Caterpillar Inc. to shutter its Owatonna plant

Published 9:00 am Friday, November 9, 2012

By Derek Sullivan, Owatonna People’s Press

OWATONNA — Five Caterpillar Inc. executives drove to Steele County on Thursday to tell 100 employees the bad news that they will be without jobs when Caterpillar’s Owatonna plant closes on March 1, 2013.

Caterpillar spokeswoman Rachel Potts said the forest products plant, at 3249 South County Road 45 in Owatonna, will “ramp down production” between now and March 1. She also said that eventually all forest products made in Owatonna will transition to other Caterpillar forestry plants in Prentice, Wis., and LaGrange, Ga.

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Potts was one of four executives of the Peoria, Ill.-based company who met with Owatonna employees Thursday morning when employees were told about severance packages. Potts said the company would not comment on the length or amount of the severance packages or whether they included benefits, such as health care. Among the company leaders who spoke with employees was John Carpenter, president of Caterpillar’s Forest Products Division.

“We value our employees’ contributions, and these actions are not a reflection of them, but rather the result of a need to make our business more efficient and competitive,” Carpenter said in a press release. “We understand these decisions will be difficult for the lives of many of our workers and their families, and we genuinely regret that. In addition to working with local agencies on outplacement services, we’re also partnering with potential area employers, including other nearby Caterpillar plans, to host job fairs for impacted workers.”

Some 20 engineers will remain employed by Caterpillar and will work in Owatonna. Where the engineers will work will be determined later, as the company plans to sell the Owatonna plant. The plant has not been put on the market yet, but Potts said that will happen very soon.

Owatonna resident Carol Nelson built the plant itself in 1966 for his National Tree Expert business. In the early 1970s, National Hydro-Ax also started building forestry products in Owatonna. Nelson sold his interest in National Tree Expert and the company eventually moved to Austin, Texas. Nelson then invested the profits from the sale to become a part-owner of National Hydro-Ax. After a rapid growth in demand, Hydro-Ax sold to Omark Industries in October 1980, and at that point, the product line grew to seven tractor models. Then, in 1985, Blount Inc. bought the operation and became a 22-year staple in Owatonna until being sold to Caterpillar in 2007.

In April 2011, the Owatonna plant built its 10,000 tractor, a wheeled feller buncher.

Owatonna Mayor Tom Kuntz was disappointed to see a longtime local employer leave town.

“Anytime a company announces that they are going to close down in a community, it’s a sad day,” Kuntz said. “We hate to lose any employer, any business within our community.

“We met with Caterpillar, and it was a business decision. They felt it was something they had to do. It was not a reflection on the community or the employees.”

Along with offering employees a severance package, Potts also said Caterpillar will consider the employees for positions at other Caterpillar plants, including some Twin Cities locations that make paving equipment. In addition, Caterpillar will hold a job fair in the next couple of months. The job fair not only will include other Caterpillar locations, but other local and area employers.

“These employees have a wonderful skill set that is in demand,” Potts said. “We have welders. Welders are in demand, so are machinists. We want to help them find a place to use their skills.”

Kuntz recognizes that the 100 employees who will be losing their jobs have strong skills and he hopes those local residents will stay in Steele County.

“Those employees have skill sets that are needed in our community,” Kuntz said. “Hopefully, we can help transition some of those people to other places within our city.”

The news of Caterpillar’s leaving Owatonna comes a year after Chart Industries opened a plant, a couple months after Fareway announced the building of a grocery store on the former Oak Street location of the Owatonna Hospital and a couple weeks after Bremer Bank opened a location next to Truth Hardware. Brad Meier, president and CEO of Owatonna Area Chamber of Commerce and Tourism, said even with Caterpillar leaving town, Owatonna still has a bright future.

“We are really positive about the future,” Meier said. “Our economic development partnership looks at strengths of our community with the diversity of industry, our location and infrastructure. We think we are positioned extremely well and this announcement is unfortunate, but we are still extremely optimistic about the future.”