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Caterpillar Bringing New Plant to Arkansas

Fri January 09, 2009 - Southeast Edition

LITTLE ROCK, Ark. (AP) Caterpillar Inc. is to spend $140 million and hire 600 workers for a new road grader plant in North Little Rock — an announcement Jan. 5 that marked yet another new employer coming to central Arkansas.

Recently, the state has had its share of layoffs and plant closings, with the Fort Smith area hit particularly hard. A number of auto parts plants have had slowdowns or temporary closings because of the slump in automobile purchases.

Peoria, Ill.-based Caterpillar, the world’s largest maker of construction and mining equipment, conducted a yearlong national search before picking North Little Rock and signing the papers Dec. 31, facility general manager Jon Harrison said after Jan. 5’s announcement.

The company got $3 million from Gov. Mike Beebe’s $50 million Quick Action Closing Fund, from which Beebe said all money is now either spent or obligated. Other state incentives are available, too.

The Arkansas unemployment rate for November was up three-tenths to 5.7 percent in November, though that’s a full point lower than the national rate. Last month, Southwestern Energy Corp. announced it would build its employment total to as high as 900 in the state after it builds a regional headquarters in Conway. That city is also the site of a 1,200-worker Hewlett Packard Co. service and technology center that was announced a few months ago.

In Little Rock, three wind energy-related companies have either opened or announced they are coming, and one such firm is to open in Jonesboro. All told, those companies are to create more than 2,000 jobs. Two India-based pipe manufactures have chosen the Port of Little Rock for their operations in the region.

The Governor’s Conference Room at the state Capitol was packed for the Jan. 5 announcement, where Harrison said Caterpillar intends to make the North Little Rock facility a model factory for the company.

Work on refitting the former videotape and DVD production facility is to begin immediately, with production to start in 2010, Harrison said.

Harrison said Caterpillar will move road grader production from a plant in Decatur, Ill., where assembly of mining trucks is to be expanded. Harrison said there would be no layoffs as a result but company spokesman Jim Dugan said it won’t be known for another 18 months whether there would be any layoffs that result from moving the road grader work to North Little Rock. The plant at Decatur also makes wheel tractor scrapers.

Caterpillar last month announced it would lay off 800 workers at a Mossville, Ill., motor assembly plant and that it would end use of some contract workers. The company also cut executive compensation.

Harrison said the company will train workers, though Beebe said one reason Caterpillar picked North Little Rock is the ability to quickly adapt community college courses to the needs of a new employer. The company is eligible for training assistance. Harrison said the company is seeking employees who adhere to Caterpillar’s values, which he stated as “integrity, excellence, teamwork and commitment.’’

He said the company intends, through training and technology, to make the North Little Rock plant Caterpillar’s “crown jewel.’’

“There’s no reason that the best facility can’t be here,’’ he said.

The company will have to install overhead cranes and numerous other pieces of equipment to prepare for production, said Harrison, who is also general manager of North American motorgrader operations for Caterpillar.

Harrison would not say what the salary range for workers would be, nor would other officials.

“The vast, vast majority of those will all be local hires,’’ he said.

Harrison said demand was steady for the machines, which smooth roadways under construction, and that the plant will be an “important part of our global network.’’

Other state incentives the company is eligible for include refund of sales taxes on construction materials, income tax credits based on the payroll of new employees and a cash rebate equal to 5 percent of payroll for 10 years.

North Little Rock Mayor Patrick Hays said the city council will vote on an incentive package. Hays said the plant would get reduced electric rates for five years and that the city would move up construction of an electric substation. The city also is to provide a wastewater treatment station.

The $3 million Beebe assigned to the project will be used to develop a test track, an outside storage area and an entrance road, according the Arkansas Economic Development Commission.

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