How Many Men’s Suits Equal One Caterpillar Tractor?
PEORIA, Ill. (AP) _ One company wanted to trade coffins for bulldozers. That deal fell through, but Caterpillar Inc. has bartered its machines for men’s suits and hotel rooms as it tries to make money in a changing market.
″It’s really going back to the caveman era,″ says Rich Buttleman, vice president of Caterpillar World Trading Corp., the subsidiary that arranges barter and other cashless trade packages.
″Caterpillar does not want to go back to the caveman era. ...We’d rather sell for cash,″ Buttleman said Monday.
″But we’re trying to maximize what we can get″ from the market, he said, adding that the world’s leading manufacturer of earth-moving machines would consider any serious non-cash offer.
Buttleman said Caterpillar created the trading subsidiary two years ago to benefit from a growing global trend toward barter, the money-less exchange of merchandise and services.
Since then, he said, $100 million worth of equipment sales that otherwise would not have taken place had been made through barter.
Peoria-based Caterpillar, which had sales of $6.7 billion last year, has traded for commodities it actually can use and for goods that are passed on to third parties, Buttleman said.
The company recently exchanged lift-trucks for Radisson Hotel Corp. rooms for use by traveling Caterpillar executives or sales personnel.
Another time, Caterpillar traded tractors for a shipment of arsenic- trioxide the company used in its foundry near Peoria, said Buttleman.
Caterpillar is tight-lipped about most details of specific trades, citing the need to remain competitive or to keep proprietary information secret.
But Buttleman talked in general terms at a recent seminar about a few of the deals worked out since the trading company was formed in August 194.
The most bizarre proposal came from a company in Colombia that wanted to trade coffins for tractors, Buttleman said.
″The problem with coffins is that you are shipping mostly air, unless they’re full, and then they have no trade value,″ Buttleman quipped. That deal fell through due to shipping costs and Caterpillar’s inability to find a market for the coffins.
The most complex exchange involved a Central American country’s offer of a load of iron ore for Caterpillar machinery, he said, without disclosing the nation involved or amounts of goods exchanged.
″Other people we deal with told us the iron ore was a joke...that nobody wanted it,″ Buttleman said. ″But we were able to trade the ore with an Eastern (European) Bloc country for men’s suits - lots of men’s suits.″
″Now we are selling men’s suits in (Western) Europe, for cash,″ through a textile broker, he said.
Caterpillar also has traded its products for unfinished mahogany, coal, sugar, oil and other goods that later were sold to third parties, Buttleman said.
In 1972, 14 nations relied on barter, or ″countertrade,″ to import needed goods when they didn’t have the needed cash, or couldn’t afford to export currency or go into debt, Buttleman said.
Now, bartering is used by least 90 countries seeking to avoid trade deficits, he said.
Nine of every 10 proposed deals fall through, he said, but not before six to 18 months have been exhausted looking into it.