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Construction machinery maker Caterpillar Inc.'s (CAT) plans to lay off additional workers underscores the swift downturn in the global mining industry.

Nearly half the 2,110 job cuts announced Friday by Caterpillar will come from the company's Decatur, Ill., assembly plant where its massive earth moving trucks are produced.

Sales of the trucks, which cost about $2 million each, boomed in recent years on increased demand from miners of copper and iron ores and other mined commodities. The trucks also became an indispensable component for increased oil production in western Canada's tar sands region.

Caterpillar's order backlog for the off-road trucks stretched for as long as three years.

But plunging prices for oil and other commodities in recent months have put the brakes on miners' orders.

"They've all effectively cut their capital expenditures in half," said Eli Lustgarten, an analyst for Ohio-based Longbow Research. "What you're seeing now is a spate of deferrals and cancellations."

Lustgarten's firm on Friday cut its 2009 and 2010 earnings estimates for two other equipment makers dependent on mining sector sales: Bucyrus International Inc. (BUCY) and Joy Global Inc. (JOYG).

Longbow analyst Paul Bodnar lowered his earnings-per-share forecast for Bucyrus by 16% to $3.30 from $3.93 for 2009 and by 35% to $2.85 from $4.40 for 2010. He dropped his forecast for Joy Global's earnings by 17% to $3.23 from $3.90 for 2009 and by 30% to $3.10 from $4.40 for 2010.

The reductions followed industry surveys that showed contracting demand for machinery.

Equipment makers Komatsu Ltd. (6301.TO) and CNH Global NV (CNH) also have signaled major pullbacks in production for 2009.

In addition to the Decatur plant layoffs, Caterpillar said 500 workers will be furloughed at a plant that makes excavators and wheel loaders and 584 production workers will be laid off at a bulldozer assembly plant. Both of the plants are in Illinois.

The layoff are on top of the 20,000 job cuts Peoria, Ill.-based Caterpillar announced on Monday

Caterpillar said Friday more layoffs may be required as the year unfolds, depending on demand and other business conditions.

Caterpillar said earlier this week it's trying to work down about $1.5 billion worth of equipment inventory this year.

Caterpillar's stock was recently down 4.5% at $30.43.

-By Bob Tita, Dow Jones Newswires; 312-750-4129; robert.tita@dowjones.com

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