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Caterpillar moving 600 jobs, regional HQ to Tucson; Rio Nuevo to back $50M project

While heavy equipment manufacturer Caterpillar is closing plants and delayed building a new global headquarters, the company plans to construct a new regional HQ in Tucson, adding about 600 jobs to its existing workforce here.

Many of the jobs will pay in six figures, officials said, and the total economic impact of the move is estimated to be about $600 million. The consolidation will take about five years.

Taxpayers will back the $50 million project. The Rio Nuevo redevelopment district board plans to make an upfront payment of $2 million to defray the company's moving costs, and will finance, design and construct the headquarters and an attached parking garage. Caterpillar would then lease back the building. The Rio Nuevo Board is set to approve the deal at a Wednesday afternoon meeting.

Caterpillar will lease space in a county-owned building Downtown while a new structure is built on Rio Nuevo land just west of Interstate 10, officials said Tuesday.

The company, which already employs about 300 at its local proving grounds, will add about 600 employees as it creates an office for its surface mining and technology operations here. The employees moving to Tucson will come from a number of Caterpillar sites around the world, including offices in Wisconsin and Illinois, a company spokeswoman told the Associated Press.

"This is a huge win for Tucson and the entire region," said Gov. Ducey in a news release. "In addition to bringing jobs and capital investment to Southern Arizona, a project of this level will have a ripple effect throughout the community and state."

Caterpillar will take over about 40,000 square feet at 97 E. Congress, on the corner of North Scott Avenue, with about 50 employees initially. After the company constructs a new office complex on a vacant Rio Nuevo lot south of Congress Street, on the West Side, the company plans to move another 600 employees here.

"Caterpillar will begin moving employees to Tucson in the summer," including those "executive management, engineering, product development and support positions," a statement from Ducey's office said.

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"The ability to get closer to our customers and tightly collaborate across all aspects of the business is at the center of our strategy," said Tom Bluth, a Caterpillar vice president. "This decision positions us to build on the tremendous capabilities present at our Tucson Proving Grounds and Tinaja Demonstration Center and deliver the next generation of mining technology and leadership."

"Caterpillar's vision is to create a global mining and technology center, and we are thrilled they have selected Arizona as the ideal location to support that vision," said Sandra Watson, president of the Arizona Commerce Authority.

Involved in negotiations for the deal were the Arizona Commerce Authority, economic development group Sun Corridor, Pima County, the Rio Nuevo District and the city of Tucson, Ducey said.

Plant closings, job cuts

Elsewhere, Caterpillar is shutting down factories and shedding jobs.

Company officials announced plans last week to close five manufacturing plants in North and South Carolina, Florida and Mississippi that produce engine parts, with about 800 employees set to be laid off.

In September, Caterpillar said it planned to decrease its workforce, with about 10,000 workers slated to lose their jobs. About 5,000 have already been laid off.

The company has about 110,000 workers around the world, said its 2016 revenue will be 38 percent lower than a peak of $66 billion in 2012. Drops in international demand for mining equipment have led to the earnings decrease. The same slack in demand for raw materials, in large part driven by the slumping Chinese economy, led to the recent closure of the Sierrita copper mine south of Tucson.

A plan to build a new global headquarters at the company's Peoria, Ill., home announced last year has been delayed.

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2 comments on this story

May 3, 2016, 1:26 pm
-1 +4

Uh oh. Where’s the Goldwater folks. They won’t like this

May 3, 2016, 10:32 am
-0 +4

Jobs is jobs. And since new (industrial) construction is really hurting in this ‘burg, this may be a good thing.

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