WCA May 2007

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From the Americas
29 Wire & Cable ASIA – May/June 2007
White House watch
The President shakes them up in Peoria
When US President George W Bush makes a factory visit,
very little is left to chance to ensure news coverage of an
event in which everyone – notably the President – gets on
and off safely.
Mr Bush’s 30th January tour of the production facilities at
Caterpillar Inc headquarters in Peoria, Illinois, was to be
such an occasion.
Caterpillar is the President’s kind of company. CAT,
as it likes to be called, is the world’s largest manufacturer
of construction and mining equipment, diesel and natural
gas engines, and industrial gas turbines. Caterpillar
chairman and CEO Jim Owens delivered a gracious
introduction.
“The US and global economy have benefited from the
President’s pro-growth tax and free trade policies, which
have stimulated strong economic growth,” Mr Owens said.
“I thank Team Caterpillar for representing the competitive
American spirit and positioning our company to take
advantage of the opportunity created.”
Mr Bush responded with some well received remarks in
which he called CAT ‘one of the great American companies’
and commended it for demonstrating that US firms can
successfully compete on the world stage.
Holly Bailey, who blogs for Newsweek, described a
sudden change of pace, commencing with the commander-
in-chief (‘wearing a pair of stylish safety glasses – at least
more stylish than most safety glasses’) springing behind
the wheel of a massive D-10 tractor and kicking off a game
of chicken with reporters:
“I would suggest moving back,” Mr Bush said as he climbed
into the cab. “I’m about to crank this sucker up.”
As the engine roared to life, White House staffers tried to
steer the press corps to safety. But when the tractor lurched
forward they, too, were forced to scramble.
“Get out of the way!” a news photographer yelled.
“I think he might run us over!” yelled another.
Watching the chaos below, Mr Bush looked out the
tractor’s window and laughed, steering the massive
machine into the spot where most of the press corps
had been positioned.
A press photograph shows Mr Bush grinning like a
pumpkin.
Messe Düsseldorf – highly experienced in the handling
and positioning of huge equipment at international
shows and exhibitions – might have a word of advice for
CAT management.
When visitors of uncertain temperament are expected,
make certain that all large machines are disconnected from
their energy source and/or drained of fuel.
The economy
American manufacturers
are losing ground
According to the Institute for Supply Management (Tempe,
Arizona) the US manufacturing sector contracted in January,
the last month for which information is available. Taking
many economists by surprise, ISM said on 1st February
that its manufacturing index registered 49.3 in the previous
month, reversing an expansion in December when the index
stood at 51.4. A reading above 50 indicates growth; below
50, contraction.
The data informing the national report is gathered from
companies in seven industries across the United States.
Until November the nation’s industrial sector had grown
for 41 consecutive months. But ISM economists said the
sluggish housing and automotive sectors, as well as high
energy prices, are holding back US manufacturers.
The survey found that production, order backlogs, and
inventories all contracted in January. As measured by the
ISM index, production dropped to 49.6 from 52.4; order
backlogs fell to 43.5 from 45; and inventories plummeted to
39.9 from 48.5.
New orders grew, but at a slower pace – registering 50.3,
down from 51.9. The price index increased to 53 from
December’s 47.5, clocking the rise in prices paid by
manufacturers for the materials of production.
Analysts had expectations of an overall reading of
51.5 for January. But Norbert J Ore, chairman of the
ISM Manufacturing Business Survey Committee, said
that ‘manufacturing lost momentum in the second half of
2006, and is starting 2007 in less than robust fashion.’
As the US slows, world economies
are expected to grow
A slowdown in the US economy will likely be a drag on
global growth this year, economists predict. But Asia and
Europe are expected to remain fairly resilient. Even as
a cooling US housing market weakens the appetite of
Americans for foreign-made goods, the swelling ranks
of middle-class consumers in China, India, and the rest of
emerging Asia will pick up the slack, the experts say.
Excerpts from the New Year forecasts:
International Monetary Fund (Washington, DC): “Global
growth as a whole is projected to slow a tad to 4.9%
this year from an estimated 5.1% [in 2006].”
UBS (Swiss investment bank): “While the world’s other major
economies will be affected by slower US growth, their own
domestic demand should continue to drive global growth.”
The Organisation for Economic Cooperation and
Development (Paris): OECD has trimmed its 2007 growth
forecast for its 30 mainly industrialised member countries
to 2.5% – the lowest rate since 2003 – from an earlier
estimate of 2.9%. It also sees lower growth rates for the
world’s richer, more mature economies.