Employees at Caterpillar’s South Milwaukee plant were notified Friday, June 14, that planned layoffs of 260 employees would go into effect on Monday, June 24.
The notification comes three days after a new, six-year pact was ratified by the members of United Steelworkers (USW) Local 1343.
As it stands, close to a third of the plant’s 800 employees will be placed on “indefinite layoff,” according to the company.
“Our hope is that now that we have an agreement, Caterpillar will reach out to customers to make them aware that there’s an agreement in place to hopefully make orders so our people can get back to work,” said Ross Winklbauer, USW union sub-district director of District 4.
The statement from Caterpillar also says that a “vast majority of the South Milwaukee Manufacturing facility, including support and management employees” will be affected by two new, one-week temporary layoffs that were instituted with the new contract.
“The company can do temporary layoffs up to 10 weeks per year,” said Winklbauer. “The people that will be affected on the one week temporary layoffs will be eligible for $170 per week plus supplemental unemployment during the temporary layoff period.”
Sources familiar with the terms of the new labor pact described it as a “concessions contract” that basically froze wages for six years.
Caterpillar issued the following statement on Friday in response to media inquiries: “Caterpillar previously announced plans to lay off production employees in June at the company’s South Milwaukee, Wisconsin, facility. Today, the company announced to its workforce the details and specific timing for those actions, which will bring production in line with demand. Products built in South Milwaukee are used in the mining industry, and customer orders for those products are weaker than when compared to last year. As a result, we have notified approximately 260 production employees that they will be placed on indefinite layoff, effective June 24, 2013. In addition, the company is announcing two, one-week temporary layoffs that will impact the vast majority of the South Milwaukee manufacturing facility, including support and management employees. Some cost reduction measures have already been implemented in South Milwaukee and Oak Creek, such as previously announced indefinite and temporary layoffs of up to four weeks for other support/management employees; reduced hours for production employees, travel restrictions and controlled hiring. We know this is difficult for our employees and their families, and the company will do what it can to ensure impacted employees have support during this time. Ultimately, with lower orders from mining customers, we must take steps to bring production in line with demand.”
