Just now got to this e-mail of a letter from two officials with Caterpillar up in Greenville about the "Buy American" provision in Nancy Pelosi's version of the stimulus. All of our pages through Monday are now done, so on the off chance that the letter might get outdated before we could run it, and since the subject has been on my mind, I'll go ahead and run their missive here:
Caterpillar is a proud American company. We were born in California, made our home in Illinois and maintained a strong U.S. manufacturing base that serves the global marketplace. Caterpillar laid roots in the Greenville area in 1994, beginning with the Greenville Engine Center (GEC). Our operations now include the GEC, Caterpillar Logistics Services, Inc., and the Marine Center of Excellence. We are also proud of our global footprint that allows us to compete and support Cat equipment throughout the world. Today more than half of what we produce in the U.S. is exported to markets outside the United States.
We are also a company that will benefit from the infrastructure component of the proposed $825 billion U.S. stimulus package. But there is one element of the stimulus proposal that greatly concerns us — it's the “Buy American” provisions. Why would an American company be against a provision that forces the U.S. government to only buy American products? Our reasons go beyond our confidence that we can compete and win business because of the value of the products we produce.
Today, countries from Asia to Europe are pursuing similar infrastructure packages to stimulate their economies. In some cases, like China, these proposed projects are more ambitious than those in the United States.
This is our concern. Caterpillar would like to sell U.S.-made products to infrastructure projects at home and abroad. But if the U.S. sends the message that regardless of value, countries should only buy locally produced products, Caterpillar's exports, as well as the U.S. jobs they support, will be hurt. In some of our Illinois factories, as much as 70 percent of what we make is sold overseas. Over half of the engines produced in Greenville are for export use including those most recently “in-sourced” from our European factories. That’s not surprising given that 95 percent of the world’s consumers live outside our borders, and most infrastructure growth is occurring in the developing world.
It's hard to be against something that sounds as patriotic as "Buying American." But turning inward and embracing protectionism is what turned a bad recession in the 1930s into the Great Depression. Let’s show some political courage and learn lessons from the past. Our country doesn’t need to isolate itself from the international economy. Rather, we need policies that will help us improve competitiveness and grow. For starters we need a "National Export Strategy” that keeps U.S.-made goods in demand globally, U.S.-based companies competitive and U.S. workers employed—including tens of thousands of Caterpillar and supplier employees. The approval of these “provisions”, as they are written, could have a devastating impact on the operations of the Greenville Engine Center, Cat Logistics and the Marine Center of Excellence, as well as the lives of our employees and their families.
Large Power Systems Division
Caterpillar Logistics Services, Inc.