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CATERPILLAR REDUCES DIVIDEND; ANNOUNCES PROBABLE CLOSING OF YORK, PA. FACILITY AND FURTHER DOWNSIZING AND CONSOLIDATION OF BRAZIL OPERATIONS

CATERPILLAR REDUCES DIVIDEND; ANNOUNCES PROBABLE CLOSING OF YORK, PA. FACILITY AND FURTHER DOWNSIZING AND CONSOLIDATION OF BRAZIL OPERATIONS
 PEORIA, Ill., Dec. 11 /PRNewswire/ -- The board of directors of Caterpillar Inc. (NYSE: CAT) today reduced Caterpillar's quarterly cash dividend from 30 cents per share of common stock to 15 cents, payable Feb. 20, 1992, to shareholders of record Jan. 21, 1992. The company today also announced the probable closing of its York, Pa., manufacturing facility and the further downsizing and consolidation of its operations in Brazil.
 The directors determined the dividend reduction to be a prudent action to conserve cash in view of the company's forecasted significant loss for 1991, uncertainties associated with continuing work stoppages at key U.S. manufacturing facilities and timing of the economic recovery.
 As to the York announcement, continuing analysis and evaluation show that the cost structure at the Precision Barstock Products Business Unit at York prevents that business unit from being competitive. If Caterpillar is unable to make sufficient reductions in the cost structure to make the business unit competitive, including the negotiation of an appropriate agreement with the United Auto Workers union, the business unit will be closed.
 Caterpillar has identified and is prepared to implement a number of steps to reduce the York plant cost structure. An essential element in achieving the necessary reductions is an adjustment in overall labor costs. The company has notified the UAW of its desire to negotiate a labor agreement which would reduce these costs.
 The Precision Barstock Products Business Unit employs about 1,900 of whom about 1,450 are represented by the UAW. The site includes about 1.5 million square feet of manufacturing space. The parts distribution operation in York, which is not part of the Precision Barstock Products Business Unit, would not be affected. The York Distribution Center employs 300, most of whom are represented by the UAW.
 If the manufacturing plant is closed, it's estimated that operations would continue until the 1993-1994 time frame.
 Currently, Caterpillar Brasil S.A., a wholly owned subsidiary of Caterpillar Inc., has two production facilities about 100 miles apart, one in Santo Amaro (near Sao Paulo) and one in Piracicaba. All operations in Brazil, including manufacturing, parts distribution and office functions will be consolidated at Piracicaba.
 The estimated cost for closing the York manufacturing operation and the Santo Amaro operations is approximately $220 million, most of which relates to York. The company plans to charge this amount in the fourth quarter of 1991, along with previously announced nonrecurring charges.
 Throughout the year, Caterpillar has been taking measures to improve results and conserve cash in all its operations. Planned capital expenditures have been reduced $100 million while preserving essential elements of the company's plant modernization and new product programs. Inventories of parts and production materials have been reduced by more than $200 million. Employment has been reduced by more than 4,000, a freeze on hiring of management and salaried employees remains in place and further employment reductions have been announced for various facilities. Each division in the company has been given challenging return-on-asset targets for which plans are in various stages of implementation.
 -0- 12/11/91
 /CONTACT: Gill Nolde of Caterpillar, 309-675-6058/
 (CAT) CO: Caterpillar Inc. ST: Illinois IN: MAC SU: DIV FC -- NY061 -- 2338 12/11/91 14:43 EST
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Publication:PR Newswire
Date:Dec 11, 1991
Words:554
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