Caterpillar’s US plant labor costs vs Canadian costs

An article in the Wall Street Journal (Jan 7, 2012) describes Caterpillar’s assertion tha labor costs in its US plants are 50% of the costs in Canada. Given the Canadian plant’s lack of global competitiveness due to labor rule inflexibility, Caterpillar plans to use its US plants as the alternative. With US wages having dropped 13 % while wages in Europe and Canada have risen, is US manufacturing the global low cost alternative ? Will cheaper shale gas costs, which will lower US energy costs, combined with lower US labor costs, bring manufacturing back to the US? Is this competitive position stable for the global supply chain or is it a temporary victory ?

About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues, Sustainability and tagged , , , , , , . Bookmark the permalink.

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