CAT Looks At Moving Manufacturing Back To U.S.

Caterpillar, Peoria, IL, said it will study whether it makes sense to move some of its heavy equipment manufacturing to the U.S. from Japan to free up capacity at its Japanese plants to meet growing demand in Asia, Market Watch reports.

Such a move would signal that Caterpillar sees demand for construction equipment picking up in the North American market as well. Caterpillar said it is looking specifically at building a new hydraulic excavator facility.

Caterpillar has production facilities in Belgium, Brazil, China, France, Indonesia, Russia and Japan, but its facility in Aurora, IL, is currently the only one making excavators domestically.

“Such a move could triple the current capacity of hydraulic excavators now produced by the company in the U.S. and significantly increase Caterpillar’s employment in the U.S.,” the company said in a statement.

The Wall Street Journal points to a larger trend of manufacturers moving production back to the U.S., which has come to be known as “onshoring” or “reshoring”. This is gaining momentum as a weak dollar makes it costlier to import products from overseas. Manufacturers are also counting on White House jobs incentives, as well as their ability to negotiate lower prices from U.S. suppliers who were hurt by the downturn and willing to bargain.