Caterpillar to Reshore Small Tractor, Excavator Manufacturing

Nov. 14, 2011
New North American plant will position production closer to demand

Caterpillar plans to build a new North American plant to produce small tractors and hydraulic excavators, and shift production of those products from Japan to serve markets here and in Europe. The company has not identified a budget for project, but it said the plant location will be determined by the end of this year and construction will begin in mid 2012. The new plant could employ over 1,000 workers, according to Caterpillar’s release.

"The markets for smaller track-type tractors and mini hydraulic excavators have evolved significantly in the past 30 years, with the majority of customers now located in North America and Europe," according to Mary Bell, the vice president of Caterpillar’s Building Construction Products division. "Producing these machines at a North American location will put us in the best possible position to serve our customers in the building construction industry."

The new plant operations will include large fabrications, painting, and final assembly. Also, it will have a distribution center for small, track-type tractors and mini hydraulic excavators produced at the new facility. At present, those machines are manufactured at Caterpillar's Sagami, Japan, operation. The Sagami plant will be converted into a high-tech component center for the Asia/Pacific market.

The new plant will be Caterpillar’s global production center for small track-type tractors, and it will produce mini hydraulic excavators for the North and South American markets. Caterpillar also plans to export partially assembled mini-excavator base units to a plant in Europe, where they will be assembled for buyers there.

Caterpillar first indicated the possibility of re-shoring its excavator manufacturing in March 2010, when it initiated a research study of demand trends in that product segment.

The company has been expanding rapidly over the past two years on the strength of rising demand for construction and mining equipment, notably in China. It has numerous plant construction and expansion projects in-line or in progress, including several in the Southeast U.S.

"As we go through these final stages of determining a location for this new state-of-the-art manufacturing complex, there are several important criteria," according to Bell. "It will need to be a location that meets our requirements of optimizing product availability, minimizing logistics costs to our domestic and export customers, and that better positions Caterpillar to meet its overall business goals."