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Home / Commercial Construction / Bucyrus to keep presence in Milwaukee County (UPDATE)

Bucyrus to keep presence in Milwaukee County (UPDATE)

A Bucyrus 495HR electric mining shovel loads a Cat 793C mining truck at a mine site recently. Caterpillar Inc., the world's largest construction and mining equipment maker, said Monday it has agreed to buy Bucyrus International Inc. for $7.6 billion in cash. (AP Photo/Bucyrus International, PRNewsfoto)

A Bucyrus 495HR electric mining shovel loads a Cat 793C mining truck at a mine site recently. Caterpillar Inc., the world's largest construction and mining equipment maker, said Monday it has agreed to buy Bucyrus International Inc. for $7.6 billion in cash. (AP Photo/Bucyrus International, PRNewsfoto)

By Joe Lanane

Bucyrus International Inc. will stay in Milwaukee County despite Monday’s announcement that the mining equipment maker is being bought by Caterpillar Inc., officials say.

But whether Bucyrus will be based in South Milwaukee or Oak Creek is uncertain, and officials in both communities say it doesn’t matter as long as the jobs remain.

“Whether it’s South Milwaukee or Oak Creek, the better way to look at it is we’re locating to the greater Milwaukee area,” said Jim Dugan, Caterpillar spokesman. “A lot of these things will be looked at before the transaction closes, but the broader point is Caterpillar is coming and Bucyrus is not leaving.”

Mining equipment maker Bucyrus International Inc. has been in South Milwaukee for more than 100 years. The company is being acquired by construction and mining equipment maker Caterpillar Inc., the companies announced Monday. (Staff photo by Kevin Harnack)

Mining equipment maker Bucyrus International Inc. has been in South Milwaukee for more than 100 years. The company is being acquired by construction and mining equipment maker Caterpillar Inc., the companies announced Monday. (Staff photo by Kevin Harnack)

The companies announced that Peoria, Ill.-based Caterpillar, the world’s largest construction and mining equipment maker, would acquire Bucyrus in a deal valued at $8.6 billion including debt. Caterpillar will pay $92 per share for Bucyrus, a 32 percent premium to Bucyrus’ closing price on Friday. The acquisition is expected to be finalized by mid-2011, Dugan said.

For more than 100 years, Bucyrus has called South Milwaukee home. Company officials announced this year that the company would shift its headquarters to the former Midwest Airlines property in Oak Creek.

Caterpillar officials said Monday that the company’s worldwide mining headquarters would move to South Milwaukee, but Dugan said that announcement is based on Bucyrus’ current location and no long-term headquarters has been determined.

South Milwaukee Mayor Thomas Zepecki said he learned about the deal the same time as everyone else.

“It kind of shocked me (Monday) morning when I was watching the news,” he said. “I didn’t have any inclination this was happening.”

Zepecki said whether Bucyrus’ headquarters is in South Milwaukee or Oak Creek is less important than having the company maintain — and possibly increase — its 1,500 jobs across southern Milwaukee County.

South Milwaukee loaned Bucyrus $12 million four years ago to expand its plant operations and increase jobs. Zepecki said he did not think the acquisition would prevent Bucyrus from paying off the loan.

Oak Creek, on the other hand, is in negotiations with Bucyrus to establish a tax-incremental financing district to help the company with its new corporate campus on the former Midwest Airlines site. TIF districts let municipalities borrow money to subsidize developments and pay for utility and street work that serves projects. Communities then use new taxes generated by the projects to pay off the debt.

Doug Seymour, Oak Creek’s director of community development, said Bucyrus moved its executive operations to Oak Creek with the understanding that the city would provide financial incentives for moving.

“I think their roots are still in South Milwaukee, so it’s just a matter of where they call their headquarters home,” Seymour said, adding that he expected the TIF to be created and Bucyrus to have a presence at the former Midwest Airlines site. “They have an incredibly significant presence in both communities, and what they put on the letterhead is not a huge deal to us.”

Mike Ruzicka, president of the Greater Milwaukee Association of Realtors, said the company’s headquarters will not hurt area development opportunities as long as jobs aren’t lost.

“It has to be looked at on a regional basis, so it doesn’t matter if it’s Oak Creek or South Milwaukee,” Ruzicka said. “The people who work there don’t all live in South Milwaukee, so it’s not that big of a deal.”

One comment

  1. This is really good news, especially the 500 jobs they plan to hire. Now, to make this merger successful, and those jobs solid, the market for this equipment must improve. A big part of that market is coal mining operations. There must be a push for better, and more widespread coal-fired power plant technology and construction. All this big mining equipment (which by the way is not used to construct a single wind tower or solar panel) is useless and unnecessary, if we continue to reduce, eliminate and otherwise punish coal usage, as our current President and the radical environmentalists are on a mission to do. The relatively cheap coal, in it’s almost infinite supply needs to be utilized more, NOT penalized via some ‘made-up’ creative carbon tax. This will keep utility bills in line as well as road and building construction costs down.
    Yes, that’s right…construction costs. A little known ‘unintended consequence’ of the push to reduce coal fired power plants is, that’s where flyash, a byproduct of burining coal comes from. Flyash, far less expensive than cement typically replaces 30% of the cement powder used in paving concrete. (by the way, flyash is considered a ‘recycled product’) So, the reduction of available flyash, will significantly drive up the cost of concrete, making every road, bridge, sidewalk, curb, and building project (including the high speed rail), even more expensive. (while helping to complete Obama’s ‘plan’ and promise of ‘your utility bills to necessarily skyrocket’)
    Not to mention, the 500 jobs they plan on hiring, will be temporary at best, if the carbon-police continue to drive energy policy.

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