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Local manufacturing plants being consolidated

Sauk Valley not ruled out as new location, which will be ‘in North America’

Published: Friday, May 9, 2014 1:15 a.m. CDT • Updated: Friday, May 9, 2014 10:16 a.m. CDT
(Philip Marruffo/pmarruffo@saukvalley.com)
Caterpillar announced that it will consolidate the three area Anchor Coupling plants and relocate them somewhere in North America.

STERLING – Caterpillar, which owns three Anchor Coupling plants in Sterling and Dixon, plans to consolidate them into a plant somewhere in North America, a company official said Thursday.

Last week, Caterpillar announced to its 160 local employees that it was nearing completion of a yearlong consolidation study of its two operations in Sterling and one in Dixon, according to spokeswoman Rachel Potts. The Sauk Valley has not been ruled out, according to the company.

"We are not in a position to disclose the potential location of the consolidated operations, except to say that locations considered are in North America," Potts wrote in an email. "Consolidation of operations is not a result of the performance of the workforce, but rather based on the cost structure of the three facilities."

The company expects to finish the study and share the results within 45 days.

Potts wouldn't say how the consolidation would affect employees' jobs. Anchor, a wholly owned subsidiary of Caterpillar, makes hydraulic hoses and couplings.

Peoria-based Caterpillar's first-quarter earnings increased 5 percent, and the company brightened its 2014 forecast, but declining sales of mining equipment is hurting the company.

Caterpillar CEO Doug Oberhelman has complained publicly that Illinois offers a poor business environment.

In 2009, after Caterpillar announced it would lay off 20,000 workers worldwide, the company said it would reduce 10 percent of the local workforce, which was about 170 at the time.

Anchor Coupling is at 2910 W. LeFevre Road and 1005 Commerce Drive in Sterling and 1100 Anchor Road in Dixon.

Sterling Mayor Skip Lee said Caterpillar told the city about the consolidation study about a year ago.

"They indicated that Sterling was very definitely one of the places they were considering," Lee said. "We hope they stay here. Those jobs are valuable. I hope the study comes out positively for us, and that they will find that Sterling is a wonderful place to do business."

Dixon Mayor Jim Burke said Caterpillar and Anchor Coupling had approached the city about its consolidating efforts about 6 months ago, and 2 years ago had taken three trips to see a large facility in Dixon, that has since been purchased.

Burke said he was under the impression that the consolidation effort would result in a single plant in the Sauk Valley.

The lost jobs and business wouldn't be "catastrophic" for the city's economy, Burke said, adding that other local manufacturing companies have been increasing their workforces recently.

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