Bush tours Caterpillar plant

Bush tours Caterpillar plant

	Published : Tue, 30 Jan 2007 22:54 By : Agencies Print this Story

EAST PEORIA, Ill. (AFX) - President Bush climbed aboard a bulldozer and took it for a test drive Tuesday during a tour of Caterpillar Inc.'s East Peoria, Ill., plant before delivering a speech on the economy.

On the eve of his State of the Economy address Wednesday in New York, Bush praised Peoria-based Caterpillar as an example of how his administration's trade agreements and tax breaks can boost global sales and create jobs for U.S. workers.

During a speech to about 500 invited guests -- including Caterpillar officials, local dignitaries and workers -- Bush pushed his agenda of making tax cuts permanent and expanding free-trade agreements that he said will allow businesses to compete globally and boost U.S. jobs and wages.

'I'm confident in our ability to sell our products and services overseas, as long as the field is level,' Bush said.

Caterpillar Chairman and Chief Executive Jim Owens told Bush he deserved, 'much credit for the American and global economies enjoying the best three years of growth since World War II.'

But while some analysts give Bush policies some credit for helping the company, others say smart moves by Caterpillar management are really behind a global sales surge that helped the heavy equipment maker post record profits and revenues for three straight years, creating about 5,000 jobs at its U.S. plants in Illinois, Colorado, Pennsylvania and Tennessee.

Morningstar analyst John Kearney said the company simply took advantage of heightened worldwide demand for both construction and mining machines, using a strong dealer network and a respected brand name that make Caterpillar 'the 800-pound gorilla' among heavy-equipment makers.

'I'd probably give management more credit than the president,' Kearney said.

Fred Giertz, a University of Illinois economics professor, says Bush's trade policies deserve a little credit. He said the administration has avoided import restrictions that other countries might have mirrored, creating a tougher market for U.S. exports.

'Sometimes politicians get too much blame when things go bad and too much credit when things go good. Most of the credit goes to the people at Caterpillar. They created an environment where it's possible to compete on a world scene and do well,' Giertz said.

Caterpillar spokesman Timothy Elder says Bush's trade policies helped the company net about $9 billion in sales outside of North America in 2006, when revenues of about $41.5 billion netted profits that topped $3.5 billion -- both company records.

A free trade agreement with Chile has boosted exports by 25 percent to the South American nation, moving it up to No. 5 among Caterpillar's overseas markets, Elder said.

U.S. Rep. Ray LaHood, a Peoria Republican, said he lobbied Bush to visit Peoria since before the 2004 elections. Bush, last in Peoria during his 2000 presidential campaign, agreed last week, choosing Caterpillar as a backdrop for his message on the economy.

'Peoria is Caterpillar and Caterpillar is Peoria, and thank goodness for that. When Cat is going well our community is going well,' LaHood said of the Peoria region's largest employer, with about 17,500 local employees.

Mike Lawrence, director of the Paul Simon Public Policy Institute at Southern Illinois University, wondered whether Bush might be trying to duck debate over the Iraq war by plugging his economic programs.

Greg Baise, president and CEO of the Illinois Manufacturers Association, disagreed, calling Caterpillar the perfect stop ahead of Bush's economic address.

'Cat has had a very strong run the last few years. If there was a symbol of industrial might in America, I think they represent that as much as anyone,' Baise said.

Caterpillar shares rose $1.18 to close at $62.88 on the New York Stock Exchange.