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Making tracks : Caterpillar's crawl from Scotland

Haworth, Nigel and Walker, Jim (1987) Making tracks : Caterpillar's crawl from Scotland. Quarterly Economic Commentary, 12 (4). pp. 67-71. ISSN 0306-7866

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Abstract

Caterpillar's decision to close its Uddingston plant highlights the contradiction at the heart of Scotland's commitment to industrial growth on the back of foreign manufacturing investment. The contradiction has two dimensions. Firstly, in order to attract foreign capital, a complex benefits package must be offered to potential investors. Secondly, regional industrial policy has not concerned itself with the issue at the heart of the Caterpillar case - what do you do when decisions which do not reflect the industrial efficiency of the regional subsidiary lead to run-down or closure of that facility? How do you respond when what appears to most commentators to be a profitable plant is closed on the basis of criteria which have little or nothing to do with the plant itself. This economic perspective considers the impact of this contradiction on the Scottish economy and explores what, if anything, can be done. The approaches adopted by other leading industrialised countries are also considered.