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TOP DEAD CENTER

What About The Jobs?

The closing of Caterpillar’s $8.6 billion acquisition of Bucyrus International finally concluded in early July. Announced last November, the deal took a few weeks longer than the predicted “midyear” closing, as the mega-acquisition wound through myriad global anti-trust machinations. Finally, China blessed the deal and within hours papers were being signed and plans were being made.

Not coincidentally, Bucyrus’ neighbor and competitor Joy Global added
LeTourneau Technologies Inc. in May and China’s International Mining
Machinery Holdings Ltd. (IMM) later in July.
Suddenly the Milwaukee area — home to Joy and the Caterpillar Global
Mining group — becomes the center of the world mining equipment industry.
One of the interesting aspects to Cat’s acquisition of Bucyrus was the elimi-
nation of the Bucyrus name. Cat initially said it was leaning toward keeping the
over-130-year-old Bucyrus name. But when the documents were signed and
handshakes exchanged, the Bucyrus name was gone.
Cat wasted no time — Bucyrus signage start coming down soon after the
contractual ink was dry. By the time of the press conference and reception the
following Monday, everything carried the familiar yellow and black livery and all
the machines (save some Unit Rig trucks) were destined to be called Caterpillar.
This included the new Cat Mining Global headquarters in Oak Creek, Wis., and
the locally iconic Bucyrus South Milwaukee manufacturing complex. This fast
transition caused some furrowed brows and a bit of angst among the local press.
The implication was that this new interloper did not respect the history of Bucyrus.
The worries locally, however, went beyond the name change. Caterpillar —
despite its global, industry and market images — is a comparatively new face
on the local business scene.
Bucyrus was a homeboy. It was well respected, almost a textbook good
corporate citizen. While it had operations around the world, it was centered in
Milwaukee — from the executive offices to the shop floor.
And that’s where the local angst came from. Milwaukee has a long, proud
heavy manufacturing history. Over the years, Bucyrus had increased local
employment from a few hundred to over 1400 jobs.
How long would Caterpillar keep a large union plant in the Upper Midwest was
the unspoken core of the hand wringing. True, some Global Mining HQ jobs were
moving north, but in Manufacturing Milwaukee, the 20-year drain of shop-floor jobs,
plus a perceived anti-union political climate, gave local observers cause to pause.
But as all politics are local, in the end so are most deals like this. On the macro
side, yeah, Cat can really kick butt in mining now. Bucyrus shareholders are
smiling all the way to the bank and we won’t have to hold a bake sale for most
of the outgoing senior execs.
But local jobs? That picture is less clear. Again, Cat said all the right things
— mining is trending upward for the next 10, 20, 30 years and Bucyrus, er Cat
Global Mining, will trend up right along with it.
And even though the Cat Mining team was very visible on the shop floor at
shift change — hands shaken, assurances given, t-shirts handed out. Even with
that, disquiet, worry, remained. What about those 1400 jobs? dp