>Many major companies have made headlines in recent months and years as they shift their industrial operations away from the US. Caterpillar Inc. is just the latest. The company has announced plans to eliminate 230 jobs at a plant in Joliet, Ill., where workers went on strike in 2012 for over three months. The Peoria, Ill.-based maker of construction and mining machinery would move production of oil pumps and valves in the Joliet facility to one of its plants in Monterrey, Mexico.
The company cited a need “to remain cost competitive.” The transition is to be completed by mid-2018. Production of struts and hoists cylinder remain at the Joliet plant, Caterpillar claimed. Caterpillar is merely doing what many other companies claim they have been forced to do in order to stay in business. In 2004, Paul Craig Roberts and US Senator Charles Schumer published a jointly written article on the op-ed page of The New York Times entitled, “Second Thoughts On Free Trade“, which pointed out that US workers have to compete with individuals on a global, not national, scale.
American workers would face “direct global competition at almost every job level- from machinist to the software engineer to the Wall Street analyst. Any worker whose job does not require daily face-to-face interaction is in jeopardy of being replaced by a lower-paid equally skilled worker thousands of miles away. American jobs are being lost not to competition from foreign companies, but to multinational corporations that are cutting costs by shifting operations to low-wage countries.”
With Caterpillar’s recent move to Mexico, it seems Roberts and Schumer were correct. In the meantime, the Mexican economy looks strong. Bank representatives and even politicians in attendance at a recent banking convention in Acapulco expressed optimism in Mexico’s economic future, as well as its financial sector. Luis Robles Miaja, chief of the Mexican Banking Association which organized the convention, closed the meetings by stating that, despite challenges like low oil prices and talk of US monetary policy normalization, Mexico “has an opportunity to achieve dynamic and sustainable growth, as well as maintaining current levels of development. Mexican banks are going through their best moment in history and are prepared to do everything in their power to capitalize on this opportunity.”
“Recently 11 major structural reforms were approved that will have an unprecedented impact on the country’s economic and social development,” Robles Miaja said, referring to major changes in the energy, telecommunications and financial sector, among others, under President Enrique Peña Nieto, who was in attendance at the closing ceremony.