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Never before has Caterpillar had so much tough competition to keep ahead of. General Motors acquired Euclid Road Machinery Co. in 1953 to apply its automobile know-how to road-building equipment, pioneered twin-engined crawlers and scrapers, quickly pushed itself into the big five among equipment manufacturers. Philadelphia's Baldwin-Lima-Hamilton, longtime locomotive manufacturer, switched to road-building equipment, this year expects its construction sales to top $70 million. Dozens of companies manufacturing everything from spinning machines to television towers are starting to make road-building equipment. Westinghouse Air Brake Co. bought the earth-moving division of his company from Pioneer Bob LeTourneau, who agreed not to build earthmovers for a five-year period ending next May. Bob LeTourneau is itching to get back into the field, hints that he will produce some machines to open the industry's eyes: "As far as earth-moving machines go, they ain't seen nothing yet."
Faced with declining farm sales, farm-equipment manufacturers have moved deeper into road building. International Harvester, No. 1 U.S. farm implementer, last year boosted its construction-equipment sales to 16.6% of total sales v. 12.7% in 1955, is now second in the basic earthmover line. Other companies are specializing to meet the requirements of the federal program. Milwaukee's Harnischfeger Corp. found that 25,000 bridges will be needed in the federal highway network (bridge builders will get 25%-30% of the highway cost). It has developed an extra-high-capacity mobile crane to raise precast sections.
Wheelbarrow to Millionaire. The magnitude of modern road building and the steadily rising cost of new equipment (up nearly 70% since 1947) have made it harder for the smaller contractor to survive. Says Talbot Bailey, vice president of Oakland's Fredrickson & Watson Construction Co.: "There used to be a time when you could just take a wheelbarrow and start out in this business—and work up to be a millionaire. Those days are gone forever. You need a lot of capital today." In the '30s a mile of concrete road could be laid for $30,000; but the federal highway program will cost almost $1,000,000 a mile, and some sections of the new highways, such as downtown Boston's Fitzgerald Expressway, may run as high as $50 million.
In the tough competition for contracts, in which a penny's difference in the cost of moving a yard of dirt can be the margin between profit and loss, road builders must use all the machines — roughly $1 worth of equipment for every dollar's worth of earth moved (about 3 cu. yd. at current costs). On modern highways an average of a million cu. yd. a mile is moved.
Despite their drain on the contractor's pocket, the machines that cost as much as $100,000 apiece save plenty of money in the long run. Contractors can get 66% more work with the same labor force as only nine years ago. Today's machine operator is a specialist who may make up to $15,000 a year, and it costs little more to have him operate a larger machine that can do more work. Since the average machine pays for itself long before wearing out, contractors figure they can afford $30,000 in new equipment to eliminate one man.