CLAYTON, N.C. — The cost cutting strategy that Caterpillar Inc. implemented during a massive restructuring two years ago has extended benefits into the era of trade wars and retaliatory tariffs between the United States and China.
An article published by Reuters on Friday examined how changes made during the restructuring at a small wheel loader plant in North Carolina have resulted in unexpected advantages related to the 6-month-old tariffs levied on imported steel and aluminum.
Machines designed to use 20 percent fewer parts have allowed Caterpillar to meet increasing demand with a production workforce reduced by almost one-third — and use less of the raw materials now subject to tariffs.
“Fewer parts numbers are a huge win,” Vice President Tony Fassino, who oversees building construction products, told Reuters. “It improves safety, it improves the quality, it improves the cost.”
Caterpillar implemented the restructuring, which resulted in more than 16,000 jobs being eliminated from the company, in response to an unprecedented downturn that saw sales and revenue plunge by more than 40 percent from 2012 to 2016. Sales have since rebounded, and the company's employee population has recovered, as well.