Industryweek 2494 Fitesdon

Fites Led With Midwestern Values, Global Perspective

Aug. 24, 2011
Five questions with Manufacturing Hall of Fame inductee and former Caterpillar CEO Don Fites

Former Caterpillar Chairman and CEO Don Fites grew up on a 90-acre farm in Indiana during the Great Depression.

There were only eight students in his high school graduating class -- "and two were my first cousins," Fites recalls.

While Fites says it's hard not to "learn some real values" in such an environment, his career at Caterpillar (IW 500/21) helped him broaden his horizons. Sixteen of his 42-plus years at the company were spent in overseas management positions, including a stint as marketing director of Caterpillar Mitsubishi Ltd. in Tokyo and as president of Caterpillar Brasil SA in Sao Paulo, Brazil.

Don Fites

Fites clearly developed a global perspective, which is evident in one of his core business philosophies: "If you're not competitive everywhere, you're not competitive anywhere."

In December 2010, IndustryWeek recognized Fites' illustrious career with Caterpillar by inducting him into the IndustryWeek Manufacturing Hall of Fame.

Manufacturing over Hoops

IW: How did you get into manufacturing?

DF: I got a basketball scholarship to Valparaiso University and said, 'I want to be an engineer.' The basketball coach and dean of engineering said, 'You can't do both,' and they were right. I wasn't very good in basketball anyway, not at that level.

Well, I graduated from Valparaiso University with an engineering degree and went to work for Caterpillar right out of school, and ended up getting a master of science [in management] from MIT.

... But I spent the initial part of my career with Caterpillar -- the first 20 years or so -- in sales and marketing, mostly outside the U.S.

In fact, I lived at least three years on every continent of the world except Australia during that period of time. My first real identification with manufacturing was when I spent four years at Caterpillar Mitsubishi in Japan. Although I wasn't directly charged with manufacturing, we were stationed in a manufacturing facility.

And when I came back [to the United States] after several assignments, I had the opportunity to become president of Caterpillar Brasil. Brazil was and still is a major manufacturing center for Caterpillar, so for the first time I was actually faced with making sure that one of our manufacturing facilities was operating profitably and also producing quality equipment. So that was my first hands-on responsibility for manufacturing.

IW: What did you learn during that time?

DF: I learned it was a lot more challenging than I thought it would be. I'd always been on the receiving end of this equipment on the marketing side, and now all of a sudden I'm on the side of actually producing the equipment and sending it out to our Caterpillar dealers around the world, and particularly to our dealers in Brazil.

You also learn a lot about efficiency and morale and how important quality is, and how do we engrain quality into a manufacturing organization.

It was a real eye-opener for me.

'Yellow Paint in our Veins'

IW: Did you have a philosophy that guided you throughout your career?

DF: Well, I think I've developed several. But one of them that sticks with me is about the way the world works today. We started talking about this years ago [at Caterpillar]: "If you're not competitive everywhere, you're not competitive anywhere."

When you think about that, if you're not competitive everywhere, you're not competitive anywhere. That means you may think you're competitive because you're competitive in Market A or Market B, but if you're not competitive in Market C, you better start asking yourself why, because that guy that's competitive in Market C is going to be coming after you in Market A and B.

... So that's sort of the philosophy that I think has made [Cat] the worldwide leader in the things that we do.

IW: You retired from Caterpillar in 1999. I can't help but notice that more than a decade later, you still affectionately refer to the company as "we" rather than "they." You spent your entire career at Cat, right?

DF: Yes, most all of us do.

I mean this is a company where most of the people start right out of college and end up retiring here. The current CEO would fit in that mold, and the CEO before him would also fit in that mold.

... It's not to say we won't hire people from outside -- we do. But most of the people spend their entire careers here, and we always say that we all have yellow paint in our veins, and you get involved in this company and this business, and it is contagious.

IW: How do you see your legacy in U.S. manufacturing and at Caterpillar?

DF: Things are so much more complex and difficult today that when you start talking about legacies, you have to put it in the context that the people we have managing the company today are so much better than we were 20 years ago that I'm not sure legacies are that instructive.

I guess I'm just pleased that the company is doing as well as it is, and I still think some of the tough decisions we made as a team in the 90s have enabled some of that to happen.

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