Caterpillar to End Production of On-Highway Vocational Trucks
Caterpillar Inc. said it will stop production of its on-highway vocational trucks due to the “current business climate in the truck industry,” according to the construction machinery and equipment company
The move is part of a restructuring plan that includes combining two divisions dealing with power and energy by June.
“Remaining a viable competitor in this market would require significant additional investment to develop and launch a complete portfolio of trucks, and upon an updated review, we determined there was not a sufficient market opportunity to justify the investment,” Ramin Younessi, vice president of Caterpillar’s Industrial Power Systems division, said in a statement. “We have not yet started truck production in Victoria [Texas], and this decision allows us to exit this business before the transition occurs.”
This announcement will affect about 70 positions. The reductions will begin in March, the company said in a statement.
Caterpillar launched its first vocational truck in the North American market in 2011, working with Navistar on the products’ design and build.
The world's largest construction and mining equipment maker said Feb. 24 it will create the Electric Power, Marine and Oil and Gas Division through consolidation.
The company has closed plants and reduced its workforce in a restructuring announced last year as it copes with global weakness in construction and mining, soft commodity prices and slowed demand for heavy machinery.
At the end of 2015, the global workforce totaled 105,700 employees, down nearly 11% from 2013.
In its fourth-quarter report Jan. 28, Caterpillar said the outlook for 2016 "does not anticipate improvement in world economic growth or commodity prices."
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