170 workers hit by Caterpillar axe

Nov 5 2008 by Peter McCusker, The Journal

CATERPILLAR is to axe 170 workers in the North East just months after making more than 130 staff redundant.

The US-based multinational truck maker yesterday blamed the economic slowdown for plans to shed more staff from its plant on the North West Industrial Estate in Peterlee.

This follows the loss of a 58 workers from the same site in June and the axing of 75 jobs at its sister fabrication facility in Stockton the same month.

And it is another blow for the county which appears to be suffering more from the economic downturn and credit crunch than the rest of the North East. Figures last week showed County Durham has seen a 20.8% increase in claimants for Jobseekers Allowance in the last year, well above the 11.1% increase for the rest of the region.

Caterpillar managing director Eric Lepine, said: “This is a very painful and regrettable decision that will affect 170 families and we have really tried everything we could to avoid making it.”

A company spokesman had explained jobs were being lost at the company “as a result of a re-evaluation of market conditions and production levels. Our previously very positive expectations have started to shift in the light of world financial events and a general softening in the European residential construction market.”

Caterpillar had announced earlier in the year that it was expecting to increase the North East workforce in anticipation of a growth in the number of contracts. It has since confirmed there will be no expansion.

All of the 300-plus workers who have been affected are agency workers. Caterpillar continues to employ more than 1,000 people at Peterlee and a further 200 at Stockton.

Stewart Watkins, managing director of the County Durham Development Company, said: “Caterpillar has been a fantastic advocate for the region for decades and will continue to be so.

“However, it is a supplier to the global construction sector which has experienced tough times recently. It has clearly had to respond to changes for the long-term viability of its operations in this region which has impacted on its agency staffing levels.”

Andrew Sugden, North East Chamber of Commerce director of membership and policy, said: “Caterpillar has been committed to the region for 40 years and is a key part of the east Durham economy.

“It has demonstrated strong support in both Peterlee and Stockton for many years but is now facing a period of consolidation as they face the full effects of the slowdown in the worldwide construction industry.”

OUT OF WORK

LATEST jobless figures show the number of unemployed in the region rose by up to 20,000 to about 96,000 in the last year.

One of the worst hit industries for redundancies is construction with North East-based Bellway Homes, Barratt Homes and Persimmon Homes all laying off hundreds of workers.

Last month Komatsu, the Birtley-based manufacturer of diggers confirmed it was laying off up to 30 temporary staff.

This followed a previous decision in June to axe the jobs of 90 temporary workers. It still employs 700 staff at the Birtley plant.

Last week The Journal reported how the North East is already suffering the key signs of a recession, with a huge growth in unemployment benefit claims alongside a sharp drop house sales, a rise in repossessions.

In just 12 months, the region saw claims for Jobseekers Allowance rise from 48,113 to 53,434. The claims date up to the end of the summer and are expected to continue to rise well into the new year.

In Durham, JSA claims went from 6,645 to 8,037 in just 12 months.