From Jobmouse, news that Caterpillar is moving 4,700 jobs to the United States. But don’t get too happy:
- Eliminated 450 Canadian union jobs by permanently closing its plant in London, Ontario and moving those jobs to its plant in Muncie, Indiana. The Company cited high employee related costs. Employees at the Canadian plant were paid $35/hr on average compared to $12 to $18/hr at the US Plant.
- A $20 million expansion of its Sumter, South Carolina manufacturing facility, which includes adding 170,000 square feet, to it’s 105,000 square feet premises. When the expansion is fully operational and at full capacity, it is anticipated Caterpillar will add more than 80 jobs over a two-year period.
- A $200 million facility in Athens, Georgia, that will build small tracktype tractors and mini hydraulic excavators. The state-of-the-art, one-million-square-footfacility is expected to directly employ 1,400 people and create an additional 2,800 indirect jobs for a total of 4,200 new jobs.
Indiana, South Carolina and Georgia are states that do not have a strong union presence and have governments that are focused on encouraging companies to move operations there to boost employment and state revenue. Lower regulatory costs and taxes are two of the primary ways they are accomplishing this. These factors combine to boost profitability and motivate companies like Caterpillar to add operations to these parts of the country.
This blog is ECLECTIC. Mostly, I write about politics and media. Sometimes, I post a funny cartoon. Sometimes I post pictures of pretty girls. I am baffled as to why people who visit this blog regularly complain about this.
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Melissa Harris of the Chicago Tribune recently conducted an interview with Doug Oberhelman. http://www.chicagotribune.com/business/ct-biz-0316-confidential-oberhelman-web-version-20120316,0,6458064.column?page=1
I wish the local “business journalists” would ask the pointed questions like Ms. Harris instead of being sycophantic stenographers. Doug Oberhelman hit just about every talking point from the Club for Growth about Illinois being hostile to business. Forget that if Illinois’ economy would be ranked #14 in the world if it were a foreign country or that Illinois has the fourth largest economy in the U.S. trailing CA, TX, and FL with their larger populations.
Here is another article about how another country conducts its business, profitably. http://www.forbes.com/sites/frederickallen/2011/12/21/germany-builds-twice-as-many-cars-as-the-u-s-while-paying-its-auto-workers-twice-as-much/
Great! I love watching my Cat stocks go up… up… up. No, I don’t work for Cat. I’m just smart enough to invest in a well-run company that does what any good business should do: make money.
BrianG wrote: Doug Oberhelman hit just about every talking point from the Club for Growth about Illinois being hostile to business.
Which means both Oberhelman and Club for Growth are correct.
BrianG wrote: Forget that if Illinois’ economy would be ranked #14 in the world if it were a foreign country or that Illinois has the fourth largest economy in the U.S. trailing CA, TX, and FL with their larger populations.
Since Caterpillar only recently announced $840 million to modernize, expand capacity and create additional 300 jobs at Decatur and East Peoria plants (and $1 billion in mid-2008), it isn’t like they aren’t investing in the state. But the state’s budget situation is out of control, and only recently has Gov. Quinn proposed some real spending cuts, so IMHO, brand new manufacturing facilities are unlikely in the near future.
Next to watch: EMD’s LaGrange, IL facility. Do a Google search and you’ll know what I mean.
If Illinois is so hostile, Oberhelman should NOT invest another dime in the State. If he does, he is adbicating his role to his shareholders. Make no mistake about it, He is exploiting federalism to his company’s benefit. Not to mention that in each state CAT builds a plant in a plant he creates an interest for two Senators and maybe multiple congressmen also.
If Illinois’ business climate were so bad, Georgia’s economy should be larger, but it’s not. Then again Georgia gets more money back from the federal government than it pays whereas Illinois receives only .75 from each dollar. The South has been undercutting Northern wages since after the Civil War and still isn’t as wealthy as the northern states.
I am glad that Caterpillar is investing in Illinois rather than possibly compromising manufacturing processes in China. I hope that Caterpillar will pay the 2.2 billion dollars in Federal taxes for the parts it claimed it sold from Switzerland instead of Illinois.
If Illinois is so hostile, Oberhelman should NOT invest another dime in the State.If he does, he is adbicating his role to his shareholders.
Not for a completely new facility or unless the climate changes he shouldn’t, but the company needs more capacity now, so the strategy has been to move some work out of state to make room for expanded production of other products. Case in point: mining truck production at Decatur was expanded after motor grader [most] and truck axle work was moved to dedicated plants in N. Little Rock and Winston-Salem, respectively. Likewise, moving excavator production from Aurora to Victoria, Texas will allow room for more wheel loader and dozer production.
Make no mistake about it, He is exploiting federalism to his company’s benefit. Not to mention that in each state CAT builds a plant in a plant he creates an interest for two Senators and maybe multiple congressmen also.
And Caterpillar’s investments are a huge benefit to the nation.
If Illinois’ business climate were so bad, Georgia’s economy should be larger, but it’s not.
Nonsense. Population is a huge factor and so is industrialization. Illinois took an early role in this while Georgia did not become heavily industrialized until after WW2. Recent history offers a better comparison. Illinois experienced anemic 3.3% population growth between 2000-2010 (about 400K) while Georgia had 18.3%, or 1.5 million news residents. The Peachtree State is catching up.
The South has been undercutting Northern wages since after the Civil War and still isn’t as wealthy as the northern states.
Cost of living is lower in the South. If wages were not enough to support oneself, let alone a family, population would not be booming.
I hope that Caterpillar will pay the 2.2 billion dollars in Federal taxes for the parts it claimed it sold from Switzerland instead of Illinois.
Whatever.
I love right-to-work states! Closed shops are history. My workplace has voted the union down 4 times so far – even though I wouldn’t have been required to join. Except for certain circumstances, unions, in the traditional sense, have outlived most of their usefulness. I will never be a member.