FIRST AIRED: September 21, 2018

Nice work! Enjoy the show!


You’re busy. We get it.

Stay on top of the news with our Editor’s Picks newsletter.

US Edition
Intl. Edition
Unsubscribe at any time. One click, it’s gone.

Thanks for signing up!



>> This sprawling caterpillar factory in Clayton, North Carolina, laid off workers in 2016 and found other ways to cut costs due to plunging sales. Turns out the more the more than two year old strategy is one of the best ways the machinery giant is now protecting itself against US President Donald Trump's tariffs on aluminum and steel.
Reuters' correspondent Rajesh Singh visited the factory.>> CAT resorted to a lot of measures aimed at taking the structural cost out and improving its profitability. And those measures are coming in handy in the face of rising raw material cost following the metal tariffs that President Trump imposed and a tit for tat trade war with China.
>> Since 2016, the factory, which makes small wheel loaders, has employed one shift of workers instead of 2, operating just 4 days a week. It is also producing loaders with 20% fewer parts. The result, CAT is actually making more loaders here than it was before with 30% fewer people on the factory floor, therefore saving money.
And helping counter a rise in material cost of up to $200 million in the second half of 2018. Still, CAT shares are down about 10% since late January for the year, showing that Wall Street has yet to fully reward the company for its efficiency. Partly due to lingering concerns about its exposure to Trump's main target when it comes to international trade.
>> CAT has a big, sizeable presence in China, and more than half of their sales are in foreign markets.>> CAT's not the only industrial company resorting to cost controls. Others such as Deere and Harley-Davidson are also trying to keep a lid on expenses to cope with a 30% rise in US steel prices since January.