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Caterpillar plant marks three decades in Franklin

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Gov. Mike Pence speaks at an event for Caterpillar Reman Powertrain Indiana to mark 30 years in business in Franklin. Scott Roberson / Daily Journal
Gov. Mike Pence speaks at an event for Caterpillar Reman Powertrain Indiana to mark 30 years in business in Franklin. Scott Roberson / Daily Journal

A Franklin plant celebrated 30 years in business, an anniversary the governor hailed as a sign of the state’s manufacturing strength.

Gov. Mike Pence visited Caterpillar Reman Powertrain Indiana in Franklin on Friday to celebrate 30 years of the company breaking down engines and inspecting and repairing components to same-as-new condition.

Caterpillar Reman is one of the largest industrial employers in Franklin with 700 workers who recondition 3,000 engine components per day and have been able to reuse more than 300 million pounds of metal over 30 years.

Pence attributed the company’s success to hard-working employees backed by a worldwide company that employs more than 3,000 in the state.

“It’s mostly a credit to great Hoosier workers. Indiana is a great place to do business. Franklin is a great place to do business. And that they’re looking for opportunities to grow is a testament to the people that make Cat Reman work every day,” Pence said.

The remanufacturing business opened as Franklin Power Products in 1983 with 22 employees. The company expanded and was purchased by Remy International in 1997. Caterpillar purchased the plant in 2007 to expand its ability to remanufacture truck diesel engines.

Workers at the Franklin Caterpillar plant disassemble an engine and inspect every part. Components that are in usable condition are cleaned, repaired, reconditioned and used again.

About 98 percent of the components reclaimed in Franklin are purchased by truck and diesel engine producer Navistar, with 80 percent of Navistar’s products being purchased by Ford, Caterpillar vice president of remanufacturing and components Greg Folley said.

The remanufacturing process allows the company to recycle materials and provide parts to dealers at about half the cost of making them new. It uses less energy in the process, in some cases up to 80 percent less, Folley said.

Of the 22 original employees at Franklin Power Products, seven remain, including John Kneebone, one of the company’s founders. When the business opened in 1983, Kneebone wasn’t sure they’d survive the first year.

“When we started out, it was pretty tenuous. This was a failing business, and we weren’t sure that it would work,” Kneebone said.

There was no guarantee that anyone was going to buy the company’s reconditioned products, so in those first years employees focused on producing the best parts and working closely to build relationships with customers, he said. Always being on the edge of going out of business built pride with the employees that has carried through to today, he said.

When Caterpillar purchased the company in 2007, it starting making investments above and beyond anything the company could have done when it was privately owned, he said.

“Caterpillar buys things that we wouldn’t have bought, that we couldn’t have afforded. But they see the value. They’re making investments here that have made this what it is today,” he said.

Caterpillar had sales and revenue of $60 billion in 2011 and employed more than 150,000 workers worldwide in 2012. The company operates nine plants in the state and employs about 3,000 statewide, giving Indiana the fourth-largest Caterpillar presence in the U.S.

“We consider that a good start in your relationship to the people of Indiana,” Pence said.

In order for the state to attract more companies like Caterpillar and help others hit 30-year anniversaries and beyond, Indiana will need to continue to promote manufacturing, cut taxes and promote vocational education in schools, Pence said.

“We continue to pass honestly balanced budgets, we continue to practice fiscal responsibility, continue to look for ways to cut red tape on businesses, and we continue to look for ways to lower the tax burden on Hoosier businesses and Hoosier taxpayers,” Pence said.

Folley hailed the Franklin facility for its annual production and safety record, telling hundreds of employees present at the event that the plant is an example of what Caterpillar wants to accomplish.

“It is spotless. It’s a model facility. It gives us every reason to want to grow,” Folley said.

Caterpillar isn’t planning any immediate growth in Franklin, Folley said. But since the facility is so directly tied to Navistar, as that company grows, Franklin will grow with, too, he said. In the future, that could mean more hiring and a possible expansion if Caterpillar Reman outgrows its location on International Drive.

Pence was joined by Indiana Secretary of Commerce Victor Smith, State Sen. Greg Walker, Franklin Mayor Joe McGuinness and Johnson County Development Corp. President and Chief Executive Officer Cheryl Morphew.

Workers also presented donations to two local nonprofits — $10,000 to the Interchurch Food Pantry of Johnson County and $6,000 to United Way of Johnson County.

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