Caterpillar has laid off 120 temporary staff at a plant in Texas following its decision to cut production in the wake of a tank in sales as a consequence of U.S. President Donald Trump’s trade row with China.
The layoffs, which occurred at the hydraulic excavator plant in Victoria on Nov. 1, had been confirmed by a company spokesperson on Monday. The facility had about 820 workers.
Kate Kenny, Caterpillar’s spokesperson, attributed the decision to “market circumstances.”
Caterpillar shares remained up 1.7% at $146.92.
In October, the world’s largest heavy gear manufacturer said it was taking steps to cut production after sales plunged across all product segments and in most areas in the latest quarter.
Sales in Asia-Pacific, its third-greatest marketplace, dropped 13% as Caterpillar witnessed plunging demand in China and competition from cut-price domestic competitors, while income in its major developed world market in North America sank nearly 3%.
The Illinois-based manufacturer stated trade rows made customers cautious of committing to large capital expenditures, hitting quarterly earnings, and forcing a cut in its full-year revenue scope. It expects the uncertainty to lead to lower sales this year.
Kenny didn’t say whether the production cuts would result in workforce reductions at different facilities. When requested, she mentioned Caterpillar was taking “various actions at its international plants to align production with demand.”
Caterpillar, an industrial bellwether and proxy for global financial activity, benefited in the past year from the strongest global development since 2010. Nevertheless, a tariff war between the U.S. and trade associates, along with China, has weakened business confidence and deteriorated the global economy.
In September, analysts at Moody’s Analytics estimated the commerce battle had price virtually 300,000 jobs in America.