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- 2012 - February - 6th -

Caterpillar plans 39 jobs

by Karen Brune Mathis, Managing Editor

Caterpillar Work Tools Inc. proposes to add 39 manufacturing jobs at its West Jacksonville facility and will ask the Jacksonville Economic Development Commission this week for $117,000 in City and state incentives.

A summary for “Project Monarch” summary shows the company pledges to pay an annual average salary of $39,859, plus benefits of $13,950, for the jobs, generating an annual payroll of $2.1 million.

The commission meets at 9 a.m. Thursday at City Hall.

Caterpillar Work Tools pledges to create and keep the jobs for at least two years and also retain its existing 77-member workforce.

It said it intends to invest almost $3.9 million in manufacturing equipment and building renovations to allow for two manufacturing lines.

The building renovations would cost $1.13 million and the purchases of machinery, equipment, furniture and fixtures would cost almost $2.77 million.

It requests the incentives from the Qualified Target Industry Tax Refund program. The state would repay 80 percent of the refund, or $93,600, and the City would repay 20 percent, or $23,400.

Caterpillar would create 24 jobs by Dec. 31 this year and 15 more by Dec. 31, 2013. The summary states that the semi-skilled and skilled manufacturing jobs would provide job openings in an area of West Jacksonville with an unemployment rate of 20.6 percent in one census tract and rates that range from 10.6 percent to 29.2 percent in surrounding tracts.

The refunds would be paid over a five-year period after the 39 new, full-time permanent jobs are added and only after verification of the paid wages. The refund will be based on the amount of state and local taxes actually paid by the company.

The summary states that Caterpillar Work Tools was incorporated in Florida in 1999. It makes products including medium wheel loader couplers, buckets, forks, rakes and hooks for attachment to Caterpillar Heavy Machines used in construction and mining operations around the world.

The Westside operation originally was founded in Jacksonville as Fleco in 1970. Fleco was purchased by Balderson Inc. in 1983 and Balderson was acquired by Caterpillar in 1990.

It is a subsidiary of Caterpillar Inc., which is headquartered in Peoria, Ill., and is a global manufacturer with more than 104,000 employees among 480 locations worldwide.

Caterpillar Inc. posted 2010 sales of $42 billion.

According to the project summary, Caterpillar wants to reduce operating costs through consolidation of operations and lower costs.

“Each Caterpillar facility is required to compete internally for new capital investment and to increase volume,” states the summary.

“CWT is proposing to expand operations in order to respond to increasing order volume,” it said.

The summary states that Caterpillar’s Jacksonville facility is competing with facilities in Waco, Texas, and Wamego, Kan., for funding.

“The availability of state and local public investment programs to lower the payroll and operating costs enable CWT to bid competitively with Caterpillar facilities in Waco, Texas, and Wamego, Kansas, for expansion funding necessary to expand in Jacksonville,” it states

The summary states that the $39,859 average wage is equal to the 2011 Florida average wage.

The JEDC staff recommends to the JEDC that it authorize the introduction of legislation to City Council for the City incentive and also for Council to use its authority to require only two readings.

The draft economic development agreement also states that the JEDC will annually provide the reporting forms to the company and the company shall return the forms to the JEDC within 30 days of receipt.

It states that the jobs requirement will be assessed at least three times by the JEDC for potential reimbursement purposes and to determine that it complies with keeping the 116 jobs – the new and existing jobs.

The agreement also calls for Caterpillar Work Tools to publish job ads for the openings “in newspapers and periodicals, including the following: Florida Star, the Free Press and the Florida Times-Union.”

kmathis@baileypub.com

356-2466

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