'Belt and Road Is Made for Caterpillar,' Says Company President
Douglas R. Oberhelman, Chairman and CEO of Caterpillar Inc., extolled the benefits of President Xi's New Silk Road, for his company, in an interview on CCTV America Monday. "The Belt and Road [is] made for Caterpillar," he said. Pointing out that Caterpillar had participated in building the Three Gorges Dam, Oberhelman said that not only are Caterpillar heavy machines needed in construction all along the Belt and Road, but also other CAT products and services.
Caterpillar, headquartered in Peoria, Illinois, is the world's leading manufacturer of construction and mining equipment, as well as other lines, including farm machinery and diesel and gas engines, and diesel-electric locomotives. In recent years, sales have plunged—especially in the oil, gas, and resources sector, led by the collapse of the Transatlantic economy. Since December 2012, the company has had 39 consecutive months of decline in overall retail equipment sales. Last Fall, Caterpillar announced a two-year downsizing plan involving 20 plant closures and 10,000 lay-offs. So far, five plants are shut, and over 5,000 jobs eliminated.
However, spokesmen for the company are now stressing that there are vast new work and sales potentials for CAT in Eurasia. "Caterpillar Sees Opportunities for Growth in China's Five-Year Plan," was the headline on a March 14 Construction Equipment journal report on the view of Chen Qihua, chairman of Caterpillar China, from a Xinhua interview.
"Cat suffered double-digit losses in 2015 in part due to China's economic slowdown. But Chen says achieving China's goal of a better economy by 2020 will provide Caterpillar with more opportunities, especially in the Belt and Road Initiative, also known as the Silk Road Rebuild Project."
Meantime, the money-freaks on Wall Street—the megabanks and rating agencies—are debating how far to lower the prospects for CAT's 2016 share values.