Caterpillar announces cost cutting measures

* Says will also suspend merit pay increases for management and support

employees and has instituted a hiring freeze

* Says for 2009, executive compensation will decrease up to 50 percent

* Says offering management and support employees based in the United States an

incentive-based voluntary separation program

* Says compensation for senior managers will be reduced 5 to 35 percent

* Says certain CATERPILLAR (CAT.NY)business units have made work force reductions

* Says eligible employees have until January 12, 2009 to elect to take part in

the program

* Says will continue to implement cost reduction measures such as temporary

factory shut downs and involuntary employee separations, on an as-needed

basis

* Cites continued deterioration of conditions in many of markets its customers

serve and on-going economic uncertainty

* Says certain of its units made work force reductions through combination of

temporary, permanent layoffs