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Stimulus' Passage Would Allow Caterpillar to Rehire

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White House officials say if Congress approves the stimulus bill, Caterpillar, which recently laid off workers, would be able to rehire.

Los Angeles Times | February 12, 2009

Even before the stimulus deal was complete in Congress, President Barack Obama said Feb. 11 that evidence already showed his economic rescue plan would improve the lives of American workers.

The White House asserted three times that Caterpillar, which has laid off workers recently, would be able to rehire employees if Congress approved the stimulus bill.

But as the president prepared for a trip Feb. 12 to visit a Caterpillar plant in East Peoria, Ill., it was unclear whether the world's biggest maker of earth-moving equipment could provide an example of the stimulus bill's job-creating powers.

The Peoria, Ill.-based company would not say how many laid-off employees might return to work, or when. Nor would it say how many workers targeted for upcoming layoffs might keep their jobs.

Caterpillar also would not say whether the rehired employees would come from its U.S. workforce, which makes up about half of the firm's 112,000 employees.

Obama has traveled the country this week to build support for the stimulus package, which could reach his desk by the end of the week. Speaking at a highway construction site in Springfield, Va., the president predicted Feb. 11 that the jobs created by his plan would "multiply across the economy."

"Caterpillar, which manufactures machines used in this project, has announced some 20,000 layoffs in the last few weeks," the president said. "Today, the chairman and CEO of Caterpillar said that if the American Recovery and Reinvestment Plan passes, his company would be able to rehire some of those employees."

Caterpillar officials said they had not examined the agreement on the stimulus bill hammered out by House and Senate negotiators, and would not comment on the plan.

Despite the president's announcement, workers back in his home state of Illinois weren't sure how to interpret the comments that Obama said were made by Caterpillar's chief executive.

"He's not saying, 'I'm going to rehire U.S. employees or even Peoria employees,' " said Rick Doty, president of United Auto Workers Local 974, which represents thousands of Caterpillar workers. "He's just saying if [the stimulus bill] is to his liking, then he'll rehire some people that they laid off. To me, it's more of a threat than anything else."

At the end of January, Caterpillar CEO Jim Owens said the company would reduce capital spending and lay off nearly 20,000 workers in an effort to draw down production to match lower demand.

Wednesday afternoon, White House Press Secretary Robert Gibbs said he thought Owens had talked about the rehiring plans with Transportation Secretary Ray LaHood, who until recently represented the Peoria area in Congress. Late in the day, the White House issued a news release reiterating the point that if the stimulus plan passed, Caterpillar "would be able to rehire some of the employees they've been forced to lay off."

Owens is expected to fly to Peoria with Obama Feb. 12 and to introduce the president at the event there.

"They did communicate to the White House a reevaluation of their employment situation based on what they see as a big investment that could be coming shortly to put Americans back to work," Gibbs said of Caterpillar, "and to put particularly those workers in Peoria and the downstate Illinois area in particular back to work."

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