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Thursday, March 11th, 2010 | Posted by apons80

UPDATE 2-Caterpillar might build excavator facility in U.S.

*Move would triple CAT's US output of earth-moving machines *Would allow Japanese plant to focus on Asian demand *Would create hundreds of jobs in CAT's US operations (Recasts first sentence, adds details on proposed move, industry background, changes dateline previously NEW YORK) By James B. Kelleher CHICAGO, March 11 (Reuters) - Caterpillar Inc (CAT.N: Quote, Profile, Research) said on Thursday it may build a new hydraulic excavator plant in the United States, a move that could triple its current U.S. output of the earth-moving machines and add hundreds of jobs to its recession-ravaged payroll. The world's largest maker of construction and mining equipment, currently manufactures in Japan all but two of the hydraulic excavator models it sells in North America. The two non-Japanese made models are produced in a plant in Aurora, Illinois. The machines are essentially modern-day versions of what used to be called steam shovels. They are often equipped with buckets and used by builders to dig in confined areas. A Caterpillar spokesman said that if the company decides to build the new U.S. plant, Caterpillar would concentrate all its excavator production for North America at the facility. The proposed move would free up excavator capacity at the Japanese plant, permitting it to better serve the fast-growing Asian markets on its doorstep. It would also allow the Aurora facility -- which makes a variety of other construction-related equipment including wheeled dozers and soil compactors -- to simplify its operations and ramp up production of those tools when the hard-hit markets it serves eventually rebound. Caterpillar said a final decision on the move would come "at a later date." Even so, news of the study provided a ray of hope in a sector that has not seen a lot of light recently. The U.S. economic downturn that began in December 2007 has been especially brutal for manufacturing workers, who absorbed a disproportionate share of the job losses associated with the slump. Manufacturing generates less than 12 percent of U.S. economic output and accounts for less than 9 percent of the jobs in the country. Yet it accounted for more than 26 percent of the 8.4 million layoffs in the downturn, according to the U.S. Department of Labor. Last year alone, the U.S. manufacturing sector shed 11.4 percent of its total workforce -- the largest one-year percentage drop since the Great Depression, dwarfing even the 10.4 percent drop seen in 1945, when America's victorious industrial war machine throttled back production. Caterpillar alone has laid off more than 30,000 full-time and contract workers, many of them in the United States, over the past two years as it scrambled to bring its output of construction and mining equipment, and diesel and turbine engines, in line with fast-falling demand. Stock Market Today (Additional reporting by Helen Chernikoff, editing by Gerald E. McCormick and Matthew Lewis) UPDATE 2-Caterpillar might build excavator facility in U.S.

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Tags: a-later-date, a-new-hydraulic, asia, caterpillar, construction, industrials, japan, north, study, united

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