Caterpillar Inc. will close two facilities in Texas and Panama and is considering shutting its engine manufacturing plant in Illinois as part of a strategy to boost profitability and better handle business cycles, according to Reuters.
The move could mean the elimination of 880 jobs.
The plant closures, which were announced internally over the past two months, were confirmed to Reuters by a company spokeswoman on Friday.
She said the move will affect its work tools facility in Waco, Texas, and its demonstration center in Panama.
Separately, Caterpillar’s Progress Rail unit is contemplating the closure of its engine manufacturing facility in LaGrange, Illinois, shifting the work to Winston-Salem, North Carolina, and outside suppliers.
“If the LaGrange decision is finalized, the closure would impact approximately 600 full-time positions related directly to engine manufacturing,” Caterpillar’s spokeswoman said, according to Reuters.
The world’s largest heavy-duty equipment maker emerged last year from the longest downturn in its history, when sales dropped more than 40 percent between 2012 and 2016.
The struggle led not only to a leadership change, it resulted in a credit rating downgrade by Moody’s.
Chastised by the sales slump, the Deerfield, Illinois-based company has embarked upon a restructuring strategy, looking to squeeze more production out of its existing factories, focusing on lean manufacturing, margin expansion and asset efficiency.