PEORIA, Ill. — Caterpillar is the latest trucking industry supplier to take action in the face of deteriorating economic conditions.

The engine maker said it is slashing executive pay in 2009 and suspending bonuses for management. It has also implemented a hiring freeze.

Executive pay will decrease by as much as 50% in 2009, the company said in statement. Senior managers will receive pay cuts of 5-35% and other management and support staff may also receive pay cuts. Some employees will also be offered a “voluntary separation” arrangement.

“We understand these decisions will disrupt the lives of many of our employees and their families, and we regret the need to take these steps,” said Caterpillar chairman and CEO, Jim Owens. “We considered waiting until January to make this announcement, but decided it was better to communicate these plans with our employees as we approach the completion of our 2009 planning process. We also wanted to give employees interested in the voluntary separation plan time to consider this decision and discuss it with family over the holiday break.”

Cat is also temporarily shutting down some factories and laying off plant workers where required.