Caterpillar Inc.
Caterpillar Inc.

Type Public
Traded as NYSE: CAT
Dow Jones Industrial Average Component
S&P 500 Component
Industry Heavy equipment
Engines
Financial services
Predecessors C. L. Best Tractor Company
Holt Manufacturing Company
Founded California, United States (April 15, 1925)
Headquarters Peoria, Illinois, United States
Area served Worldwide
Key people Douglas R. Oberhelman (Chairman and CEO)

Products

Products List

D11 Bulldozer

345C L Excavator

930G Wheel Loader

797F Haul Truck

C13 Diesel Engine

Class 7 and class 8 Trucks

Services

Services List

Financing
Insurance
Maintenance
Training
Revenue US$ 65.87 billion (2012)[1]
Operating income US$ 8.57 billion (2012)[1]
Net income US$ 5.68 billion (2012)[1]
Total assets US$ 89.35 billion (2012)[1]
Total equity US$ 17.53 billion (2012)[1]
Employees 125,341 (Dec 2012)[1]
Subsidiaries
Subsidiary List
Caterpillar Financial Services Corporation
Caterpillar Insurance Holdings, Inc.
Caterpillar Logistics Services, Inc.
Caterpillar Marine Power Systems
FG Wilson (Engineering) Ltd.
Perkins Engines Co. Limited
Progress Rail Services Corporation
Solar Turbines Incorporated
Website www.caterpillar.com
Footnotes / references
[2][3][4][5]
Caterpillar Inc., is an American corporation which designs, manufactures, markets and sells machinery and engines and sells financial products and insurance to customers via a worldwide dealer network.[2][3] Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.[1] With more than US$89 billion in assets, Caterpillar was ranked number one in its industry and number 44 overall in the 2009 Fortune 500.[6]

Caterpillar stock is a component of the Dow Jones Industrial Average.[7] Caterpillar Inc. traces its origins to the 1925 merger of the Holt Manufacturing Company and the C. L. Best Tractor Company, creating a new entity, the California based Caterpillar Tractor Company.[8] In 1986, the company re-organized itself as a Delaware corporation under the current name, Caterpillar Inc. Caterpillar's headquarters are located in Peoria, Illinois, United States.[1]

Caterpillar machinery is recognizable by its trademark "Caterpillar Yellow" livery and the "CAT" logo.[9]

History
Main article: Holt Manufacturing Company

Benjamin Holt, one of the founding fathers of Holt Manufacturing Company.

Two Holt 45 gas crawler tractors team up to pull a long wagon train in the Mojave Desert during construction of the Los Angeles Aqueduct in 1909.
Origins
The steam tractors of the 1890s and early 1900s were extremely heavy, sometimes weighing 1,000 pounds (450 kg) per horsepower, and often sank into the rich, soft earth of the San Joaquin Valley Delta farmland surrounding Stockton, California. Benjamin Holt attempted to fix the problem by increasing the size and width of the wheels up to 7.5 feet (2.3 m) tall and 6 feet (1.8 m) wide, producing a tractor 46 feet (14 m) wide. But this also made the tractors increasingly complex, expensive and difficult to maintain.

Another solution considered was to lay a temporary plank road ahead of the steam tractor, but this was time-consuming, expensive, and interfered with earthmoving. Holt thought of wrapping the planks around the wheels. He replaced the wheels on a 40 horsepower (30 kW) Holt steamer, No. 77, with a set of wooden tracks bolted to chains. On Thanksgiving Day, November 24, 1904, he successfully tested the updated machine plowing the soggy delta land of Roberts Island.[10]

Company photographer Charles Clements was reported to have observed that the tractor crawled like a caterpillar,[2] and Holt seized on the metaphor. "Caterpillar it is. That's the name for it!"[10] Some sources, though, attribute this name to British soldiers in July 1907. Two years later Holt sold his first steam-powered tractor crawlers for US$5,500, about US$128,000 today. Each side featured a track frame measured 30 inches (760 mm) high by 42 inches (1,100 mm) wide and were 9 feet (2.7 m) long. The tracks were 3 inches (76 mm) by 4 inches (100 mm) redwood slats.[10]

Holt received the first patent for a practical continuous track for use with a tractor on December 7, 1907 for his improved "Traction Engine" ("improvement in vehicles, and especially of the traction engine class; and included endless traveling platform supports upon which the engine is carried".[11]

Move to Peoria

A postcard showing the Caterpillar Tractor Co. plant in Peoria, period 1930–1945.
On February 2, 1910,[12] Holt opened up a plant in East Peoria, Illinois, led by his nephew Pliny Holt. There Pliny met farm implement dealer Murray Baker who knew of an empty factory that had been recently built to manufacture farm implements and steam traction engines. Baker, who later became the first executive vice president of what became Caterpillar Tractor Company, wrote to Holt headquarters in Stockton and described the plant of the bankrupt Colean Manufacturing Co. of East Peoria, Illinois. On October 25, 1909, Pliny Holt purchased the factory,[13] and immediately began operations with 12 employees.[14] Holt incorporated it as the Holt Caterpillar Company, although he did not trademark the name Caterpillar until August 2, 1910.[12]

The addition of a plant in the Midwest, despite the hefty capital needed to retool the plant, proved so profitable that only two years later the company employed 625 people and was exporting tractors to Argentina, Canada, and Mexico.[15] Tractors were built in both Stockton and East Peoria.[16][17]

Use in World War I
Holt's track-type tractors played a support role in World War I. Even before the U.S. formally entered WWI, Holt had shipped 1,200 tractors to England, France and Russia for agricultural purposes. These governments, however, sent the tractors directly to the battlefront where the military put them to work hauling artillery and supplies.[18] When World War I broke out, the British War Office ordered a Holt tractor and put it through trials at Aldershot. The War Office was suitably impressed and chose it as a gun-tractor.[19] Over the next four years, the Holt tractor became a major artillery tractor, mainly used to haul medium guns like the 6-inch howitzer, the 60-pounder, and later the 9.2-inch howitzer.[20]

Holt tractors were also the inspiration for the development of the British tank, which profoundly altered ground warfare tactics.[10][21] Major Ernest Swinton, sent to France as an army war correspondent, very soon saw the potential of a track-laying tractor.[22]:116 Although the British later chose an English firm to build its first tanks, the Holt tractor became "one of the most important military vehicles of all time."[20]


A Caterpillar D2, introduced in 1938, at the Serpentine Vintage Tractor Museum, Serpentine, Western Australia.
Post-war challenges
Holt tractors had become well known during World War I. Military contracts formed the major part of the company's production. When the war ended, Holt's planned expansion to meet the military's needs was abruptly terminated. The heavy-duty tractors needed by the military were unsuitable for farmers. The company's situation worsened when artillery tractors were returned from Europe, depressing prices for new equipment and Holt's unsold inventory of military tractors. The company struggled with the transition from wartime boom to peacetime bust. To keep the company afloat, they borrowed heavily.

C. L. Best Gas Tractor Company, formed by Clarence Leo Best in 1910 and Holt's primary competitor, had during the war received government support enabling it to supply farmers with the smaller agricultural tractors they needed.[23][24] As a result, Best had gained a considerable market advantage over Holt by war's end. Best also assumed considerable debt to allow it to continue expansion, especially production of its new Best Model 60 "Tracklayer".

Both companies were adversely impacted by the transition from a wartime to a peacetime economy, which contributed to a nationwide depression, further inhibiting sales. On December 5, 1920, 71-year-old Benjamin Holt died after a month-long illness.[24][25]

Caterpillar company formed (1925)

A Caterpillar D9L bulldozer with elevated sprocket design.
The banks who held the company's large debt forced the Holt board of directors to accept their candidate, Thomas A. Baxter, to succeed Benjamin Holt. Baxter initially cut the large tractors from the company's product line and introduced smaller models focused on the agricultural market. When the Federal Aid Highway Act of 1921 funded a US$1 billion federal highway building program, Baxter began re-focusing the company towards building road construction equipment.[13]:66 Both companies also faced fierce competition from the Fordson company.

Between 1907 and 1918, Best and Holt had spent about US$1.5 million in legal fees fighting each other in a number of contractual, trademark and patent infringement lawsuits.[26] Harry H. Fair of the bond brokerage house of Pierce, Fair & Company of San Francisco had helped to finance C. L. Best's debt and Holt shareholders approached him about their company's financial difficulty. Fair recommended that the two companies should merge. In April and May 1925, the financially stronger C. L. Best merged with the market leader Holt Caterpillar to form the Caterpillar Tractor Co.[27]

The new company was headquartered in San Leandro until 1930, when under the terms of the merger it was moved to Peoria.[14] Baxter had been removed as CEO earlier in 1925, and Clarence Leo Best assumed the title of CEO, and remained in that role until October 1951.[23]

The Caterpillar company consolidated its product lines, offering only five track-type tractors: the 2 Ton, 5 Ton, and 10 Ton from the Holt Manufacturing Company's old product line and the Caterpillar 30 and Caterpillar 60 from the C. L. Best Tractor Co.'s former product line. The 10 Ton and 5 Ton models were discontinued in 1926. In 1928, the 2 Ton was discontinued. Sales the first year were US$13 million. By 1929, sales climbed to US$52.8 million, and Caterpillar continued to grow throughout the Great Depression of the 1930s.

Caterpillar adopted the diesel engine to replace gasoline engines. During World War II, Caterpillar products found fame with the Seabees, Construction Battalions of the United States Navy, who built airfields and other facilities in the Pacific Theater of Operations. Caterpillar ranked 44th among United States corporations in the value of wartime military production contracts.[28] During the post-war construction boom, the company grew at a rapid pace and launched its first venture outside the U.S. in 1950, marking the beginning of Caterpillar's development into a multinational corporation.

Expansion in developing markets
Caterpillar built its first Russian facility in the town of Tosno, located near St. Petersburg, Russia. It was completed in 16 months and occupied in November 1999. It had the first electrical substation built in the Leningrad Oblast since the Communist government was dissolved on December 26, 1991. The facility was built under harsh winter conditions, where the temperature was below −13 °F (−25 °C). The facility construction was managed by the Lemminkäinen Group located in Helsinki, Finland.[citation needed]

The $125M Caterpillar Suzhou, People's Republic of China facility, manufactures medium wheel loaders and motorgraders, primarily for the Asian market. The first machine is scheduled for production in March 2009. URS Ausino, in San Francisco, California, manages facility construction.[citation needed]

Caterpillar has manufactured in Brazil since 1960.[29] In 2010 the company announced plans to further expand production of backhoe and small wheel loaders with a new factory.[30]

Business lines

Through fiscal year 2010, Caterpillar divided its products, services and technologies into three principal lines of business: machinery, engines and financial products for sale to private and governmental entities.[2] Starting in 2011, Caterpillar reports its financials using five business segments: construction industries, resource industries, power systems, financial products, and all other segments.[84]


Machinery


Cat 365B demolition machine in action
See also: List of Caterpillar Inc. machines
Caterpillar has a list of some 400 products for purchase through its dealer network. Caterpillar's line of machines range from tracked tractors to hydraulic excavators, backhoe loaders, motor graders, off-highway trucks, wheel loaders, agricultural tractors and locomotives. Caterpillar machinery is used in the construction, road-building, mining, forestry, energy, transportation and material-handling industries.


Caterpillar D350D articulated off-road truck
Caterpillar is the world's largest manufacturer of wheel loaders. The medium size (MWL) and large size (LWL) are designed at their Aurora, Illinois facility. Medium wheel loaders are manufactured at: Aurora, Illinois; Sagamihara, Kanagawa, Japan; Gosselies, Charleroi, Belgium; Piracicaba, São Paulo, Brazil;[85] India and the People's Republic of China. Large wheel loaders are manufactured exclusively in the United States on three separate assembly lines at Aurora, Illinois.

On-road trucks
Caterpillar began selling a line of on-road trucks in 2011, the Cat CT660, a Class 8 vocational truck.[86]

Engines

Twin Caterpillar 3208T engines powering Clogher Head lifeboat (Ireland)
A portion of Caterpillar's business is in the manufacturing of diesel and natural gas engines and gas turbines which, in addition to their use in the company's own vehicles, are used as the prime movers in locomotives, semi trucks, marine vessels and ships, as well as providing the power source for peak-load power plants and emergency generators.

In 2004, the company introduced a series of ACERT diesel engines designed to exceed federal guidelines for emission standards.[87] In 2007, Caterpillar released a second generation of ACERT to meet even stricter emissions standards.[88]

In June 2008, Caterpillar announced it would be exiting the on-highway diesel engine market in the United States before updated 2010 U.S. Environmental Protection Agency (EPA) emission standards took effect,[89] as costly changes to the engines (which only constituted a small percentage of Caterpillar's total engine sales) would be likely.[90]

In October 2010, Caterpillar announced it would buy German engine-manufacturer MWM GmbH from 3i for $810 million.[72]

Caterpillar Defense Products
The Caterpillar Defence Products[91] subsidiary, headquartered in Shrewsbury, United Kingdom, provides diesel engines, automatic transmissions and other parts for the UK's Titan armored bridge layer, Trojan combat engineering tank, Terrier combat engineering vehicles, and tank transporters; the Romanian MLI-84 armored personnel carrier and the Swiss Piranha III light armored vehicle, which is currently being developed for use by American light armored formations; large fleets of military trucks in both the U.S. and UK; and the CV90 family of infantry fighting vehicles used by the armies of Sweden, Norway, Finland, Switzerland, the Netherlands and Denmark.

This division also provides both propulsion engines and power generation systems to the naval shipbuilding industry, such as the Series 3512B turbocharged V-12 diesel engine for American Virginia class nuclear submarines. Caterpillar diesel engines are also used in San Antonio class amphibious transport docks, Spanish Alvaro de Bazán class frigates, British River class patrol vessels, Mexican Sierra class patrol boats,[92] and Malaysian Kedah class MEKO A-100 offshore patrol vessels.[93]


IDF Caterpillar D9 armored bulldozer
Israel buys bulldozers for the Israel Defense Forces (IDF) from Caterpillar through the U.S. government foreign aid money in their civilian configuration. The military modifications and the installment of vehicle armor are done entirely in Israel by the IDF and Israeli security contractors (Israel Military Industries and Israel Aerospace Industries).[citation needed] The IDF uses many Caterpillar machines such as bulldozers, excavators, wheel loaders and graders mainly for engineering, earthworks and building projects. The most famous machine in use by the IDF's Combat Engineering Corps is the heavy IDF Caterpillar D9 armored bulldozer, which is being used also for combat engineering and combat missions under fire.

The Israel Defense Forces' use of highly modified Caterpillar D9 bulldozers has led to Caterpillar being criticized by activists and some shareholders.[94][95] In particular, the IDF Caterpillar D9 was involved in an incident in 2003, in which the American activist Rachel Corrie was killed by a bulldozer. A lawsuit was launched against Caterpillar by her family and the families of Palestinians who were also killed by Caterpillar equipment, but was unsuccessful.[96][97] A lawsuit was also filed against Israel and Israeli Defense Ministry but was rejected by the court, which ruled that her death was an accident, caused by restricted field of view from the heavily armored operators' cabin.[98]

The companys connection to Israel Defence Forces is the reason why the American Presbyterian Church in 2014 decided to divest from the company.[99]

Caterpillar Electronics
The Caterpillar Electronics business unit has formed Caterpillar Trimble Control Technologies LLC (CTCT), a 50:50 joint venture with Trimble Navigation to develop electronic guidance and control products for earthmoving machines in the construction, mining and waste industries. CTCT is based in Dayton, Ohio and started its operations on April 1, 2002.

Agriculture products
Caterpillar introduced the Challenger range of agricultural tractors as the result of several development programs over a long period of time. The program started in the 1970s and involved both D6-based units and Grader power units. A parallel program was also developing wheeled high hp tractors based on using the articulated loading shovel chassis was latter merged with the crawler team. The result was the Challenger Tractor and the "Mobi-Trac" system.

The Challenger has been marketed in Europe as Claas machines since 1997, with Caterpillar marketing the Claas built Lexion combine range in the USA. Claas and Caterpillar formed a joint venture, Claas Omaha, to build combine harvesters in Omaha, Nebraska, USA under the CAT brand. In 2002, Cat sold its stake to Claas, and licensed the use of CAT and the CAT yellow livery to Claas. They are marketed as Lexion combines now.

Also in 2002, Caterpillar sold the Challenger tracked tractor business to AGCO and licensed the use of the Challenger and CAT names and livery to them. This ended Cat's venture into agriculture.

Financial products and brand licensing
Caterpillar provides financing and insurance to customers via its worldwide dealer network [2] and generates income through the licensing of the Caterpillar and CAT trademarks and logos.

Brand licensing

Caterpillar-branded work boots manufactured by Wolverine World Wide
Caterpillar sells the right to manufacture, market and sell products bearing the Caterpillar brand and trademarks to licensees worldwide. Wolverine World Wide is one example, a licensee since 1994 and currently the sole manufacturer, worldwide licensed to produce Cat branded footwear.[100] Other licensees sell items including clothing, hats, watches, scale models of Cat machinery and other consumer products.[101][102]