From The Boston Globe:
Earlier Wednesday, trying to cast the plan in terms of real jobs, Obama announced that machinery giant Caterpillar Inc. plans to rehire some of its laid-off workers if Congress approves a sweeping stimulus bill.
That Obama statement came just one day before he was heading to Peoria, Ill., to visit the company’s workers and keep pushing his plan. The heavy-equipment maker has announced more than 20,000 job cuts as shrinking credit and construction demands hurt orders for tractors and other machines.
Said Obama: “Today, the chairman and CEO of Caterpillar said that if the American Recovery and Reinvestment Plan passes, his company would be able to rehire some of those employees.” He did not specify to whom the company chairman and CEO, Jim Owens, made such a pledge.
Caterpillar spokesman Jim Dugan said he had no comment on the president’s account of the company’s plans but did not dispute it either. He said the company did not want to discuss ahead of time what its chairman would say during the president’s visit, but that it looked forward to hosting Obama.
White House spokesman Robert Gibbs said Caterpillar “did communicate to the White House” that it plans to reevaluate its employment situation, particularly in Peoria and downstate Illinois, based on “a big investment that could be coming shortly to put Americans back to work.”
And more news from the CEO of Caterpillar, Jim Owens (ABC News):
“Yesterday, Jim, the head of Caterpillar, said that if Congress passes our plan, this company will be able to rehire some of the folks who were just laid off,” Obama said today in Peoria.
But when asked today if the stimulus could do that, Owens said, “I think, realistically, no. The honest reality is we’re probably going to have more layoffs before we start hiring again.”
Caterpillar announced last month that it will lose 20,000 jobs worldwide through layoffs and attrition, of which 15,000 had already occurred in 2008 or were in the process of happening. Caterpillar also reported that profits fell 32 percent in the fourth quarter of 2008 as a result of sharply declining sales.
Four days after that Jan. 26 layoff announcement, Caterpillar said it would let go of an additional 2,110 Illinois-based employees, including 584 at the Peoria plant. Caterpillar has lowered its profit expectations for 2009 as the global economic woes dampen the demand for heavy equipment. The company is betting on $40 billion in sales for this year, which would be a 22 percent drop from 2008.
Owens also cautioned that even if a stimulus is passed within the next month, the effects will not be immediate and are more likely to impact construction activity at the end of 2009 or spring 2010.
“As these projects kick in, one concern I have that we need to be mindful of, is that even if this stimulus package passes, not only here but around the world, it still takes a little time to bid the contracts and get the dirt work started,” said Owens, who serves on the president’s recently announced Economic Recovery Advisory Board and flew to Peoria aboard Air Force One.
It doesn’t really matter whether or not Owens told President Obama that he would rehire employees (and I have a hard time believing that the CEO of Caterpillar would make such a promise), what is important and unfortunate is that President Obama selling this stimulus as a “short-term solution” to the economic problems facing this country. By promising employees of Caterpillar that they would have a chance to be rehired soon after being layed off is misleading and portrays this stimulus as a “quick fix.” If the economic stimulus is to be at all successful in moving this country towards economic recovery, it must be understood that if any of this is to work, it will take years to materialize.
While some may say Obama is being dishonest about the comment itself, it is more important to note that this president is inappropriately branding the stimulus as something that it is not, most likely in order to quell potential criticism of the plan.
- Marc
Most states will be applying the monies received and applying it to road construction within months.
You know what most of CAT’s inventory is comprised of? Road construction vehicles.
Dots, connected.
Is most of CAT’s inventory comprised of road construction vehicles? I sincerely don’t know. I know they have some 400 products available on top of engines & electronic products. Their vehicles are used in construction, road-building, mining, forestry, energy, transportation and material-handling industries. But I honestly couldn’t find anywhere that said that most of CAT’s inventory is comprised of road construction vehicles.
If I were your professor, Jason, I would give you partial credit on your ‘Dots, connected’ comment. If the states do apply the bulk of the monies directly to road building projects they would still take a while to get through all of the red-tape involved in the design & bid process. If the monies are used to start back up existing projects, then the companies, for the most part, will already be equipped with the equipment necessary to complete the job.
Skipped dots, revealed!
Nigel, a nationwide boom in road construction is how CAT became the company they are, and their own statements regarding the layoffs cite a decrease in state construction for their shrinking sales.
One of the things I’ve liked best about Obama from the start is his ability to get people involved. It looks to me, given how little you’re actually quoting Obama there, that this story was made up around a non-story. Nowhere does Obama say that the stimulus plan will be an insta-fix. You’re trying to act like he did, and that’s more than misleading.
*yawn*
Misty,
Do you really need me to quote Obama on this issue? How many times has Obama used the word “catastrophe” to describe the economic crisis as a means to increase a speedy passage of the stimulus?
By Obama saying that passing the stimulus would invite previously layed-off employees back to the company is explicitly citing a short-term benefit of the stimulus… how can it be anything else?
And most importantly, as I brought up in my transparency post, by not allowing the five-day “sublight before signing,” Obama is effectively making the stimulus out to be an immediate remedy for the current crisis…
Have you not read or heard Obama’s words on the economic crisis and the stimulus plan? Not only is much of the rhetoric vague, but he has, more than once, made short-term promises. If the stimulus will accomplish short-term goals, then that is a strength that should be referenced. But if it won’t, then Obama is misleading the public.
Misty, I suspect that anything which challenges the epic Obama will be deemed a “non-story” by you. Obviously you haven’t heard Obama’s rhetoric about the stimulus, or you have purposefully disregarded it.