Friday, November 11, 2011

Outsourcing Shifts Into Reverse: Caterpillar Brings Production Back from Japan = +1,000 New Jobs

Wall Street Journal -- "Caterpillar said it plans to shift production of small construction machinery from Japan to a new plant in North America that is expected to employ more than 1,000 people. The new plant, whose location wasn't identified, will become the company's global source for small bulldozers and mini-hydraulic excavators. It also will export partially assembled mini-excavators to Europe to improve delivery times for European customers. 

 "The markets for smaller track-type tractors and mini-excavators have evolved significantly in the past 30 years, with the majority of customers now located in North America and Europe," said Mary Bell, vice president for Caterpillar's Building Construction Products division. "Producing these machines at a North American location will put us in the best possible position to serve our customers in the building construction industry." 

Caterpillar also is moving assembly of its larger excavators from Akashi, Japan, to a new plant in Victoria, Texas, to free up production capacity for Asian markets where sales of Caterpillar equipment have been surging in recent years. The new Texas plant is expected to be completed by the middle of 2012.

Caterpillar's announcement of a new plant without naming a location will likely set off an intense competition between U.S. states hungry for manufacturing jobs. States interested in hosting plant can be expected to offer the company incentive-laden aid packages with tax breaks and government grants for training new employees.

Nearly all of Caterpillar's investments in new U.S. plants in recent years have been in the South, particularly Texas and North Carolina, where the company's Building Construction Products division is based. Caterpillar already builds compact construction machinery in Clayton and Sanford, N.C."

HT: Mike W.


At 11/11/2011 7:55 PM, Blogger Alessandro Machi said...

Maybe this should be called an inverse outsource because one caterpillar can replace a hundred men with shovels.

At 11/11/2011 8:44 PM, Blogger Ed R said...

Cat also just bought a small equipment maker in China -- presumably with its employees intact. I guess corporate capital is always moving around the world.

At 11/12/2011 3:05 AM, Blogger sethstorm said...

I'd like to hear of larger companies choosing places in the North over the South, instead of another "let's dump on the North" article, Mr. Perry.

Honda's factories in Ohio stand out like a sore thumb - as they are a transplant that produces in a worker-friendly state.

As for Caterpillar's move, Japan has a bit of a problem with having that radiation disaster. While it may not completely affect their factories, the disaster does affect their sales through PR.

At 11/12/2011 8:13 AM, Blogger J H Schumacher said...

Two weeks ago Whirlpool announced plans to lay off 5,000 in North America and Europe. 1,200 from a plant in Texas. Adobe announced plans to lay off 750 people yesterday. Weren't we suppose to get jobs from the information age? So we are still losing jobs.

At 11/12/2011 8:40 AM, Blogger Mark J. Perry said...

I don't it's an issue of North state vs. South state issue as much as it's a "right to work" state vs. "forced unionism" state issue, and the fact that most "right to work" states are in the South.

At 11/14/2011 3:14 PM, Blogger Marko said...

The left in Japan must be lamenting how manufacturing is leaving the country, and how they should require more unions, higher pay and longer vacations to solve the problem.


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