For Peoria, at least, globalization is paying off

Globalization is a dirty word anymore in much of America, what with the inevitable and ongoing wealth transfer from the haves (the developed world) to the have-nots (the developing world).

But it isn’t a one-way street, as Caterpillar Inc. showed on Thursday.

The Peoria, Ill.-based company said it would invest more than $1 billion in five Illinois plants by 2010 to boost manufacturing capacity for heavy machinery used in mining and infrastructure projects.

Cat’s sales have doubled since 2003, to $45 billion last year, amid booming foreign demand for its earthmovers, excavators and other machinery. In the first quarter nearly 60% of the company’s sales were to customers outside North America, including China and India. The dollar’s slide has been an obvious help by making Cat’s products relatively less expensive for many foreign buyers.

Cat’s CEO, Jim Owens, said the Illinois expansion "demonstrates our optimism about the global markets we serve."

Despite the stock market’s swings, buy-and-hold investors have been happy campers in Cat: Its shares have risen every year since 2003 and are up 11% this year. Cat on Wednesday raised its cash dividend 17%, to an annual rate of $1.68 a share. The stock rose $1.57 to $80.50 on Thursday.

Hate globalization? No question, it hasn’t been good for many U.S. workers. But it must be playing well in Peoria.

Photo: Caterpillar machinery for sale in Richmond, Vt. Toby Talbot/Associated Press