The U.S. exports more aircraft and heavy equipment than it imports. Above, workers in Peoria, Ill., at a Komatsu plant that builds mining trucks. Daniel Acker for The Wall Street Journal

PEORIA, Ill.—Robert LeTourneau, a roving American evangelist and inventor, decided in the mid-1930s that a plot of lakefront land a mile and a half northeast of downtown Peoria would be a fine place to make earth-moving equipment. Skilled labor and suppliers were plentiful; transport links were good.

Nearly eight decades later, Japan's Komatsu Ltd. , which owns the plant, still thinks Mr. LeTourneau chose the right location—even though most giant mining trucks made there are shipped overseas to Latin America, Australia, Asia and Africa.

The U.S. may not be much good at making small things like smartphones, but it is still a global leader in some of the biggest products, such as mining trucks as big as a two-story house and capable of hauling 400 tons of ore, James Hagerty reports on the News Hub. Photo: Daniel Acker for The Wall Street Journal.

About 80 miles south, in Decatur, Ill., rival Caterpillar Inc. makes its large mining trucks, most of which are exported. Caterpillar, No. 1 in this market, and No. 2 Komatsu account for roughly 85% of global sales of these trucks, roughly the size of two-story houses.

Their presence has created a cluster of skills and suppliers that feeds the industry. At a time when politicians are hoping for a job-creating revival of American manufacturing, this is one area where U.S.-based plants are still global champions.

Inside a dimly lit Komatsu building roughly the size of seven football fields, workers weld together the 30-ton frame of a mining truck. They choreograph their movements to avoid spraying each other with sparks or searing their eyes with blue light. "You almost have to make it a ballet," said Jim Mathis, a general manager at the plant. Some workers have fathers and grandfathers who made trucks here.

The U.S. had a deficit of $509.7 billion in trade in manufactured goods in this year's first nine months, largely due to gaping deficits in such major categories as consumer electronics and clothing.


"We have a very strong and very innovative military," said Cliff Waldman, a senior economist at Manufacturers Alliance for Productivity and Innovation, an Arlington, Va., research organization. That creates an infrastructure for manufacturing and spurs innovation in such areas as metallurgy and engines.

Determining where the U.S. can gain competitive edges is part of the challenge of creating more well-paid manufacturing jobs, a priority of the Obama administration, which is budgeting more money for research into manufacturing processes.

Can the U.S. return to a surplus on manufacturing trade? "Probably not," said Mr. Waldman, "but I think we will do better."

"We need to broaden our capabilities," said Gary Pisano, a professor at Harvard Business School, who writes about global competition. He prescribes more training of engineers and high-skill manufacturing workers, a longer-term investment horizon for managers and government support for research in advanced materials, biotechnology and nanotechnology.

Manufacturers benefit from clusters of suppliers and workers with specialized skills. Such clusters make Taiwan a powerhouse in semiconductors and China nearly unbeatable in smartphones and other consumer electronics. Illinois, home to such heavy-equipment pioneers as Caterpillar and Deere & Co., has maintained its expertise in building large metal structures needed for mining, construction and agricultural equipment.

Crane operators guide a 78-ton Komatsu mining-truck frame on the production line of the firm's Peoria plant. Daniel Acker for The Wall Street Journal

That local expertise attracted Komatsu. After being owned by Mr. LeTourneau, Westinghouse Electric and Dresser Industries, the Peoria plant was sold to Komatsu about two decades ago as part of the Japanese company's effort to establish a major American presence. Komatsu makes smaller mining trucks in Japan, but its largest trucks, able to carry as much as 360 tons of ore, come from Peoria.

Given decades of investment in skilled labor and nearby suppliers, "it's not so easy just to pick it up and start somewhere else," said Rod Schrader, CEO of Komatsu's U.S. arm. Global demand for large mining trucks is too small to justify more than one plant.

The global market for large mining trucks, those that can carry 200 tons or more, is likely to reach about 1,900 to 2,000 vehicles this year, up from 1,591 in 2011, said Peter Gilewicz, managing director of Parker Bay Co., a mining industry research firm. The trucks typically sell for $2.5 million to $6 million each, executives say.

More than 90% are built at North American plants owned by Caterpillar, Komatsu, Hitachi Construction Machinery Co. of Japan and Liebherr Group, based in Switzerland. Hitachi aims to more than double its capacity for making mining trucks at a Guelph, Ontario, plant, through a 33 million Canadian dollar expansion. Liebherr makes mining trucks in Newport News, Va.

There are potential challengers in other parts of the world, including Belarus-based BelAZ and Xiangtan Electric Manufacturing Corp. of China.

In Peoria, Komatsu over the past two years has expanded manufacturing space about 7% to 764,000 square feet, spread among three buildings, one dating to 1935. Most equipment isn't cutting-edge: There are about 575 factory workers and no robots.

Komatsu tried welding robots years ago, but "we couldn't get the quality where we wanted it," said Mr. Schrader. He said the company continues to look at automation possibilities.

Rio Tinto PLC's Bingham Canyon copper mine near Salt Lake City uses 89 Komatsu trucks. Because they are so big, pieces of the truck are partially assembled in Peoria, loaded onto highway trucks or railcars and assembled at the mine.

Like many factories, the Komatsu plant draws on both local and faraway suppliers. The diesel engines come from the Daventry, England, plant of U.S.-based Cummins Inc. Some of the electronics come from Asia, while certain steel parts are molded in Brazil. But Komatsu says the U.S.-made content of the plant's biggest-selling trucks is more than 70%.

—John W. Miller contributed to this article.

Write to James R. Hagerty at