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Caterpillar to lay off 155 workers, considers closing Washington Co. plant

Tribune-Review
| Friday, August 19, 2016 3:36 p.m.
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Peoria, Ill.-based Caterpillar closed a production plant in Houston, Pa.

Caterpillar Inc. is laying off 155 workers and might close a production plant in Washington County as the struggling industrial machinery maker looks to sell its mining-equipment business.

The plant in Houston makes room and pillar equipment for underground mining. In December, Caterpillar laid off 40 workers from the Houston plant as production dipped. Prior to those layoffs, the plant employed 340 workers.

“While the company intends to sell the room and pillar products, it will also assess other options, including a possible closure of the Houston facility,” Peoria, Ill.-based Caterpillar said in a statement.

Room and pillar equipment is used in coal mining, an industry that has been hurt by weak demand as tougher environmental regulations have led energy companies to close coal-fired power plants. The company said it will stop taking orders for those products as it tries to sell the business.

In addition to the latest layoffs in Houston, Caterpillar will cut 40 jobs from a Denison, Texas, factory where it makes drills used in underground mining. The company also will convert a plant in Winston-Salem, N.C., that produces mining equipment to focus on rail products.

Caterpillar, which had previously announced plans to lay off more than 10,000 workers and close or consolidate 20 factories companywide, last month reported a 16 percent drop in second-quarter revenue. Profit fell 31 percent to $550 million.

In addition to mining weakness, the company is being hurt by a strong dollar, which makes its products more expensive to export.

State Sen. Camera Bartolotta, R-Monongahela, called the layoffs in Houston “devastating news” for workers.

“The closure of this plant is another stark reminder of the importance of pursuing the responsible energy policy without singling out individual industries for undue punishment,” said Bartolotta, who is vice chair of the Senate Environmental Resources and Energy Committee.

Bartolotta has been critical of what she sees as excessive environmental regulations that hurt the energy industry.

Falling demand for coal has affected other companies with operations in Western Pennsylvania.

Downtown-based Kennametal Inc. has seen sales fall for drilling tools it makes. The company has sold or closed factories and, on Aug. 1, announced it will lay off 1,000 workers over the next 15 months.

Milwaukee-based Joy Global, which has more than 1,000 employees at five facilities in Western Pennsylvania, in March said it would close a plant in Franklin and lay off 382 workers there. The mining-equipment maker agreed in July to be acquired by Tokyo-based Komatsu in a $2.9 billion deal.

Alex Nixon is a Tribune-Review staff writer. Reach him at 412-320-7928 or anixon@tribweb.com.

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