Building an export culture

Caterpillar ensures each of its 40,900 U.S. employees aware that their livelihood and company’s brand depend on international trade    Understanding the importance of exports to Caterpillar’s bottom line doesn’t begin with management, as is the case with so many American companies.
   It actually starts with the shop floor employees who are tasked with assembling numerous parts into behemoth earth-moving equipment shipped to customers worldwide.
   “Since our founding, Caterpillar has been selling products to customers around the globe,” said Kathryn Karol, the company’s vice president of global government and corporate affairs. “To keep that long-term employee support for trade over 90 years isn’t an accident.
   “We make employee education a priority with on-going efforts and campaigns. While these efforts have evolved over time, it has resulted in knowledgeable and engaged employees that bolster our advocacy efforts in Washington, D.C. and around the world.”
   Headquartered in Illinois, Caterpillar has a global workforce of more than 100,000 and a dealer network that serves 190 countries. The United States has the largest concentration of Caterpillar factories and employees—about 40 facilities in 20 states and about 40,900 employees—in addition to thousands of jobs across its dealer network and supply chain.
   Caterpillar’s product line includes more than 300 machines, recognized for their yellow color and CAT logos. These machines are frequently found on job sites of the largest infrastructure projects and mining operations in the world.
   But without the ability to export these machines to other countries, Caterpillar wouldn’t be the size that it is today, a fact not lost on the company’s employees.
   “We have an ongoing educational newsletter on trade and its benefits, and we engage with our employees through email, texts and our internal website,” Karol said. “Recently, we produced multiple videos featuring our employees sharing how trade impacts their jobs—these videos were viewed thousands of times by their fellow Caterpillar employees.”
   At some of its facilities, Caterpillar machines working their way along the assembly line have a magnetic flag of the country of destination affixed to them.
   “It’s a strong proof point to the men and women building our machines that their jobs are dependent on Caterpillar’s ability to access markets around the world,” Karol said.
   “All of these efforts result in a robust grassroots operation” to ingrain the importance of exports across the Caterpillar operation, she said.

We make employee education a priority with on-going efforts and campaigns.

   For many years, Caterpillar has been on the forefront of promoting and embracing the benefits of free trade agreements.
   “When done correctly, trade agreements remove barriers to trade and help Caterpillar access new customers and markets,” Karol said. “U.S. investment overseas helps promote rule of law, improves economic development, reduces poverty and provides greater stability and infrastructure opportunities.
   “Investment in infrastructure is key to any country’s development and manufacturers like Caterpillar stand to benefit from it, but that starts with American policies to promote the export of goods and services to foreign markets,” she explained. “With this in mind, we are constantly engaging the U.S. government, and governments around the world, at all levels to urge their support of free trade agreements and a comprehensive WTO (World Trade Organization) agreement which continues to be a significant opportunity to open markets and increase worldwide economic growth.”
   Caterpillar promotes free trade agendas that benefit American companies by participating in coalitions of “like-minded” organizations, such as the U.S. Chamber of Commerce, National Association of Manufacturers, National Foreign Trade Council and Business Roundtable. In 2015, Caterpillar helped lead the business community in support of congressional passage of Trade Promotion Authority, securing that negotiating authority for the White House. The company has also been active in industry initiatives supporting the Trans-Pacific Partnership (TPP), and established U.S. free trade agreements with Panama, Colombia, South Korea, and Chile, as well as the Central America Free Trade Agreement and the North America Free Trade Agreement.
   “Through our relationships with the groups, we were successful in influencing various negotiations to include modernized language that levels the playing field and opens markets for Caterpillar products,” Karol said. “Although the U.S. did not ratify the TPP, we did pave the way for future FTAs to include modernized trade language that reflects the current global environment and refreshes outdated language on both exports and imports.
   “Despite the rhetoric during the 2016 election cycle, congressional leaders remain supportive of free trade and we will work with Congress and the administration to ensure the U.S. maintains its position as a world leader when it comes to rules-based trade,” she said.
   An active area on Capitol Hill for Caterpillar and other U.S. exporters at the moment is seeking the full restoration of operations for the U.S. Export-Import Bank. The bank provides financing in the form of loan guarantees, credit insurance and direct loans to buyers of U.S. exports, as well as working capital guarantees and credit insurance to mostly small and midsized U.S. exporters. In both cases, those bank products are attached to negotiated sales.

When an elected official gets waves of communications from the people they represent, it helps to move the needle in an important way.

   Despite the fact that Ex-Im Bank has long enjoyed bipartisan support on Capitol Hill since its inception in 1934, a small group of senior lawmakers have repeatedly thrown obstacles in the way of the bank’s operation during the past two and a half years.
   In mid-2015, these lawmakers successfully blocked Ex-Im Bank’s re-charter, shuttering its operations to American shippers seeking trade financing and insurance to broker export deals. Caterpillar joined with trade associations to press congressional lawmakers in early December 2015 to re-charter the bank through Sept. 30, 2019.
   However, the bank’s five-person board currently has two seats filled, but requires a minimum of three to have the necessary quorum to approve financing valued at more than $10 million. The failure to have three board members at the Ex-Im Bank has held up hundreds of millions of dollars in export deals. President Trump has indicated that he intends to restore Ex-Im Bank’s operations.
   Karol said Ex-Im Bank is “a critical tool for our customers that provides financing they can’t receive from conventional lenders” and Caterpillar continues to work with the Congress and administration to press for the bank’s return to “full operating status.”
   However, Karol doesn’t worry about being the lone voice of Caterpillar to influence change in Washington. She has an army of educated, motivated and engaged employees alongside her.
   “The daily efforts to provide [Caterpillar’s employees] information helps to enhance the discussion during public policy debates,” she said. “In recent years during the debates over the Export-Import Bank, Trade Promotion Authority, the Trans-Pacific Partnership and more, our employees sent tens of thousands of communications to policy makers.
   “Our internal system provides an easy way to do so online, but it’s the desire of our employees to speak clearly that makes it successful,” Karol said. “When an elected official gets waves of communications from the people they represent, it helps to move the needle in an important way.”