Caterpillar Inc. will shutter its sprawling Work Tools complex on Texas Central Parkway by year’s end, eliminating about 200 jobs and contract positions, the Illinois-based company confirmed in an email Thursday.
Spokesman Jamie Fox said staffers were notified of the decision Thursday.
“This decision does not impact the separate Caterpillar distribution center in Waco,” Fox said.
Local operations will transfer to a Caterpillar facility in Wamego, Kansas, he said. The Waco Work Tools plant opened in 2005 to manufacture excavation buckets, couplers and hammers, according to information previously provided by the company.
Caterpillar continues to undergo a reorganization announced in 2015 that it said would slash between 5,000 and 10,000 jobs by this year, according to information on the company website.
Kris Collins, senior vice president for economic development at the Greater Waco Chamber of Commerce, said she was aware of Caterpillar’s decision to pull the plug on the local Work Tools operation.
“Our labor market is tight, but these are skilled individuals, and we will do what we can to find new opportunities for them,” Collins said.
She said the announcement by Caterpillar months ahead of the actual closing will give the chamber time to market the Work Tools complex, which includes buildings 128,000 square feet and 74,000 square feet in size, and is likely to attract attention.
“We have a vacancy rate of less than 3 percent on buildings of that size,” Collins said.
Fox, in his email response to questions, said employees who lose their jobs will receive severance packages, though he would not discuss specifics.
“The actions taken today will optimize manufacturing operations and ultimately ensure our products remain competitive in the global market,” Fox wrote in a prepared statement.
He said in a separate email that demand for the products produced in Waco has not waned.
Caterpillar’s decision to develop the Work Tools site in Waco followed the scrapping of plans for the local plant to build articulated trucks, commonly known as dump trucks. In the late 1990s, it spent $11 million to build a 128,000-square-foot facility on 103 acres it acquired from the Waco Industrial Foundation.
But by 2002, with the plant operational only two years, worldwide demand for Cat’s heavy equipment turned soft and it dumped the dump-truck plant.
Caterpillar kept the plant in “quick-start” condition for another possible use, and delighted local officials when it announced in 2005 that it would pull the facility out of mothballs to produce buckets and hammers.
Later, it erected a second building on that site and made other improvements, all while receiving millions of dollars in incentives from the Waco-McLennan County Economic Development Corp., which funds projects approved by the McLennan County Commissioners Court and Waco City Council.
Collins said Caterpillar has refunded all money it may have been obligated to give back under the contracts for the incentives.
After the Work Tools operation was underway, Caterpillar announced it had chosen Waco as the site for a new 750,000-square-foot distribution center, one that would consolidate operations at smaller centers in Dallas and Kansas City.
Since 2008, Caterpillar has leased warehouse and distribution space in the former General Tire manufacturing plant that started shutting down in the mid-1980s.
Founded in 1925, Caterpillar employs more than 110,000 people worldwide. Salaried employees make $53,883 to $122,716 a year, according to the website Payscale.com, though Fox declined to comment on the prevailing wage at the manufacturing plant on Texas Central Parkway.