John Shegerian: Welcome to another edition of Green Is Good. This is the ISRI edition of Green Is Good. We’re here in downtown Vancouver at the Vancouver Convention Center. We are at the West Pavilion and we are so honored to have with us today Neil LeBlanc. He is the Commercial Manager for Caterpillar. Welcome to Green Is Good, Neil.

Neil LeBlanc: Very good. Thank you for having me.

John: Thanks for being here today, and we’re going to be talking about all the great work you do at Caterpillar and all of Caterpillar’s involvement with recycling. But before we get to that I want you just to share with our audience a little bit about your history leading up to joining Caterpillar and why you are so green.

Neil: I’ve been working in the recycling industry for about 35 years.

John: Wow.

Neil: And for a number of years ahead of my time with Caterpillar, we manufactured attachments for recycling equipment. So I got to work in the industry. I understood it fairly well over time and really appreciated what we were doing, how our equipment was utilized and how it was helping to make the planet a little bit greener. And I was offered a position at Caterpillar, now about 17 years ago, to kind of do the same thing with a world-class company with a global reach. So our opportunities to manufacture equipment that helps create a sustainable environment is really great. So it’s exciting.

John: And, you know, I was reading about you before we taped today’s episode of Green Is Good and I love the theme that you came up with that we are going to be discussing today. You and I grew up in an era where Kermit always said, “It’s not easy being green.” But we’re going to turn that back in this conversation. We’re going to maybe share with our audience why you think that maybe it is easy to be green.

Neil: Well, it really is – you have to develop a culture around being a recycler, being green and appreciating the sustainability requirements of our planet. And at Caterpillar – I’ll share with you – it starts from the highest level of the company down to my level. We publish an annual sustainability report and we are awful proud of the work that we do to help conserve the environment and, frankly, the equipment that we provide to our customers that do the same things.

John: That’s so nice. And for our listeners out there that want to learn more about Neil’s great company, Caterpillar, you can go to www.cat.com. Let’s talk about caterpillar and being green and recycling. What is Caterpillar’s – you say it comes from the top down and it’s a cultural DNA issue. How does that play out, though, on a macro level at Caterpillar in terms of your sustainability and recycling programs?

Neil: Very good. First of all, we’ve got a very large global footprint, so one of the requirements that we have in the development of new buildings and new manufacturing facilities is working around the LEEDs environment, even if it’s outside of the United States or outside of North America. So we look for, again, sustainability measures. We look for local generation of power. We try to conserve the water that we use either in manufacturing processes or through the office space. Even something as simple as some of the plantings that we use around the office environment or outside of our buildings where they’re common to the local environment and frankly are types of plants that consume the least amounts of fluids or waters as part of the irrigation systems. So it’s at a high level back up to the top at our company down to whether we have a certain type of plant outside the building. It means a lot to us.

John: Talk a little bit about the manufacturing that you do and industrial manufacturing and how that interrelates to the recycling industry and why you are here at this great ISRI convention.

Neil: Right. One of the key things that we do is we remanufacture a lot of components that are used in our machines.

John: Wow.

Neil: So, for example, if you have a component fail on a Caterpillar machine that you have, you can take the old part off, you can return it to the local Caterpillar dealer and they will return it to Caterpillar and, in turn, will replace it with a remanufactured component. So the customer returns to us a core and the core is eventually remanned – so it’s the failed component – and they get from us a remanufactured component that has a new component warranty, and they get it for about a 40 percent savings. We actually have been doing that for about 35 or 40 years to a point where we have remanned, if we talked about pieces it would be an incredible number, but by weight it’s well over a million tons of materials that we’ve remanned over the course of our remanufacturing program.

John: And when we say “reman,” for our audience out there, can you define what remanufacturing means?

Neil: Reman for us is we’ll start with a failed component, but it has a life. It’s been technically considered to be sound.

John: Right.

Neil: And if it has got machine surfaces, we will machine all the surfaces over again. We’ll clean it. We’ll then put the assemblies back together – whether it’s valves or seals or fittings – and put it back together as its original new state. And what we have done is we’ve reused or salvaged a majority of the components but namely the iron components. They may be castings. It could be something very small that you can hold in your hands to pieces that are as big as the table if not larger.

John: So really “reman” is the Caterpillar term of art for really recycling?

Neil: That’s exactly right.

John: So, over a million tons you said?

Neil: Over a million tons over the duration of this program that we have recycled. It basically would be iron coming back to us, remanned and then resold back as a replacement component.

John: So it’s not only part of your process. In the chain of what you’re doing at Caterpillar, where else does sustainability and recycling come into play?

Neil: Exactly. Very good. Thanks. We actually are one of the world’s largest consumers of plate steel. So a lot of the manufactured components, whether it’s structures for a variety of different machines that we have, the plate steel itself comes directly from the steel mills into our manufacturing facilities. We cut the plate with laser cutting systems to whatever size/shapes that we need. Then, all of the scrap materials we condense and basically drive back into the recycling stream. And more often than not, it is a customer that buys Caterpillar equipment likely has an opportunity to get the scrap that we generate and they recycle it and it eventually makes it back into the steel mills, melted down again for new steel and the system goes on.

John: Typically, when someone like myself sees a Caterpillar piece of equipment, I don’t think of green or I don’t think of recycling, but the truth is it seems like, as a circular economy goes, you’re in the middle of all this stuff.

Neil: We really are, and frankly, we’re pretty proud of it. For us – and certainly there are a couple of benefits to us because we certainly push the sustainability message – we’re big supporters of it. It’s inherent in our DNA now within our company. Our customers, at least in my portion of the business at Caterpillar, are recyclers, and they were cool and they were green before it was really cool to be green. So they are consuming our equipment. They are utilizing our equipment and the recycling value stream. And, frankly, we put a lot of thought into the components that we use and the recyclability of the components – whether it’s electronic components or even the materials that make up the seats in our tractors.

John: So everything, on a cradle-to-cradle basis, you’re looking at everything you’re doing that touches the people, the process, the planet and eventually the profits of Caterpillar.

Neil: Exactly right.

John: For our audience out there that just joined, we are so honored to have with us today, Neil LeBlanc. He is the Commercial Manager of Caterpillar. You can learn more about Caterpillar at www.cat.com. This is the special Green Is Good ISRI edition from Vancouver, British Columbia. Neil, all your clients – the recycling industry as a whole is now having to do more with less under the new normal of where energy is trading today, iron is trading today, gold, silver and all the other commodities. How does doing more with less fit in to the culture and the mission of Caterpillar?

Neil: Very good. Thank you. We really have to focus on the productivity of the equipment that we produce.

John: Right.

Neil: So in speaking about the equipment that we bring to market, the customer’s expectations are entirely different today than what they were 10 and 15 and 20 years ago.

John: Good point.

Neil: The industry itself is very competitive. There is, at this point in time anyway, excess supply of recycling capabilities at least in the United States. And I will speak specifically to iron and steel recycling. So for the customers to really have a competitive advantage, they have to do something different and they have to gain a real edge on the competitor down the street. So, with us, we focus on the productivity of our equipment. A lot of it has to do with the customer’s metrics. Cost-per-ton is their metric, so if they recycle so many tons in a given day or week or fixed period of time, they have to understand what their costs are.

John: Ah.

Neil: And we work very closely with them in advance of purchasing our equipment or the utilization of existing equipment.

John: Right.

Neil: And we also utilize telematics, which are inherent in the machine. I’d liken it to the OnStar products in a GM car.

John: Right.

Neil: We have the same type of telematics in our machines where we can count loads, we can weigh the material, we can tabulate it and we can push it out in the customer’s business software so they know what their productivity was each day around the utilization of our equipment.

John: You said at Caterpillar, from the top down, it is a culture and DNA issue – sustainability, being green. Obviously, your passion comes shining through. With such a large corporation, how do you get so many of your employees engaged? How do you get them both engaged, honor them, recognize them and how does that look like not only here across America but across the globe where Caterpillar does business?

Neil: We’re very fortunate. Again, part of the DNA is driven by the annual sustainability report that the company produces. We deliver that at the same time with our annual earnings report, so it means a lot to us to be able to bring that forward. And in addition to that we actually have some internal challenges. Our chairman sponsors a Sustainability Award. Actually, there are several of them and they are grouped in a variety of different categories, because we have some pretty diverse businesses that we work in. The Sustainability Award is to encourage additional sustainability measures that we may not have taken in previous years.

John: Ah.

Neil: And so it drives a lot of creative thinking in product development back to the efficiency gains especially on fuel efficiency. We are fortunate that fuel prices are low right now, but more and more new product is being developed and the efficiency would be to move more tons of material and do it with less fuel consumption or at a lesser cost. So there is an opportunity for each business unit – my business unit included – to potentially win a sustainability award that is sponsored by the chairman of our company.

John: No kidding. So the chairman picks different voids that you have. Not where you’re already excelling and doing well.

Neil: That’s exactly right.

John: And he then puts out the challenge for all of the employees to put their heads together and to innovate new ideas that can help fill the void.

Neil: That is absolutely correct.

John: Wow. That’s awesome. And is it country-by-country? Is it region-by-region? How does that work?

Neil: It’s generally around the operation of a specific business unit. We’re a very large company. We’ve got 125,000 employees and we’ve got about 30 different divisions. And in the division that I’m in, we manufacture a variety of products, most of which are in the recycling space. But we also do manufacture compaction equipment for even landfills, so it’s solid waste management. And also even soil compaction, which would be involved in roadway building for example.

John: Besides you, who we know you are the platinum ambassador for green at Caterpillar, can you share with our audience another example of an employee practicing sustainability or green or those kinds of great practices?

Neil: Yeah, it’s pretty interesting because we have internal news lines and I saw this one come through just recently that we’ve got a manufacturing facility in Jacksonville, Florida, and there were two employees that were working together and there was a piece of equipment that they use, some tooling that they use to produce a product, that was deemed obsolete and, in essence, it was going to make it out into a bin and it would have made it to a recycling center somewhere. It would have been cut up for scrap. And actually the employees had a creative idea of how they could use it in even production and utilize it with a new piece of equipment, and they made some modifications that had approval from the supervisory group there. The net result was they actually utilized it to eliminate about six manufacturing steps in a 16-step process.

John: Wow.

Neil: To drive a higher level of efficiency. But the creative part of it was they took something that was due to be cut up for scrap and actually gave it a second life and, in doing it, drove a higher level of efficiency in our factory.

John: Wow. So when something like that is innovated like that, then do you take that and share those practices across all your platforms in the world wherever it would apply?

Neil: We actually do. And as I mentioned leading into that story, we had the opportunity to see it – I saw it on a news line. It basically gets pushed through the enterprise, and we’ve got pretty sophisticated email systems and news lines and news feeds and Internet sites. There is one that gets featured with a variety of different stories, and it was there so…. As I read it, there was a high opportunity that a good portion of our 100,000+ other employees around the world saw an example of that as well.

John: That’s awesome. I’ve read that Caterpillar has a foundation and the foundation, specifically, does a lot of work to make the world a better place with regards to green and sustainability. Can you share a little bit about what the Caterpillar foundation’s mission is and how it works with regards to sustainability?

Neil: I’d love to. Every year the enterprise itself funds the Caterpillar Foundation. It is operated as a nonprofit. It is not a subsidiary of Caterpillar. I believe, in 2014, if I’m not mistaken, we donated about 46 million dollars to a variety of different causes. It could be anything like the American Red Cross. We help disaster relief. We also have got a soft spot certainly for the environment. A lot of us are there are we work in it the way our customers do on a daily basis. So we understand on a global basis whether it’s deforestation – we’re concerned about that – and developing countries around the world and certainly it’s clean water as well. There is no reason in the world why all the inhabitants of this planet don’t have the opportunity to get clean water, and we’re going to do our best to fund activities and at least try to clean up a good portion of an area where we have employees or in areas that really need some attention. So, as far as the Caterpillar Foundation goes, we just think it’s phenomenal and the amount of funding that the enterprise puts into that is just mind-blowing. With 46 million dollars in one particular year, that is kind of an average year for us.

John: That is a lot of money to put towards making the world a better place. Neil: Yes, sir. John: Where is your office itself? Where do you sit on a day-to-day basis?

Neil: I physically reside in Peoria, Illinois, and Peoria is the birthplace of Caterpillar. John: Wow. Neil: So I work in the worldwide center in the headquarters for Caterpillar.

John: That’s great. So let’s talk about with over 100,000 employees, as you pointed out, you have a lot of offices across the planet. How does Caterpillar make those enterprises and where your employees work and really spend a lot of their adult life more sustainable, nicer environments, greener environments to work in?

Neil: We actually just announced the development of a plan to change our global footprint. But, specifically, it’s starting with a new worldwide headquarters in Peoria, Illinois. So this was public knowledge. This was pushed out just a few weeks ago and there are plans now – and it will take a few years for this to develop, but we are going to revitalize the downtown area of Peoria, Illinois, and the key areas where the Caterpillar facilities are located and announcing what is assumed to be about a billion-dollar investment back into the local community. So that will be developed over the next five-to-10-year period of time where it will be LEEDs Gold Standard.

John: Wow,

Neil: It will be self-generating in some of the power, most of the power that the facility will consume. It will be the water processing systems onsite. It will be temperature controlled buildings that have automatic shades and systems to be able to keep the light out or keep the light in depending on how we want it. But it will be world-class headquarters, state-of-the-art and it will rival anything in Silicon Valley when we get done.

John: Wow. We’re down to the last minute or so. We started the show with Kermit saying that, “It’s not easy being green,” and obviously Caterpillar and everything you shared with our audience today proves that it’s not that hard to be green if you really care and you really put your efforts into it. Any final thoughts you want to share with the audience in terms of Caterpillar, sustainability or any thoughts for the next generation coming behind us?

Neil: Well, to me, I’m really excited to be a part of a company that has such a great concern for the environment long-term. And, as I mentioned a little bit earlier, it is really embedded in our DNA. The company gives us the tools to be successful in support of these initiatives and frankly takes great pride and, as we mentioned a little bit earlier, even rewards us individually through some competitions to really try to focus on driving a higher level of sustainability. Recycling programs in-house are just phenomenal. The support for this just really doesn’t go away, and I encourage and, frankly, put a challenge out to all companies. Not everyone is like Caterpillar, but there is an opportunity to really push that through as part of the culture within your business to adopt sustainable measures and drive a higher level of recycling and all work together. And it’s just an exciting time for us, and I think if more companies did it, we’d be a heck of a better place.

John: Well, Neil, I just want to say thank you from Green Is Good for coming on the show today. Also, you have proven your inspiration and Caterpillar’s inspiration that you can really work together and make the world a better place. You are a sustainability superstar and truly living proof that Green Is Good. Thank you for your time.

Neil: Thank you very much.

John: Really, thank you for your time. For our audience out there, this has been the ISRI edition of Green Is Good and we’ve had Neil LeBlanc on with us. He is the Commercial Manager of Caterpillar. You can learn all about Caterpillar at www.cat.com. You can learn all about ISRI at www.ISRI.org. Thank you for being here today. We look forward to our next episode of Green Is Good.