No Cocoon For This Caterpillar

You know my dear friends and enemies, times are tough for us regular Joes and Janes. Many of us are constantly wondering if our job is the next to hit the highway. We wonder how we are going to manage if that happens. And that wonderment is filled with fear, anxiety, and for some, downright terror. I got to hear that terror this morning from a cousin. He currently works for Caterpillar and he’s in bad shape knowing his days are numbered there.

Caterpillar says to cut 20,000 jobs
By James B. Kelleher

CHICAGO (Reuters) – Caterpillar Inc said on Monday that quarterly earnings fell more than 32 percent and warned of a tough year ahead as the downturn that began in the United States metastasized into a full-blown global recession that hit sales of its earth-moving equipment.

The company also warned that profit in 2009 would be under severe pressure and said that it would cut about 17,000 workers and buy out 2,500 others, to reduce costs in the face of what it predicted would be the weakest year for business since the end of World War Two.

The news sent the company’s shares skidding more than 10 percent in premarket trading.

The company reported a fourth-quarter profit of $661 million, or $1.08 a share, compared with $975 million, or $1.50 a share, last year.

Sales rose 6 percent to $12.92 billion.

Analysts, on average, expected the Peoria, Illinois-based company to report a profit of $1.28 a share on sales of $11.97 billion.

After shrugging off the downturn in U.S. housing that sparked the worldwide crisis, Caterpillar and other makers of bulldozers, dump trucks and excavators have suddenly faced a world of challenges, including a drop in spending by their well-heeled energy and mining customers.

Results last week from rival CNH Global NV and a profit forecast cut from Komatsu Ltd starkly confirmed that global demand for construction and mining equipment took a sharp turn down in the fourth quarter.

“We knew Caterpillar was going to be a disaster.” said Eli Lustgarten, an analyst at Longbow Research. “We just didn’t know the magnitude of it. And it’s ugly.”

Ugly is right. My cousin works at the corporate headquarters in Illinois. The buzz is toxic. The atmosphere is bad. An all-around bad situation. I understand why Caterpillar is in this bad of shape. With the housing market crash and foreclosures all over the place, the idea of massive home building just doesn’t ring true. But the human toll is still depressing.

People may like to think we’re not all in this together but we are. When industries suffer, it is a domino effect. We’re all in this together friends and enemies. And together we will have to suffer through this.

One Response to “No Cocoon For This Caterpillar”

1. Elle says:

   January 27, 2009 at 12:46 am

   Domino effect is a great way to put it T! All business depend on each other. When one business falls, others are sure to follow. Everyone is effected by this current economy. I mean look at all the celebs whose homes are being foreclosed on. This is not affecting the little guy…it’s hitting the big shots too. Interesting that when the big shots get hit is a “problem”.