Doug Oberhelman, The CEO of Caterpillar and chairman of the National Association of Manufacturers, recently spoke at Georgia State University’s World Affairs Council of Atlanta. Oberhelman tells us that high taxes, over regulation and poor infrastructure are all hurting America’s competitive ability. But what really gets Mr. Oberhelman’s goat is entitlement spending. “I worry an awful lot about that.”
Oberhelman’s pay? Oddly enough, during his conference call he didn’t discuss his own salary, perhaps thinking that it was in poor taste. One could see why. In 2010, his total compensation was $10.6 million. This was increased to $16.9 million in 2011, and again to $22.4 million in 2012, making for a roughly 111% increase.
Oberhelman’s concern over high corporate taxes, this is completely understandable, considering the fact that in 2010, GE had profits of $14.2 billion and yet paid no US taxes (it actually claimed a tax benefit of $3.2 billion). Moreover, between 2002 and 2011, GE had an average Federal tax rate of 1.8%.
Oberhelman also complains about burdensome regulations. This is rich, coming from the CEO of a company that has a subsidiary that is currently under investigation by Federal prosecutors in California for environmental violations and other “alleged improper business practices.” Previously, in 2011, Caterpillar agreed to a $2.55 million settlement with the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice (DOJ) over alleged Clean Air Act violations (the company was accused of shipping over 590,000 diesel engines without proper emissions controls and failing to comply with reporting and engine-labeling requirements). In another case, the Occupational Safety and Health Administration (OSHA) cited Caterpillar for safety violations (also in 2011), proposing a fine of $66,000. The company has also been accused of being complicit in human rights violations for providing the Israeli army with bulldozers, knowing full well that they would be used in the demolition of Palestinian homes. In 2003, American peace activist Rachel Corrie was killed by a Caterpillar D-9 military bulldozer. Her family sued the company in 2005.
Oberhelman laments the fact that other countries are making much needed investments in ports and transportation infrastructure, like roads and railroads. Unfortunately, Mr. Oberhelman doesn’t “square the circle” by explaining how we are supposed to lower America’s insufferably high average effective Federal corporate tax rate of 12.6%, while at the same time increasing spending on infrastructure (which, one must imagine, is not considered entitlement spending in Mr. Oberhelman’s world).
Oberhelman’s sour mood is completely understandable. His company recently announced a 44% drop in third-quarter earnings, mostly due to poor sales in the mining sector. In a conference call with analysts, he said that his company is on a “a cost-lockdown binge.” To turn the situation around, thousands of management employees have been temporarily laid off, with “structural” reductions in costs being sought. This has involved a 9% cut in global head count (compared to last year) and asking some workers to accept salary freezes and a reduction in their benefits.
Earlier in the day, before giving his speech at Georgia State, Mr. Oberhelman attended a ribbon-cutting ceremony at Caterpillar’s new plant near Athens, Georgia. It is believed that the facility will eventually employ 1,400 people directly and another 2,800 indirectly through nearby suppliers. Hopefully, this will offset the job losses created by the half dozen plants that Caterpillar announced this year that it will be closing. And just what made Georgia the lucky recipient of Caterpillar’s new plant? Mr. Oberhelman tells us that it was Georgia’s better taxes, worker training programs and infrastructure that sealed the deal. It also might have been the fact that Georgia provided about $75 million in state and local incentives, including tax breaks, improvements to infrastructure and property. It’s good to know that the millions being given to a multi-billion dollar corporation by state and local governments is not entitlement spending, but rather a good old fashioned honest investment.
From here
Oberhelman’s pay? Oddly enough, during his conference call he didn’t discuss his own salary, perhaps thinking that it was in poor taste. One could see why. In 2010, his total compensation was $10.6 million. This was increased to $16.9 million in 2011, and again to $22.4 million in 2012, making for a roughly 111% increase.
Oberhelman’s concern over high corporate taxes, this is completely understandable, considering the fact that in 2010, GE had profits of $14.2 billion and yet paid no US taxes (it actually claimed a tax benefit of $3.2 billion). Moreover, between 2002 and 2011, GE had an average Federal tax rate of 1.8%.
Oberhelman also complains about burdensome regulations. This is rich, coming from the CEO of a company that has a subsidiary that is currently under investigation by Federal prosecutors in California for environmental violations and other “alleged improper business practices.” Previously, in 2011, Caterpillar agreed to a $2.55 million settlement with the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice (DOJ) over alleged Clean Air Act violations (the company was accused of shipping over 590,000 diesel engines without proper emissions controls and failing to comply with reporting and engine-labeling requirements). In another case, the Occupational Safety and Health Administration (OSHA) cited Caterpillar for safety violations (also in 2011), proposing a fine of $66,000. The company has also been accused of being complicit in human rights violations for providing the Israeli army with bulldozers, knowing full well that they would be used in the demolition of Palestinian homes. In 2003, American peace activist Rachel Corrie was killed by a Caterpillar D-9 military bulldozer. Her family sued the company in 2005.
Oberhelman laments the fact that other countries are making much needed investments in ports and transportation infrastructure, like roads and railroads. Unfortunately, Mr. Oberhelman doesn’t “square the circle” by explaining how we are supposed to lower America’s insufferably high average effective Federal corporate tax rate of 12.6%, while at the same time increasing spending on infrastructure (which, one must imagine, is not considered entitlement spending in Mr. Oberhelman’s world).
Oberhelman’s sour mood is completely understandable. His company recently announced a 44% drop in third-quarter earnings, mostly due to poor sales in the mining sector. In a conference call with analysts, he said that his company is on a “a cost-lockdown binge.” To turn the situation around, thousands of management employees have been temporarily laid off, with “structural” reductions in costs being sought. This has involved a 9% cut in global head count (compared to last year) and asking some workers to accept salary freezes and a reduction in their benefits.
Earlier in the day, before giving his speech at Georgia State, Mr. Oberhelman attended a ribbon-cutting ceremony at Caterpillar’s new plant near Athens, Georgia. It is believed that the facility will eventually employ 1,400 people directly and another 2,800 indirectly through nearby suppliers. Hopefully, this will offset the job losses created by the half dozen plants that Caterpillar announced this year that it will be closing. And just what made Georgia the lucky recipient of Caterpillar’s new plant? Mr. Oberhelman tells us that it was Georgia’s better taxes, worker training programs and infrastructure that sealed the deal. It also might have been the fact that Georgia provided about $75 million in state and local incentives, including tax breaks, improvements to infrastructure and property. It’s good to know that the millions being given to a multi-billion dollar corporation by state and local governments is not entitlement spending, but rather a good old fashioned honest investment.
From here
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