The World Needs Our Stuff

Globalization of business isn't going away. And how the U.S. reacts to the challenges a world economy offers will dictate how successful the country's manufacturers will be, according to Jim Waters, vice president of Caterpillar Production Systems at Caterpillar, Inc. Waters spoke to show attendees at the Keynote Address on the opening day of the FABTECH International and AWS Welding Show/Metalform trade show in Las Vegas.

"95 percent of the world's population lives outside of the U.S.," said Waters. "Looking inward means we're cutting ourselves off from that global market." These facts are nothing new. What makes the nation's current situation dangerous, says Waters, is the mantra he's been hearing about having the U.S. economy turn inward to protect jobs and industries. "I hear a lot of complaints about U.S. jobs being exported," Waters told the several hundred people in the audience. "But I think globalization and trade have been mischaracterized in the press."

He explained Caterpillar's longtime strategy of having to be in markets in order to compete in them. The company has 150 manufacturing sites in 40 countries, but Waters doesn't see the need to shift the manufacture of certain models from U.S. factories. "I don't see either presidential candidate tackling regulation on global growth," he stated. "It's not that past leadership was bad, it just wasn't enough."

Waters cited ways of how the lifting of trade barriers reduces unemployment rates. Since NAFTA, he explained, the GDP of all three countries involved has risen. Using a 2004 free trade agreement with Chile as an example, he illustrated that approximately 5,000 U.S. jobs were created in the process of having exports double to that country. He urged listeners to press their leaders for measured, but continued growth in global expansion and trade deals, citing that of his company's 48,000 U.S. jobs, 7 of 10 are dependent on exports.

As for the current credit crisis, he modestly claimed to be a welder from Iowa and not a numbers man. "What I do know," he continued, "is that when it's all over, there will still be people making stuff and people wanting stuff." Caterpillar has a strong bottom line, he added, and the company opts for creative minds, designs and products instead of creative financing.

The 30-year veteran of the $40+ billion company sees competition increasing. When Waters had to learn how to pronounce the names of his competitors, he saw that as a good thing: "We had to make changes in the way our people think and behave and how we lead as a company." It's been a tough journey, but he likened the country's current plight to that of the U.S. steel unions resisting a changing workforce. "It's only now that those industries are bouncing back," he remarked.

Actually visiting those countries that are poised for rapid development is an eye-opening experience, said Waters. "I know what I'm thinking when I go into a Chinese city of five million people that has no airport. Or when I see all those coal mines in that same country." When Caterpillar opened their first major Chinese manufacturing facility, the plant didn't need a parking lot. Ten years later they built one for their employees. That's economic progress that Waters sees as much more beneficial than sending food and care packages.

"The world needs our stuff," Waters said with passion. "Now is not the time to turn inward. It would suggest that we failed."

James D. Waters is the vice president of Caterpillar Inc., with responsibility for the Caterpillar Production System Division, established in December 2005 to transform Caterpillar manufacturing systems to set a "gold standard" for quality, safety and speed in industry. This article was originally published in the October 7 issue of The Official Show Daily at the FABTECH International and AWS Welding Show/Metalform trade show in the Las Vegas Convention Center, Las Vegas, NV.