Exec says Houston plant adjusting to Cat culture

Posted March 28, 2012

By Michael Bradwell

When Jim Johnston drives by a construction site, one of the things he looks closely for these days is the amount of Caterpillar brand heavy equipment at work.

He doesn't have to look far, Johnston told members of the Washington County Chamber of Commerce Friday, since Caterpillar, or "Cat," is the world's largest heavy equipment maker and is rated either No. 1 or No. 2 for the product lines it sells, including diesel and gas engines, industrial gas turbines, construction equipment and mining equipment.

Johnston's remarks were made during a chamber "breakfast briefing" at the Hilton Garden Inn, Southpointe.

That last product line - mining equipment - is particularly important for Johnston, who is director of operations for Caterpillar Global Mining in Houston, which produces both room-and-pillar and longwall equipment for the domestic and international coal-mining industry.

The local plant, which also has responsibility for two other plants in Virginia and one in West Virginia - a total of about 700 employees - contributes underground machinery to Caterpillar's Milwaukee-based global mining division.

The operations here became part of the heavy equipment giant in July when it completed its $8.6 billion takeover of Bucyrus Inc., which also provided Cat with its line of surface mining equipment.

"We make products that most people don't see, but it's what Cat didn't have in its portfolio," said Johnston, who told the group that living up to the expectations of the company can be challenging, adding that there are also opportunities within those challenges.

There's no doubt that Cat values the customer base that the eastern operations bring to it. The local plant's output includes machinery for mining companies Consol Energy, Alpha Natural Resources, Arch Coal, Peabody Coal and Cliffs. Johnston said the five manufacturing operations produce equipment for about 500 eastern U.S. mines for between 50 and 60 customers.

"Wherever there's mining, we're there," he said.

But coming under the Cat banner also meant meeting the corporation's lofty goals for being the safest manufacturing company in the world as well as heightened expectations for being an active corporate citizen in the communities where the company has operations, Johnston said.

The demands aren't surprising, given Cat's size and stature around the world. With $60 billion in annual revenue, 162,000 employees, as well as another 132,000 people in its dealer network, the company supports customers in 180 countries. It was the top-performing company among Dow Industrial stocks in 2010 and is ranked 27th among Fortune 500 companies.

Johnston noted that a 2004 company-wide initiative to reduce workplace injuries to zero has resulted in a 74 percent improvement over the past seven years.

Johnston, who for the past 30 years has worked locally at many of the predecessor companies to DBT America that became part of Bucyrus and then Cat, said the Cat name is known to practically everyone.

"There's more brand recognition than in any of the other (predecessor) companies," he said, adding that some customers had trouble pronouncing the name Bucyrus.

One of the biggest challenges locally is finding qualified applicants for what is a growing operation, Johnston said.

"We didn't realize how hard that was going to be," he said.

One solution, he said, is directly across the street from Cat's Houston operations, at Chartiers-Houston High School, where the company has launched a program to interest students in its work.

"We're going to bring their classroms over to our facility," he said of a program that will include a work-to-school program, weekly internships and job shadowing.

During a question-and-answer session, John Smith, another Cat executive, acknowledged that the coal industry is currently going through a "soft" period of thermal coal demand created by one of the warmest winters of the past decade. Coal fires more than half of U.S. power plants that power electric home heat in the winter and air conditioners in summer.

"Until we see colder winters or a hot summer, we're going to see this," he said.

Copyright Observer Publishing Co.