February 2017 issue: Fluid Power drives mega dozer + more

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In this issue:

74 Fluid Power drives mega dozer

82 Keeping your mobile machine running efficiently

88 Staying dry with cool air

94 How do you remove water from hydraulic fluid?


 

Caterpillar’s trucking it out of Peoria … what does it mean?

By Paul Heney

 
If you were sick of the political back and forth and totally divested yourself from TV and the Internet last week, you might have missed the news that Caterpillar, the Peoria, Ill. behemoth, is moving its headquarters to Chicago, a few hours by car (and a good bit longer by construction truck, I assume) up the highway.

Paul Heney

Caterpillar is what many people think of first when they hear “mobile hydraulics,” and with good reason. The company, with reported revenues of $38 billion last year and nearly 100,000 employees across the world, is an icon, with its machinery easily visible on construction projects, in mines, and along highways—not to mention a leader in hydraulic development and research.

But Caterpillar, too, has been synonymous with Peoria, a Midwestern town known for … well, its typical-ness. Groucho Marx popularly asked “Will it play in Peoria?” and rock stars, politicians and corporations have long used the city as a testing ground of sorts before expanding their reach to both coasts.

So why leave? Executives have expressed a desire to be closer to a world-class airport, which Chicago certainly has in O’Hare. And like Boeing’s move from Seattle to Chicago, there’s probably more than a little bit of a panache that a Chicago or New York or San Francisco address has—that an Omaha or Cincinnati or Rochester doesn’t. Chicago, too, surely has a lot more to offer potential new executive recruits, for when Caterpillar is looking to hire in its upper ranks. And that’s primarily what Chicago will be to the company. Headquarters will merely be the topmost executives and their direct support staff. The company says as many as 300 employees will eventually end up in the Windy City. Luckily for Peoria, the vast number of the company’s jobs currently located there are expected to remain put.

Years ago, a very large company I was covering hired a new CEO from a distant state. Not long afterward, the company announced that it was moving the entirety of its headquarter operations to that same state. What an odd coincidence! While this Caterpillar announcement doesn’t leave that sort of taste in my mouth, I do wonder what it means for so many other mid-sized and large manufacturers headquartered in the Toledos of the world. Will they all eventually forced to relocate to the biggest of the big cities in order to remain competitive? Or is this nothing more than the latest business fad?

I’d love to hear your thoughts.

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Comments

  1. Bill Nurnberger says:

    You’d have to believe that upper management could do a better job if they were actually located at the main facility they were supposed to be managing. You’d also have to believe you’d have a better chance of having the kind of upper management that was best for the company if they were the kind of folks who actually wanted to be near the facility they were supposed to be managing – who were interested in the business rather than the trappings of ‘management’ or ‘power’ – folks who were more interested in the nuts and bolts of the business than their own status or ‘convenient access to a world class airport’. Location in a place like Peoria rather than Chicago might actually serve as a useful filter for hiring the right kind of upper management – the kind interested in the job rather than their personal status. I notice, for example, that the ‘Oracle of Omaha’ doesn’t seem particularly inclined to leave Omaha.

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