Caterpillar CEO Confronted at Company Stockholder Meeting for Joining Environmentalist Lobbying Group
Under Questioning, CEO Admits Firm Didn't Do a Cost-Benefit Analysis Before Caterpillar Joined Lobbying Effort to Regulate CO2
For Release: June 14, 2007
Contact: David Almasi at (202) 507-6398 x11 or [email protected]
Washington, D.C. - The National Center for Public Policy Research and the Project 21 black leadership network challenged senior Caterpillar, Inc. officials at the company's stockholder meeting Wednesday, asking them to explain Caterpillar's decision to join the United States Climate Action Partnership (USCAP), which is lobbying for caps on carbon dioxide emissions.
USCAP's goal of achieving mandatory federal restrictions on carbon dioxide emissions would drive up the cost of energy and disproportionately harm low income people, Caterpillar's customers, and shareholders.
During the meeting's question-and-answer session, Project 21 Fellow Deneen Borelli questioned Caterpillar executives about whether the company performed a complete cost-benefit analysis on the effects a cap-and-trade policy on carbon emissions would have on Caterpillar, its customers and America's poor prior to the company joining the group, which lobbies for such policies.
"I asked the head of Caterpillar, James Owens, three different times if the company had done a cost-benefit analysis and he said 'no,'" said Ms. Borelli. "He also said that he was not planning to do one in the future. Unfortunately, America will be paying for this incompetence in the form of rising energy costs."
Mr. Owens also acknowledged that he had received and read the letter sent to him by over 70 national and state policy groups and representatives of mining, ranching, forestry, construction and agricultural industries, urging him to withdraw Caterpillar's membership in USCAP. The letter to Mr. Owens is available at www.nationalcenter.org/caterpillar_climate.pdf.
The Congressional Budget Office reported in April that the restrictions sought by USCAP would especially harm the poorest fifth of the U.S. population. As a percentage of wages, the poorest quintile would pay nearly double the costs borne by the richest quintile for energy. In addition, the CBO study found that "current workers and investors in [energy] industries would experience costs in the form of lower wages, job losses, and reduced stock values" as a result of a cap-and-trade emissions policy.
Tom Borelli, senior fellow with The National Center for Public Policy Research and portfolio manager for the Free Enterprise Action Fund, asked Mr. Owens if he had read the CBO report. Mr. Owens responded that he had not.
Ms. Borelli also pointed out to Mr. Owens that Caterpillar's involvement with USCAP had already lost the company at least one major customer, Murray Energy Corporation. Mr. Owens acknowledged this and said he was sorry about it.
"It's outrageous that a CEO would harm his key customers without doing any due diligence to determine the impact on his customers and shareholders," said Dr. Borelli. "This is why shareholders need to demand a debate regarding the impacts of cap-and-trade on their investment. Owens' ignorance on the issue of cap-and-trade could open up his company to shareholder lawsuits."
After only ten minutes into a scheduled 30-minute question-and-answer session, Caterpillar executives abruptly ended the meeting.The National Center for Public Policy Research, founded in 1982, is a non-partisan, non-profit educational foundation based in Washington, D.C. Project 21, a program supported by The National Center, has been a leading voice of the African-American community since 1992.
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