Caterpillar Ceo Says North Little Rock Expansion ‘on Our Radar’

Caterpillar Chairman and CEO Doug Oberhelman addressed Arkansas economic developers in Little Rock today, laying out a cautiously optimistic assessment of the economy and touting his firm’s North Little Rock motor grader operations.

Speaking to the Arkansas Economic Development Foundation, a non-profit group that raises money for private economic recruiting, Oberhelman said he was "pretty optimistic" about the next year for business.  The Peoria, Illinois-based heavy equipment manufacturer just posted third quarter profits of $1.14 billion on revenue of $15.72 billion — an all-time record quarter for both revenues and profit factoring out one-time charges.

"We’ve seen the U.S. recover in our industry. We see some growth, although slow growth, for next year," he said. "The world is still growing."

While many business leaders cite "uncertainty" as a root cause for economic paralysis, Oberhelman said his company has been able to overcome that obstacle.

"The uncertainty, I think, the uneasiness we all feel is that we think the world is going to go off the end like it did in ’08," he said. "We’re all still numb and raw from that ’08 experience. We see the uncertainty, I don’t want to disregard that whatsoever, but our business is strong because of the markets we’re in."

Oberhelman laid out a wish list for improving the U.S. economy, including a national highway bill to create jobs and remain competitive with infrastructure development. He also called for corporate tax reform with lower rates and reduced deductions.

The recently signed U.S. free trade agreements with Columbia, Panama and South Korea will help boost business for Caterpillar and its North Little Rock operations, Oberhelman said. The North Little Rock plant exports about 45% of its motor graders, while nearly two-thirds of Caterpillar sales are overseas.

Currently, Caterpillar has about 900 workers in Arkansas with plans to hire more as part of a previously discussed schedule of expansion when it announced its plant location in January 2009. The North Little Rock facility is not running at full capacity yet, but Oberhelman said the need for more production worldwide was imminent.

Could North Little Rock benefit from an additional Caterpillar investment? Oberhelman said  the city is "on our radar screen," but he was tight-lipped on a commitment beyond that statement.

"The demand for motor graders that we make here is growing and that bodes well for our plant in North Little Rock," Oberhelman told Talk Business after his speech. "When we do siting — wherever we are in the world — it’s: ‘Is there a workforce?’ ‘Is there a management team that can lead?’ All the basics that you do when you site a plant."