Caterpillar CEO: Higher taxes do not stimulate anything

Doug Oberhelman responds to Obama jobs plan

This is a rush transcript from "Your World," January 26, 2012. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST OF "YOUR WORLD": Now to Las Vegas, the president today pushing for more manufacturing jobs. But will his planned tax hikes on the rich have just the opposite effect? To a guy who knows what it takes to create jobs.

We have got Doug Oberhelman right now, the chairman and CEO of Caterpillar, the big heavy equipment-maker seeing its profits surge 60 percent in the latest quarter, blowing past estimates. The company’s full- time work force growing by 20 percent from a year ago.

Doug, not too shabby. Congratulations. Welcome.

DOUGLAS OBERHELMAN, CEO, CATERPILLAR: Yes. Yes. Thank you. We are pretty proud of it here in Peoria, that is for sure.

(CROSSTALK)

CAVUTO: All right, sorry to jump on you there, Doug.

Now what to keep this going? Anything that you have heard out of Washington, from either party, more to the point the president’s proposal of hiking taxes on the rich, trouble you?

OBERHELMAN: Well, sure it does.

I don’t think you stimulate anything by higher taxes, particularly in the case of manufacturing. We need help. We have got an opportunity in the world today to go after seven billion consumers in the world, 95 percent of whom are outside the country. We need all the help we can get to compete.

We have never seen more competitors that want our jobs in this country. They want to create manufacturing jobs in all of their countries, and go after the same customers we have. We need to really be competitive in the United States. We can be, but we need help and concentration to really get after manufacturing.

CAVUTO: You talk about being competitive. Then, if the president gets his way, he would take away tax breaks for companies, maybe like yours, that hire workers abroad, but he would give incentives and the like, breaks and the like, for those who hire here. What do you think of that?

OBERHELMAN: Well, I think it sounds OK.

But think about this. Caterpillar exported $20 billion of goods in 2011, all by American hands and American workers, to all over the world. In order to do that, we have to create jobs in all those countries that we export to, to be able to sell there.

Why is Caterpillar bad if we create a new job in India or China to receive U.S. exports? It makes no sense to me. We want to drive all the exports we can from the United States. We want to concentrate on all those consumers, outside contractors, customers outside the United States that we possibly can.

We are going to need to create jobs over there and able -- to be able to do that. I just don’t understand this whole argument that if you create a job outside the U.S., you are a bad person or a bad company. I think it is great. We need to grow. And we need those manufacturing jobs desperately and those external markets.

CAVUTO: You know what kind of worried me when we were covering the speech when we were in Washington, too, Doug, is the simplistic kind of responses to, for example, Mitt Romney and his 14 percent or 15 percent tax rate, forgetting the fact he paid taxes on that money before, and that this low rate allows individuals and companies and strategists and investors to go ahead and take risks on maybe the next Caterpillar or maybe the next Apple, won’t have you.

And, ironically, in that audience, Steve Jobs’ widow sitting in the president’s box. I guess that’s what concerns me, that, obviously, companies that have standing abroad, companies like yours that have people abroad, they are taking advantage of a global economy that is making them stronger here at home. But either we are too ignorant to see that, and then to add insult to injury, we penalize them for doing that.

It’s like -- no offense to the Keystone pipeline, but it is like the Keystone Cops running the asylum, you know?

OBERHELMAN: Well, it is political season and we can expect a lot of that. But when it gets right down to it, we have to be competitive. Caterpillar has to be competitive. The United States has to be competitive. Every single one of our employees have to be competitive, because there is someone else out in the world that wants our job and wants our customers.

And we can’t go back on being a global company or being a global economy. It should be a great thing for the United States. Seven billion or 6.5 billion consumers, potential customers that don’t live in this country, we ought to be able to get them. We ought to talk about growing the pie, reform taxes, corporate and individual rates, and watch the tax revenues grow.

It happens every time. That is what we ought to be talking about and make our system a lot more simple, a lot easier to use and a lot more business-friendly, in my opinion.

CAVUTO: We will be getting to this later in the show, Doug, Bill Gates the latest now -- that is not the defense secretary, but the software billionaire -- the latest to say the rich should pay more, that they have an obligation to do so, paraphrasing here. But what do you make of that?

OBERHELMAN: Well, I think that’s right. I don’t have any problem with that.

But in the next sentence, don’t we have a commitment to reform our government? We have not -- we have seen three years of government spending with more spending every single year, 50 percent of which is borrowed. I would gladly pay more and I am sure everyone would if they thought it was going to reduce the deficit and make our country stronger and more competitive.

But we only hear -- seem to hear half of that, that we have got to raise more taxes. That is not going to stimulate anything. We also have to reform government. That will help. It’s all in the same pot.

Our whole is so deep, Neil, in this country, the debt is so large, it will take all the pieces to make work. Tax reform is a big piece of that. But so is government reform and government spending and we never seem to hear about that, at least in a debate where things actually happen.

CAVUTO: We also never seem to hear in the mainstream media that CEOs are I guess people, too. We forget that. You are a human being.

(LAUGHTER)

CAVUTO: So -- last time we checked -- so, I guess I will ask you a Barbara Walters-type question.

How do you feel -- no offense to Barbara Walters -- how do you feel about the broadsides against business types, CEOs, all but saying you are greedy SOBs, that the message is generally negative? What do you think?

OBERHELMAN: We talk about that, and about the only group that has lower performance evaluation, I guess, is Congress.

(LAUGHTER)

OBERHELMAN: But having said that, there have been a few rotten apples that make us all look bad.

I am a human being. I started out with virtually nothing. I worked may way up like so many businesspeople have and made ourselves great in this country. And that is what we have to make sure we preserve for our grandchildren and future generations all the way through. That is what we ought to be talking about.

But I worry about this, where we don’t talk about growing the whole pie. We want to take one piece of pie here and move it over here. Let’s talk about growing the pie. Let’s talk about going after seven billion people. I keep coming back to that, because it is such a great opportunity. And Caterpillar has done a pretty good job with that.

But to do that, we need help and we need stimulus around manufacturing and we need tax reform, and we need education reform. And we can go on and on and on.

And as vice chair of the National Association of Manufacturers, there is a really refined list of what we need to do if we want to be competitive in this country. And it is a prescription that is not that hard to follow and is pretty commonsense, actually.

CAVUTO: Well, actually you spelled it out very nicely here, Doug.

Doug Oberhelman is the chairman and CEO of Caterpillar, one of the largest companies on the planet.

Thank you very much, Doug. Good having you.

OBERHELMAN: Thank you, Neil. Good to see you.

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