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JLG snaps up rights to build Cat's telehandlers

PLANT - £28.8 million deal will cost jobs as production moves to JLG's Belgian factory

ACCESS specialist JLG has signed a 20-year deal to build Caterpillar's range of telehandlers.

The manufacturer paid £28.8 million for the designs of nine machines, which will see production shift from Cat's Leicester factory to JLG's purpose-built telehandler plant in Belgium. The firm hopes to complete the move by next summer.

Caterpillar spokesman David Wilson said it was too early to say how many of the 400 jobs at the Desford site would be lost but it is likely to be in the hundreds.

The deal will enable Cat to expand its backhoe, loader and mini excavator lines at Desford to meet increasing demand, as well as cutting the cost of telehandler production by transferring it to a bigger factory. JLG in turn will become the world's biggest telehandler firm, building Cat-branded machines in both Belgium and at its US factory in Pennsylvania and distributing them direct via the Cat dealer network, such as Finning in the UK.

JLG chief executive Bill Lasky said: 'We look forward to the additional benefit of an expanded relationship as a major component supplier to JLG.' One industry expert said the deal would work well for both manufacturers. He said:

'Cat's telehandler has not been a big seller in Europe, so it will allow them to concentrate their research on other products.

'Meanwhile, JLG will be able to get huge efficiency gains for their own telehandler production by massively increasing the volumes in the Belgium factory.

But he added that the deal could be even more fruitful in the long run.

He said: 'The real prize is if they move on to collaborate on powered access ? for instance it could be the gateway to Cat having its first own-brand access platforms.' andrew. gaved@emap. com