Caterpillar in W-S more than halfway to its staff goal

The Business Journal

November 2, 2012

Caterpillar is more than halfway to its projected full employment at the $426 million heavy equipment axle manufacturing factory that opened in the Triad a year ago this month.

One of the factors that drew Caterpillar to Winston-Salem was the promise of a customized training program for its employees at Forsyth Tech. The state of North Carolina provided the school with $921,212 to establish that program, with the additional help buying equipment from the Golden Leaf Foundation and Duke Energy.

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Caterpillar is more than halfway to its projected full employment at the $426 million heavy equipment axle manufacturing factory that opened in the Triad a year ago this month.

There are currently 300 full-time and contract employees at work at the factory, according to figures provided by a Caterpillar spokesperson. Caterpillar qualified for state and local incentives worth nearly $54 million based on a hiring target of 510 workers, including employees and contractors, by the time the plant is at full production in 2014.

The company did not specify how the lowering of production and sales targets for the full fiscal year that was announced in the company’s third-quarter earnings report Oct. 22 would affect current employment or the pace of hiring at the Winston-Salem factory. But in a statement to The Business Journal, Caterpillar said its multiple facilities around the state would be taking cost-cutting actions based on individual business unit needs ranging from reduced travel to temporary layoffs or facility shut-downs, or moving to a four-day work week.

Caterpillar employs about 2,000 across the state at facilities in Cary, Charlotte, Clayton, Franklin, Goldsboro, Morganton, New Bern, Sanford and Smithfield. In 2011, it expanded its Building Construction Products factory in Sanford with plans to add about 325 employees to the 900 that already worked there.

The statement added that any cost reductions would impact both production and support as well as management personnel.

“We understand these types of decisions are difficult, but we also must manage our business for the long-run, and we must position Caterpillar for the next 85 years,” the statement said.

For now, though, Caterpillar said the Winston-Salem factory is running two shifts and building axles for three truck models. Production of axles for three additional truck models is due to start by February.

Caterpillar’s statement did not address questions about the status of the factory’s machining operation filling the western end of the 850,000-square-foot plant, which was not completed for the grand opening. Officials told The Business Journal in March that installation was under way for equipment that would allow the factory to machine its own components rather than bring them in from other locations. Caterpillar officials indicated at the time that full machining functions would be ready by early in 2013.

Training on schedule

One of the factors that drew Caterpillar to Winston-Salem was the promise of a customized training program for its employees at Forsyth Technical Community College. The state of North Carolina provided the school $921,212 to establish that program, with additional help buying equipment from the Golden Leaf Foundation and Duke Energy.

Alan Murdock, vice president of economic and work force development at Forsyth Tech, said 82 Caterpillar employees have completed the training program so far, which is about the pace the school and company had been expecting.

The training equipment bought for Caterpillar is available for use by other companies that might need it, Murdock said. So far, Bucyrus International, a mining company bought by Caterpillar in 2011, has made use of the facilities as well, but others could too, he said.

“This helps build our capacity at the college, and if the tools make sense for another business (to use for training), we’re on board for that,” he said.

Supplier impact minimal

Because of the structure of Caterpillar’s supplier network, local economic development officials were never expecting the opening of the factory to draw large numbers of supporting businesses to the area. That’s played out as expected, said Bob Leak, president of Winston-Salem Business Inc.

Leak said one business, Pennsylvania-based Keen Transport, has opened a facility adjacent to the Caterpillar factory on Temple School Road, and there may be other opportunities down the line. Keen provides storage and transportation for the massive axles the factory produces.

“But it’s been exactly what we expected,” he said. “Cat was upfront with us about that. The manufacturing plant itself was the prize we were trying to get.”

Mark Diveley, the facility manager at Keen’s Winston-Salem branch, said that office currently has five employees. How much that figure grows depends on how much Caterpillar ultimately produces.

“We may grow some people-wise, but we stay pretty focused on Caterpillar,” he said.