Caterpillar posts £20m pre-tax loss during year of cost-cuts
Turnover at generator maker down for a fifth year running
THE Northern Ireland business of manufacturing giant Caterpillar suffered a £20m pre-tax loss last year, new accounts for the company show.
A report covering the 12 months to December 31 2017 reflected a difficult year in which it enacted cost-cutting measures and expressed continued concern about Brexit.
The generator maker, formerly FG Wilson, employs 1,600 peo- ple between sites in Larne and Springvale, west Belfast.
In the past two years it has closed a factory in Monkstown, sold part of its Springvale site and announced 250 job cuts.
Turnover has been declining year-on-year since 2012, dropping by £350m over five years.
That trend continued in 2017, with turnover down a further £10m to £445.7m. Pre-tax profits went from £10.1m in 2016 to a £20.9m loss last year.
The company said £4.8m could be directly attributed to its ‘factory consolidation process’ last year.
The Us-owned firm also said currency fluctuations had adversely impacted its accounts to the tune of £11.8m in 2017 when compared to 2016. It said the “small” decline in turnover was caused by the discontinuation of its material handler business.
But Caterpillar’s Northern Ire- land workforce has also been dropping year-on-year. From a staff of 2,923 people in 2011, that number dropped to 1,598 last year.
Economist John Simpson said: “The trading figures for Caterpillar NI have come as a disappointing report on a difficult year. The scale of the pre-tax losses, even excluding the impact of the discontinued business, show the scale of the task in regaining a profitable sustainable business.”
Assessing its performance last year, the company report stated: “During 2017 the business undertook further actions to consolidate manufacturing activity in Northern Ireland and the directors believe the competitive position of the company has significantly improved as a result of these actions.”
Caterpillar’s involvement in Northern Ireland began in the late 1980s, when it developed a relationship with small generator manufacturer FG Wilson.
By 1999, the American company acquired the Larne-based business outright.
Alongside producing generators, its operations have also included making axles for use in articulated trucks and wheeled material handler machines.
In its latest report, Caterpillar confirmed that its Brexit concerns pre-dated the EU referendum. The company has had a specialist team in place since before June 2016 vote, which continues to assess the potential impact on its business.
“With negotiations still in progress much uncertainty continues to exist and so this work continues, both centrally and within each individual UK business, considering all cases, including ‘worst case scenarios’ to the business, and will adapt as final details emerge of any final or transnational agreement.
“Caterpillar continues to advocate for the best climate for business.”