PEORIA - When big manufacturers announces layoffs, dominoes begin to fall, and not only does the big company suffer, so do smaller manufacturers that repair machine parts and contract for specialty jobs.
Peoria's Caterpillar announced last fall orders in the energy and mining markets were slowing that would force the elimination of 10,000 jobs. Since September, Caterpillar has eliminated 2300 workers in the Peoria area, and plans to cut 2700 more.
In addition, Crain's reports, as many as 20 manufacturing facilities downstream could be hit by cuts and closures over the next three years, affecting another 5,000 workers.
"We are facing a convergence of challenging marketplace conditions in key regions and industry sectors—namely in mining and energy," Chairman and CEO Doug Oberhelman said in a statement. "While we've already made substantial adjustments as these market conditions have emerged, we are taking even more decisive actions now. We don't make these decisions lightly, but I'm confident these additional steps will better position Caterpillar to deliver solid results when demand improves."
All told, Caterpillar has said the job cuts will save the company $1.5 billion.
"Undoubtedly, many companies beyond Caterpillar are worried that this marks the first domino down in a chain that could impact many areas of the economy, including manufacturing, retail and technology,” said John Challenger, CEO of Challenger, Gray & Christmas outplacement firm said in the release.