reductions have occurred as Caterpillar has managed its flexible work force made up of outside contract and agency personnel," Caterpillar said in a statement. "Historically, the overall percentage of our work force made up of agency or contract workers increases or decreases based on business needs."
In October, Caterpillar reported a 6 percent drop in third-quarter profit, saying higher steel and freight costs had offset record global sales. It forecast virtually flat sales for 2009.
Caterpillar, known for its trademark yellow-and-black earth-moving machinery, has broad geographic reach and a range of products that tap into various global industries.
Shares of Caterpillar rose $1.59, or 3.8 percent, to close at $43.80 on Tuesday.