Cater­pil­lar posts £20m pre-tax loss dur­ing year of cost-cuts

Turnover at gen­er­a­tor maker down for a fifth year run­ning

Belfast Telegraph - Business Telegraph - - Front Page - BY RYAN MCALEER

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.”

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