Caterpillar: Poster Child For The U.S. Manufacturing Renaissance: Record Order Backlog Of $30 Billion
Reuters – “It hasn’t been longsince Caterpillar Inc looked like the typical residentof the Rust Belt. Having misjudged how deep the U.S. economywould decline, the world’s largest maker of constructionmachinery reduced its workforce by 33,000 people worldwide in2009, closed plants and posted lower profits. But the Peoria, Illinois-based company has mounted a quickrecovery and is emerging as the poster child for America’smanufacturing renaissance.
In 24 months, 15 Caterpillar facilities have been built orupdated in the U.S., tens of thousands of workers havebeen added to the payroll and $2 billion is committed forcapital investments on its home soil this year.
“We haven’t seen Caterpillar doing this much building in theUnited States since probably the 1960s,” said Peter Holt, ownerof the Holt Caterpillar dealership in San Antonio. Caterpillaris building a $200 million plant two hours southeast of hisstore, in Victoria, Texas, that is slated to start churning outbadly needed excavators later this summer.
Underpinning Caterpillar’s U.S. momentum is a flood ofdemand by heavy equipment users in America – ranging fromconstruction companies to oil drillers to cement producers – whoare looking to replace aging machines now that the economy isimproving and credit is easier to obtain.
While the company has expanded quickly in emerging marketsand new sectors, including mining and railroads, much of itsconfidence hinges on its faith in a gradually improving U.S.economy.
“We came out of the recession much stronger and faster thanexpected,” Caterpillar Chief Executive Doug Oberhelman said in acompany report in March. “I’m not one for passing up sales, sowe really had to ramp up production quickly.” Key to this optimism is Caterpillar’s record order backlogof $30 billion, three times higher than it was in 2009. Somecustomers will not get trucks they have ordered until as late as2014.”