STERLING – Caterpillar, which owns the Anchor Coupling facilities in Sterling and Dixon, will consolidate and move the plants to Michigan.
In early May, the company announced plans to consolidate the plants, but didn’t say where it might relocate operations, other than the possible sites were in North America.
In meetings Friday, Caterpillar told employees at the Sauk Valley plants that production and distribution operations would be moved to the Anchor Coupling facility in Menominee, Michigan.
Closing the Sauk Valley plants will affect about 170 full-time employees, according to a Caterpillar new release.
The decision was made after a yearlong consolidation study by Caterpillar.
Sterling Mayor Skip Lee said that until he was informed of the decision Friday afternoon, he had held out hope that the company would stay.
“It’s a sad day for this Sterling-Rock Falls area,” he said. “Those are jobs that we can’t afford to lose. The best scenario is people follow the job to Michigan, which takes talent out of the area.”
In anticipation of expanded operations, the Menominee plant will add about 120 jobs during the next year, Caterpillar spokeswoman Rachel Potts said.
Local employees will have relocation opportunities, she added.
Employees who lose jobs will receive severance packages, according to the news release.
The local plants will begin to “ramp down production” in the fourth quarter of this year, the release said, and are expected to be closed in the first quarter of 2015.
Lee said he wasn’t given a specific reason for Caterpillar’s decision to move the operations out of the area, only that the company was looking to increase efficiency.
Greg Folley, a Caterpillar vice president, said the company recognized that the decision would be difficult for employees, and he appreciated the quality work done at the local plants.
“This decision is not about the performance of these plants,” he said in the news release, “but rather about improving efficiency across the component manufacturing footprint and reducing the cost structure driven by three independent facilities, while providing the highest quality products to our customers.”
Anchor Coupling is at 2910 W. LeFevre Road and 1005 Commerce Drive in Sterling and 1100 Anchor Road in Dixon.
The company manufactures and supplies hydraulic hose assemblies.
Lee said he was happy to see the plants stay in the U.S., even if they couldn’t remain in the Sauk Valley.
“I hate to see them go,” he said, “and now we have to find out how to replace them.”