On Thursday, Caterpillar's (NYSE: CAT ) Belgian subsidiary announced a plan to create a "more efficient and competitive business structure for its Gosselies, Belgium facility."
The company said in a press release that it might need to close down "some operations that negatively impact the total cost structure of the plant." It might also include layoffs of about 1,400 "permanent jobs" out of the plant's total work force of 3,700 employees. That would be nearly 38%.
The subsidiary cited "limited" growth prospects and a "multi-year, economic downturn" in its home European market as catalysts for the cost-cutting, adding that divergent environmental standards in various markets, as well as increased foreign competition in Europe, exacerbated its financial woes.
Caterpillar also said it's quite simply often cheaper to import machines from other factories abroad, for sale in Europe, than to build them locally.
The company has not yet made a final decision on the planned layoffs, and says it is consulting with union representatives on its plans.