- The Washington Times - Wednesday, March 18, 2009

Caterpillar Inc. of Illinois on Tuesday announced nearly 2,400 layoffs despite President Obama using his home state’s company as an example of a struggling manufacturer that would benefit from his economic stimulus plan and save jobs.

The new round of job cuts will span five plants in Illinois, Indiana and Georgia, and follows the January news that Caterpillar, the world’s largest maker of mining and construction equipment, would slash 22,000 people from its 112,000-person work force.

Mr. Obama hosted an event in support of his stimulus plan at the company’s Peoria, Ill., headquarters in mid-February, saying the $787 billion stimulus would be “a major step forward on our path to economic recovery.”

He quoted the company’s CEO, Jim Owens, as saying the plan’s passage would allow Caterpillar to rehire some of its laid off workers,

“That’s a story I’m confident will be repeated at companies across the country - companies that are currently struggling to borrow money … struggling to make payroll, but could find themselves in a different position when we start implementing the plan,” Mr. Obama said from inside the plant. “Rather than downsizing, they may be able to start growing again. Rather than cutting jobs, they may be able to create them again.”

But Mr. Owens, an Obama economic adviser, disputed the president’s theory at the time, telling reporters after the event: “The honest reality is we’re probably going to have more layoffs before we start hiring again.”

Freshman Rep. Aaron Schock, an Illinois Republican Mr. Obama singled out at the February Caterpillar event as a swing vote on the stimulus, blasted the administration in a statement after the job-cuts announcement. Mr. Schock, who ultimately opposed the plan, said the news suggests it was all “hype and promises” and accused Mr. Obama of misusing the workers as justification for his plan.

“Sadly, the false hopes that passage of the stimulus bill would enable them to keep their jobs are now a horrible letdown,” he said. “In my speech against passage of the flawed stimulus bill, I said, ‘This bill is too big to get it wrong,’ but these layoffs are another sign that they did get this bill wrong.”

But White House press secretary Robert Gibbs said Tuesday it will take time before the billions invested in mass transit and highway construction would reach the market to save jobs, noting 37 states have filed plans on how to spend the money.

Mr. Gibbs said the economy’s trajectory is responsible for the job cuts but urged patience.

“We’re confident, as the CEO is confident, that, in the long run, based on the Recovery and Reinvestment Act, the money that’s been lent will provide business opportunities for the company,” he said.

“As the money begins to go out … businesses will make different economic decisions,” he said, adding that taxpayers may make different decisions as well when the paycheck withholding tax cuts kick into effect next month.

The Associated Press reported that 245 of the 2,365 support and management workers laid off Tuesday had been announced previously.

The AP reported that among the affected workers are 1,726 people at plants in East Peoria and Aurora, Ill.; 439 at a plant in Lafayette, Ind.; and 289 in Jefferson and Griffin, Ga.

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