Caterpillar ‘ready to pull out all the stops’ for tax reform

July 18--WASHINGTON, D.C. -- Caterpillar Inc. is "ready to pull out all the stops" on a grass-roots effort to support the Trump administration's push for tax reform, according to a company executive who met with the president Monday.

Kathryn Karol, Caterpillar's vice president of global government and corporate affairs, was part of a small contingent of Caterpillar representatives with a big yellow machine on the south lawn of the White House for the first Made in America Day -- a showcase of goods made in each of the 50 states.

As President Donald Trump and Vice President Mike Pence stopped by the Cat 966M wheel loader, the conversation turned to several aligned legislative and corporate policy priorities, including an overhaul of the nation's tax system and infrastructure spending. Trump said a grass-roots effort would be necessary to support tax reform that Caterpillar has long advocated, according to Karol.

"President Trump specifically asked for help on that," Karol said, noting that Caterpillar has just shy of 50,000 employees in about 70 facilities in the United States to help mobilize such a campaign.

She added: "We are 100 percent behind the reform and would hope that the administration and Congress could move this forward -- and quickly."

In comments at a proclamation signing event Monday, Trump reiterated the need for tax reform and referenced stalled health care legislation that has delayed action on it.

"(F)or our nation to really prosper, we must lower the tax on business -- one of the highest in the world -- and we must repeal job-killing Obamacare," Trump said, according to a press pool report.

Caterpillar has previously lobbied to lower the corporate tax rate to make it more competitive with global rivals, but also deployed a tax strategy that has been called into question by the IRS. Caterpillar is contesting $2 billion in fines and back taxes over replacement-part profits that shifted to a Swiss subsidiary nearly two decades ago.

The company also faces a federal criminal investigation related to the Swiss subsidiary and its export practices. The headquarters in Peoria and two other nearby facilities were raided in March, but no charges have been filed.

The company was the sole representative for Illinois at the White House event on Monday with a wheel loader currently manufactured in Aurora. That facility, however, will close by the end of 2018 under an agreement ratified by the United Auto Workers earlier this year. All production currently in Aurora will move to other Caterpillar facilities in the United States, including the Decatur plant.

In a prepared statement, Caterpillar CEO Jim Umpleby said the company would continue to work with the Trump administration on pro-growth policies.

"We appreciate the president's dedication to manufacturing industries and the men and women who build and deliver some of the finest products in the world. Caterpillar has a substantial presence across the country -- operations in 19 states, approximately 70 facilities, a workforce of 48,500, the tremendous strength of the independent Cat dealer network supporting customers in all 50 states and a supplier base of more than 15,000 companies," Umpleby said. "We welcome the opportunity to continue working with the Trump administration on policies that will increase economic growth."

Matt Buedel can be reached at 686-3154 or mbuedel@pjstar.com. Follow him on Twitter @JournoBuedel.

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