Caterpillar Inc. (NYSE:CAT) has announced that it plans to eliminate 1,400 jobs at one of its Belgium plants. The company said the reason for the cuts was the result of a the weak European economy and high expenses at the plant.
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Reuters reports that the cuts are expected to come from the company’s Gosselies factory, which is located just outside Charleroi. It’s one of Europe’s largest Caterpillar factories, and is where the company manufacturers loading vehicles, engine parts and hydraulic excavators. More than 3,500 people are currently employed there.
Caterpillar said costs are so high that it’s less expensive to import machines from other parts of the world than it is to manufacture them at the plant in Charleroi. Over the past five years, the company has invested about $275 million in the facility.
The loss of jobs in Charleroi is especially devastating to residents of the city. About 20 percent of the city’s population is unemployed, which is double the average unemployment of the country itself.
“Though they are painful, these measures are indispensable to allow us to be competitive and give a chance of survival to our factory,” Caterpillar Belgium CEO Nicolas Polutnik told Reuters.
Caterpillar Inc. (NYSE:CAT) isn’t the only company to eliminate jobs in Belgium. Steel giant ArcelorMittal (NYSE:MT) announced it would shutter some of the facilities at its Liege factory, eliminating approximately 1,300 jobs there. Ford Motor Company (NYSE:F) also said it would shut down its Genk plant, eliminating 4,000 jobs there.