Caterpillar To Layoff Hundreds In Indiana

LAFAYETTE, Ind. -- Caterpillar Inc. is laying off 439 employees from its Lafayette factory for at least six months, part of thousands of layoffs in three states.

The Peoria, Ill.-based company, a major manufacturer of construction and mining equipment, said 405 production employees and 34 management and support workers are involved in Indiana.

Caterpillar cited lower demand for products made in Lafayette as the reason for the layoffs. The plant makes diesel engines for marine, petroleum, electric power, locomotive and industrial applications.

Company officials said the move will help it get through "a very challenging global business environment" and warned additional layoffs could come later this year.

"We hope things turn around, we hope they turn around quickly and we look forward to bringing people back as soon as possible," said spokesman Jim Dugan. "But we also have to manage the business appropriately when there's a downturn and that's part of what were doing today."

Caterpillar had already taken several measures in an effort to blunt the effect of the economic climate, including reducing executive and managerial pay, implementing hiring freezes, freezing salaries, cutting costs and overtime.

In all, 2,400 employees at five plants in Illinois, Indiana and Georgia are being trimmed as the heavy equipment maker continues to cut costs amid the global economic downturn. The layoffs are to begin on May 29.