Caterpillar says it will shift some manufacturing from Japan to North America to bring production closer to customers in the Americas and Europe.
The $43 billion construction equipment manufacturer will build a plant to produce small track-type tractors and mini hydraulic excavators in North America. Those products are currently produced at a Sagami, Japan, factory that will focus on high-tech components.
The new plant’s location has not been determined. The manufacturer aims to cut logistics costs for itself and its customers, said Mary Bell, vice president of Caterpillar’s Building Construction Products division.
The new plant “will need to be (in) a location that meets our requirements of optimizing product availability, (while) minimizing logistics costs to our domestic and export customers,” Bell said in a statement.
Caterpillar is the latest company to consider or to actively shift Asian production back to North America, a trend some forecasters expect to accelerate. The Boston Consulting Group predicts manufacturing will shift from China to the U.S. and other parts of North America, creating up to 3 million jobs.
The decision to shift production from Japan to North America was based on the need to shorten the final segment of Caterpillar’s customer supply chains.
“The majority of customers (are) now located in North America and Europe,” said Bell. “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.”