Caterpillar (NYSE:CAT), the world's No.1 heavy machinery maker, revealed Friday that it may close its plant in Gosselies, Belgium, leaving more than 2,000 people out of work, as part of a streamlining and cost-savings plan announced last year.
The news triggered immediate reactions, with a group of about 60 employees seizing bulldozers and attempting to block the entrance to the plant, Belgium's state broadcaster - RTBF - reported.
It is also expected to stir up the political scene in the country, as Prime Minister Charles Michel is already facing accusations from opposition parties of failing to do enough to support jobs.
The possible plant closure is part of a global restructuring plan announced in September that could see CAT cutting as many as 10,000 jobs globally in the coming years."The closure of Caterpillar is an absolute catastrophe," said Elio Di Rupo, president of Belgium's opposition Socialist Party and the country Prime Minister between 2011 and 2014, the WSJ reported.
The politician noted the Gosselies plant received plenty of support from the government in recent years, adding that those workers had made sacrifices to keep the site going.
CAT, which currently manufactures construction equipment at the Belgium plant, said it might shift the production to its facility at Grenoble, France and other locations outside of Europe.
The Peoria, Illinois-based company, said it would now begin the formal "information and consultation process" on the closure of the plant. It said management was committed to a "constructive dialogue with the employee representatives in order to minimise the global impact".
On Thursday, Caterpillar had said it was also considering closing its Northern Ireland facility as part of business restructuring in that country, which could result in the loss of up to 250 jobs.
CAT's representatives were expected to attend an emergency meeting Friday with Belgium's Prime Minister and regional leaders to discuss the next steps, AP reported.
The heavy machines maker, which is still suffering from weak sales in the mining and energy sectors, poured cold water on the growing belief that metals and oil prices have bottomed out last July. At the time, CAT axed its full-year sales and profits forecast for a second straight quarter, saying that that global uncertainty, the vote in Britain to leave the European Union and the attempted coup in Turkey had heightened risks, especially in Europe.
The company's performance is often seen as a gauge of the health of the global economy, as its machines are huge, expensive, and used in different kinds of projects to which companies and governments are only likely to commit if they're confident in the economic outlook and their financial standing.