Headine from Manufacturing Executive: Caterpillar Reshores Japanese Production Back Home: Part Of A Trend?

Caterpillar said, “It was moving the production lines from Japan to reduce logistics costs, improve delivery times, and be able to respond faster to the customers who now use most of these products in the Americas and Europe.”

Welcome news indeed. It seems that the reshoring initiatives are picking up steam. I recently heard of other manufacturers that are bringing their jobs back to the USA. Apparently they all realize that it wasn’t all that good for them. Not too long ago one manufacturer’s rep and I discussed his company’s offshoring by telling me how the labor costs here were too high and the company that he represented had to produce in Asia where the labor costs were lower. This company is a B to C company and sells retail here in the U.S. Now that they have moved back here, their retail prices have actually LOWERED!

If this is indeed a trend, being the optimist that I am, I think that we will start seeing more companies returning to the U.S. I know the logistics of a return are difficult (a building has to be set up for production, machine tools have to be considered, etc.) but they are not insurmountable.


One Response to Headine from Manufacturing Executive: Caterpillar Reshores Japanese Production Back Home: Part Of A Trend?

  1. Kyle Reising says:

    I left Peoria 12/79 when 35K plus people worked at CAT. In 2002 I took a Strategic Mgmt class where CAT’s offshore decentralized business model was the new paradigm in organizational structure. The model was built on destroying the UAW in Peoria where there are now less than 10K union jobs. Perhaps the economic collapse of 2008 has provided a competitive wage structure in Peoria. I’m told the citizens of the area are pretty much anti-union these days. The question remains is it a good thing for CAT to come home again. It probably is for CAT. Central Illinois will be glad to see them return with jobs. The playing field of wages were leveled starting at the top, and the bottom will soon begin to catch up. What a difference a few decades makes in the perception of what is good.

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