After a year of mulling whether to close its York Distribution Center, Caterpillar Inc. has decided to keep it open and make it better.
Caterpillar announced Monday that it will purchase and modernize the 1.1 million-square-foot York Distribution Center at 600 Memory Lane in Springettsbury Township.
The announcement was made during a press conference at its facility. Caterpillar has been leasing the property for 13 years, and just signed the purchasing agreement early Monday, said Jim Dugan, Caterpillar's chief corporate spokesman.
Dugan declined to say whom Caterpillar is buying the property from. However, according to York County's tax records, the property is owned by Yorkkat Realty LLP and valued at $25.5 million.
Caterpillar told the center's 200 employees in October 2012 that it was contemplating a decision to move its operations out of York, he said.
The company told employees its final decision early Monday, Dugan said.
"We thank the employees for their patience," he said. "We wanted to take our time with this decision. We didn't want to rush the decision."
Dugan said the distribution center has a "great base" of employees who know what they are doing and they will continue to work in the facility while the modernization, or renovation, process is done.
Caterpillar's decision is "job neutral," meaning no mass hirings or job losses are expected during the "multi-year" modernization process that includes clearing modernization plans with Caterpillar corporate officials, Dugan said.
Then the company will establish a timeline for updating the building's infrastructure, technology and operating systems and equipment, he said. He would not discuss project costs. The modernization process would take several years to complete, according to Dugan.
Caterpillar is working with state officials to secure help with funding for the process, he said, adding that the company will wait for the state to make an announcement about it.
State officials could not be reached Monday. However, Gov. Tom Corbett did release a statement prior to the news conference.
"We were pleased to work with Caterpillar to help secure the decision by the company to reinvest in York, retaining the jobs of nearly 200 employees who clock in every day in York," he said. "After calling York home for 60 years, today's announcement marks an important step in the next chapter of Caterpillar's presence in the region."
Caterpillar opened the parts distribution center in 1953.
"We are excited the decision was made to invest in the existing facility," Jim Paprocki, the center's facility manager said in a statement. "We have a very talented and committed group of employees here, and are anxious to get started on the work ahead."
Besides York, Caterpillar has distribution facilities in Australia, Belgium, China, Mexico and the United Arab Emirates. The company has service parts management facilities in Denver, Miami and Melbourne, Australia.
During the news conference, Michael Smeltzer, executive director of the Manufacturers' Association of South Central Pennsylvania, thanked Caterpillar for deciding to keep the distribution center open in York.
After the event, Smeltzer said he hopes Caterpillar's stay will provide some "peer pressure" to encourage other companies to set up business in York, resulting in jobs and improved economy.
Though Caterpillar's decision doesn't bring additional employment, it does mean that 200 people get to keep their jobs, Smeltzer said.
"It could have gone the other way (if Caterpillar) decided to close the distribution center," he said. "But that didn't happen, and there's 200 families that are probably celebrating right now and that's something great."
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