Dive Brief:
- Heavy equipment giant Caterpillar said it is ready to do business in Cuba as soon as Congress lifts the U.S. trade embargo, Reuters reported.
- At an event honoring a Caterpillar contribution to the Ernest Hemingway Museum in Havana, Caterpillar CEO Doug Oberhelman said that if trade between the two countries opens up, the company will support a dealer facility in Cuba, which will be supplied out of its Brazil operations.
- Caterpillar officials said that revitalization and modernization of the island's Mariel Harbor, in which the equipment company would participate, could set Cuba up as the distribution center for the Caribbean as well as Central and South America.
Dive Insight:
The U.S. and Cuba reestablished diplomatic relations in 2014, but the Republican-controlled Congress hasn’t yet budged on lifting the trade embargo.
Caterpillar hopes the opportunity to expand into Cuba would help boost its earnings, which recently forecast 2016 revenue to come in 38% lower than its 2012 peak of $66 billion, largely driven by the dip in international demand for its products.
Caterpillar announced earlier this month that it would close five plants and eliminate 820 positions in the U.S. as part of the $1.5 billion cost-savings plan it revealed in September. Caterpillar said it decided to downsize after years of lower-than-expected earnings amid falling equipment demand. The company's strategy includes eliminating as many as 10,000 jobs and shutting down 20 facilities by 2018.
The lifting of the trade embargo would likely be good news for U.S. contractors, especially those in Florida. Experts have said that south Florida will become the hub for the coming boom of tourism to and from the island, which could call for more building in the state. U.S. contractors are also likely to be called on to work in Cuba — building homes, tourism facilities and new infrastructure.
