Manufacturing Issues

Peoria: Proudly Dependent
"I wanted to get out of Washington and sit down with folks that are really the backbone of this country. And I wanted to come to one of America’s great companies, and that’s Caterpillar.”

I was privileged to be among about 500 people who had the opportunity to see President Bush speak during his recent visit to the region. Two hours of waiting for the President’s arrival to the Caterpillar building in East Peoria permitted me some time for people-watching. As I scanned the huge facility, it struck me that virtually every key sector of the region’s economy was in the house: bankers, car dealers, real estate developers, entrepreneurs, farmers, insurance brokers, attorneys, healthcare managers, educators, investment counselors, retailers and of course, perhaps 200 or so manufacturers.

The shiny, yellow earthmovers were covered with Caterpillar production workers and presidents of various organizations surrounded the stage. Hundreds of in-the-trenches Caterpillar employees—from purchasing to public affairs—were also among the throng. Suppliers and distributors whose products are key components in those glistening D-10s were also present. That President Bush chose Caterpillar as the venue to tout his economic policies is testimony to the importance of manufacturing to the nation’s well-being. The President talked of how Caterpillar has benefited from free trade, noting that the machines which flanked the stage are literally sent all over the world (Caterpillar exported $10 billion from the U.S. in 2006, a record for the company).

Looking at the diversity of the attendees in the modern facility, it occurred to me how incredibly fortunate this region is to be home to a global manufacturing giant, and how manufacturing does indeed touch so many other segments of the economy. In my previous role with the Economic Development Council, it used to grate on my nerves when local and national media consistently suggested Peoria should be ashamed for being “too dependent” upon Caterpillar. Are we? Certainly less so than 25 years ago, but, I argue, we’re proudly dependent. The leadership at Caterpillar should also be proud for being chosen by the President as a symbol of the nation’s economic might.

After the uplifting visit, I returned to the office that day only to be reminded of the sobering reality that there are significant challenges ahead, particularly for the small and mid-sized manufacturers, the real backbone of the economy. From 2000-2005, the state of Illinois lost 181,400 manufacturing jobs. Who’s to blame? There are varying theories: offshoring to countries with low labor costs, consolidated supply chains, the high costs of doing business in the U.S. and unfair trade policies which have contributed to proliferation of cheap imports and the huge trade deficit.

The President’s visit is evidence that a healthy manufacturing sector is critical to our future. We need to continue to do what we can to ensure that all facets of the manufacturing economy have the tools to succeed. IBI