Jim McCullough, CEO and president of CNH Construction, which offers Case, New Holland and Kobelco branded construction equipment, testified on Sept. 29 before the House Transportation and Infrastructure Committee to report on progress thus far of the American Recovery and Reinvestment Act of 2009.
McCullough, who also serves as vice chair of the Association of Equipment Manufacturers (AEM), noted that the association launched “I Make America,” a national grassroots effort to broaden awareness about the vital impact of equipment manufacturing both on the U.S. economy and global competitiveness.
McCullough pointed out that the heavy construction equipment industry is a major contributor to the U.S. economy and substantially influences the economy of every state and congressional district. He said, “In 2008, equipment manufacturers, distributors and independent maintenance providers had a $364.9-billion impact on the U.S. economy, supported more than two million American jobs, and paid $111.3 billion in wages, salaries and benefits.” He added that a 2009 study by IHS Global Insight showed that during this recession, the sector lost approximately 50 percent of its pre-recession activity.
Although he thanked Chairman Jim Oberstar for his support of the American Recovery and Reinvestment Act, McCullough emphasized the need for long-term funding solutions, rather than short-term extensions. “Research shows that investment in the nation’s highways, bridges, water and transit infrastructure creates about 18,000 jobs for every $1 billion spent,” McCullough said.
“More than that, investing in infrastructure is critical to America’s ability to compete globally,” he said. “We are slipping compared to other nations that are investing heavily in their infrastructure. We need access to increased efficiency when we transport goods and people so that we compete on a level playing field with other developed and developing countries.”
McCullough noted that AEM’s second-quarter survey of its membership indicated that the construction industry is beginning to recover, with some upturn in hiring and capital spending, and some upward pressure on wages and salaries. However, “You have to ask the question, ‘Up from where?’” he said. “Our numbers are nowhere near where they were before the economy imploded.”
McCullough pointed out that, although AEM members have started to see some impact from the highway bill and other stimulus spending, funding is “as the committee is well aware, far below the required investment needs. We know that construction has lifted this country out of prior economic recessions. Now, we need to invest in what we know works to build both economic momentum and an infrastructure that will create long-term value for all of us.”
He said the emphasis on “shovel-ready” projects resulted in the majority of early investment going to road resurfacing, reconstruction and rehabilitation of existing bridges and roadways. “A long-term transportation bill will provide critical funding for ‘bulldozer-ready’ projects with the continuing benefit of easing congestion and more efficiently moving people and goods.”
McCullough said an investment in infrastructure would yield jobs faster and more surely than investment in almost any other sector. “That’s because improving America’s roads, rail and airways involves construction, and construction puts contractors and laborers to work at good-paying, high-value jobs. At the same time, it puts people to work in manufacturing—at plants across America like our CNH world-class facilities in Fargo, N.D.; Wichita, Kan.; Calhoun, Ga., and Burlington, Iowa,” he said. CNH employees are supporting AEM’s “I Make America” campaign by logging in to www.IMakeAmerica.com.
McCullough said CNH appreciates the current administration’s recognition of the importance of reauthorizing the multi-year highway bill. “We hope to see senators and representatives from both sides of the aisle join the president in supporting investment in our nation’s infrastructure—for jobs today and expanded opportunities tomorrow,” he said. He concluded by asking the chairman for his and the Committee’s support in helping end the continuing uncertainty in the North American construction market. He thanked the committee for its leadership in developing a long-range reauthorization proposal and encouraged timely enactment.