Driving Caterpillar’s success in Cuba

Screen shot 2015-08-04 at 8.22.48 AMBefore Bill Lane worked the halls of Congress in Washington, D.C., and a dozen other national capitals, he was a kid in what today is Palmetto Bay. Lane moved to Dade County in 1959, the same year, coincidentally, that Fidel Castro seized power in Cuba.

Today, Lane works on trade issues for Caterpillar. He’s the senior director of global government and corporate affairs. He also calls himself a lobbyist. He works to open up new markets for Caterpillar’s agriculture, mining and construction equipment. With Caterpillar, he has traveled to Cuba three times. His first trip came in 1998 just after Pope John Paul II visited. He also went in 2004 and traveled there in April, five months after President Barack Obama announced the effort to normalize diplomatic relations.

WLRN’s The Sunshine Economy spoke with Lane upon his return to Washington. Here are edited excerpts from that on-air conversation:

Q: How did your most recent visit to Cuba for Caterpillar compare to earlier visits?

A: In many ways it was similar to what it was in 2004. For us, the biggest difference was actually the food. There are a lot of private bistros that have been established, and the food was four-star. For the hotels, there were still some problems as far as power reliability. But like anyone [who] visits Cuba, you tend to focus on the 60-year-old cars that are driving on 60-year-old roads. The only difference is that when you have Caterpillar executives, we don’t focus on the cars. We focus on the old roads, and we’d like to see new roads.

Q: In addition to the food differences, what about the engagement regarding commerce?

A: People are optimistic. People are excited about the future and that goes [through] a cross-section of the Cubans that we talked to — from the folks that are dealing in the hospitality sector, the folks that are promoting the Port of Mariel, the business representatives or just the folks on the street. People are excited. They think Barack Obama is our greatest president.

I have to say, when you’re in Panama, you hear that Jimmy Carter was our greatest president, and when you’re in China, you often hear that Richard Nixon was our greatest president. But [Cubans] really are excited about what’s going on. They’re giving the president a lot of credit. And they are welcoming business, particularly American business, like we see all over the world.

Q: How are they welcoming that business in Cuba?

A: The question on how successful this new policy will be depends largely on the Cubans. If they welcome foreign investment in trade and commerce, I think Cuba is going to be a magnet for investment. If they try to totally control it, I think it’s going to stymie some of the positive impacts of the initiative.

They’re setting up economic zones. They’re talking about the need for infrastructure [and] the need for more power. They’re talking about building four new mines in Cuba. They have a lot of nickel production in Cuba.

We haven’t been down in Cuba in decades. But our competitors have. So the Europeans dominate the mining sector. The Japanese dominate the construction sector. The Chinese have been trying to make inroads in Cuba. What we found was while the U.S. has been trying to isolate Cuba, what’s happened is, we’ve isolated ourselves.

This was really a learning exercise for us, and we came back excited.

Q: Opponents of the re-engagement on the part of the Obama administration point out that the rest of the world does business with Cuba and its economy is still in the shape that it’s in.

A: [They] have a good point, and this is why it’s important for the Cubans to change some of their policies. But in fairness, a million Canadian tourists go to Cuba [while only] about 100,000 American visitors go to Cuba. That’s going to ramp up quickly. People are intrigued about what a trip to Cuba would be all about. You add one to three million American visitors a year to Cuba and you’re going to see a huge increase in commerce. If the Cubans welcome investment, that’s going to ramp up exponentially. On top of that, I think you’re going to see the multilateral institutions. [Once diplomatic relations are reestablished] then they’ll take greater strides as far as normalizing business. That means all [of a] sudden, the World Bank the Inter American Bank and other multilateral institutions will have the green light to start investing in Cuba. So they’ll be a lot more opportunities for development.

Q: What does that look like — normalizing commerce between the United States and Cuba — from Caterpillar’s perspective.?

A: We’re going to do this by the numbers. We want to take extreme caution to make sure we know we follow the law. We had a spirited debate whether we could even take Caterpillar hats down to Cuba to hand them out as souvenirs. We were advised against it, so we didn’t. We tried to be very cautious.

Remember the musical The Music Man? The key there is you have to know the territory. Well, we don’t know the territory, and so our for our first venture to Cuba, [our priority] is to start scoping out the opportunities there and what the market potential is and whether it’s what we expected or is it more. Right now, it is falling in the category of more. [In addition], our foundation is looking at ways to try to help the Cuban people with cultural initiatives.

They love baseball down there, and they are great at it. They have a league that plays in the winter that spans the island. So we’re looking at all sorts of ways that we can be helpful to the Cuban people while we learn more about the business opportunities.

Q: When you’re using that “Music Man” business strategy and getting to know the territory in Cuba, I have imagined a big part of that is getting to know the regulations. Do you believe that the regulations are stable enough for the kind of commerce opportunities that some think exist in Cuba for a company like Caterpillar?

A: Not yet. That’s going to be the next phase because you’ve got U.S. restrictions and you have Cuban restrictions and they’re changing. Listening to the presentation [about] the economic zone in Mariel, you would think you were sitting in downtown New York hearing the governor of New York. In fact, the governor of New York was down at the same time we were there. [The presentation was] talking about why you should invest in New York. The only difference is Cuba’s not putting ads on TV like the state of New York is. Countries are trying to attract capital. They’re trying to attract commerce. And they see that this is the path to economic growth and prosperity.

Q: Did you get a sense of the policy framework that Cuba is going to employ when it comes to greeting the new openness that the Obama administration is trying to ply?

A: Not to the degree where you call it a deep dive. More than anything else we are trying to get a feel for [if] things going to move slowly or move quickly. [Obama’s] move was bold and it was decisive. [On Caterpillar’s most recent trip to Cuba], the question was, would the Cubans to be trying to take a slow approach, or would they be welcoming? Our feeling was that this is going to move very, very quickly once diplomatic relations are reestablished. The Cubans are keenly aware of what regulations the president can change on his own and what regulations require Congress to participate.

Even where you think there is a fair amount of opposition to this new policy, it’s really subdued, in our opinion. Whether that is maintained or not will depend on whether the Cubans embrace reform our way or whether they try to control it.

Q: You mentioned that your takeaway from your recent trip to Cuba was, you thought that the Cubans were getting prepared for some pretty quick changes after the diplomatic relations are normalized. We’ve heard from Cabinet secretaries, including U.S. Commerce Secretary Penny Pritzker, that it’s a go-slow strategy after 54 years. What you felt and saw on the ground was a much different kind of expectation than what we’re hearing from top administration officials.

A: With Cuba, when someone says “go slow,” there’s a whole new definition. We waited 54 years for this. We have taken our time to the “nth” degree, and now is the time to move forward. The last thing we want to happen, though, is have the U.S. go slow, have this influx of capital come into Cuba, and have all that business go to our non-U.S. competitors.

The guidance that we would give any American company is, now is the time to get to Cuba. Start scoping out what the opportunities are so that when the opportunities truly avail themselves, you can participate rather than [be] on the outside looking in.

Listen to this conversation, which aired on “The Sunshine Economy” at: http://wlrn.org/post/sunshine-economy-commerce-communists.

Bill Lane
Personal: 62 years old; married to Jan Pursell Lane for nearly 40 years.

Current role: Leads a global team of 38 government affairs professionals in 12 countries. In that capacity, Lane is responsible for Caterpillar’s international advocacy in support of competitiveness, trade liberalization and economic growth.

Additional roles: Lane has held numerous leadership positions in Washington and was most recently chairman of the Russia PNTR coalition and the U.S. Latin America Trade Coalition, a group that supported Free Trade Agreements with Colombia and Panama. He is also co-president of the U.S. Global Leadership Campaign, a coalition supporting a robust international affairs budget.

Career before his current role: Started as an accountant at Caterpillar’s York, Pennsylvania, facility. Worked construction on five different dams in Pennsylvania during summers while attending college.

Education: Bachelor’s and master’s degrees in accounting/business from Penn State. He was a Penn State Alumni Fellow.

Connection to South Florida: Grew up in Kendall from 1959 to 1969. Went to Palmetto/Howard Drive Elementary, Palmetto Junior and Senior High School. Parents Ted and Marilyn Lane started St. Andrew Episcopal Church in Kendall. Attended the first Miami Dolphins football game.

Interests: All things Caterpillar and all things Penn State.

About Caterpillar: For 90 years, Caterpillar Inc. has been making sustainable progress possible and driving positive change on every continent. Customers turn to Caterpillar, which is based in Peoria, Illinois, to help them develop infrastructure, energy and natural-resource assets. With 2014 sales and revenues of $55.184 billion, Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company principally operates through its three product segments — construction industries, resource industries and energy and transportation — and also provides financing and related services through its financial products segment.

Website: caterpillar.com.

By Tom Hudson WLRN, Miami Herald

August 2, 2015


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