Dallas, Texas 12/27/2013 (FINANCIALSTRENDS) – Caterpillar Inc. (NYSE:CAT) which has the distinction of being tracked by both Dow Jones Industrial Index and the S&P 50 index has a market cap of $58 billion. Over the past few quarters the tractor and heavy earth moving equipment manufacturer has been under pressure to up its sagging sales to increase its profitability. This comes on the back of 18 percent dip in sales on a quarter on quarter basis for the most recent quarter for which results were announced recently.
Hence on December 18, Caterpillar Inc. (NYSE:CAT) announced that it is all set to implement a restricting plan for its Belgium operations so that its European operations can be put in order. Disclosing this plan in the form of mandatory SEC filings, the company has indicated that, “We recently completed negotiations with the representatives of our hourly and salaried employees regarding separation benefits and the resulting proposals have been approved by a majority vote. These proposals are still subject to Belgian Ministerial approval. We estimate these employee cash separation costs to be about $300 million before tax, which represents substantially all of the restructuring charges to be incurred under the Plan. A decision by the Belgian Minister of Employment is expected during the first quarter of 2014, and subject to such approval, we expect to recognize substantially all of these separation-related charges throughout 2014.”
With the full fledged implementation of this plan Caterpillar Inc. (NYSE:CAT) hopes to bring in additional competitiveness into its European operations by realigning its “machine assembly, test and paint units”.
Readers should note that the major supplier of earth movers and other industrial machinery products has managed to post annual sales of $57 billion last year but had to make do with only $3.8 billion net income in the same period.