Caterpillar Chairman and CEO Doug Oberhelman called for U.S. policymakers to launch a strong infrastructure repair program to upgrade ports and domestic transportation networks.
He said its Illinois factories are producing about 80 to 90 percent of their heavy construction or mining vehicles and other products for the export markets. But “we worry about the port structure in the United States, and the basic transportation system as we try to get export goods out of this country or components into this country from our suppliers,” he said.
Although Caterpillar has plants in other states, it is based in Peoria, Ill., and has many of its key factories in that state. That includes “our most important mining plants, our big tractor plants, the backbone of our company (and) right now they’re all running on exports,” Oberhelman told CNBC.
The condition of the nation’s infrastructure makes it tougher to ship Caterpillar’s products from interior plants to seaports or bring supplies in, he said. “It’s every day harder and harder and harder, because we’re clogged, we’re antiquated, we’ve not invested in those” transportation systems.
However, he said competitors are investing in their transportation systems at a faster pace, making U.S. suppliers less competitive in delivering their goods to global markets.
The comments came as President Obama is telling Congress to send him a transportation bill to launch more infrastructure projects and put more people to work.
Oberhelman said transportation infrastructure investments always help during recessions by creating construction jobs in the short run, and pay for themselves within a few years through the extra commerce they generate.
Oberhelman also urged fast action in Washington to pass three pending bilateral free trade agreements with South Korea, Panama and Colombia, saying that could quickly help Caterpillar with some foreign customers.
“Our customers in Colombia right now incur a $300,000 tariff on our big trucks that go there. And guess who wants in there, badly? Our competitors from Japan and China. That’s the only competitors we have in that product line, are from those countries. We want to keep those jobs, and those are jobs right here in Illinois.”
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