What do they do?
Caterpillar is a global leader in the manufacturing of Heavy Industrial Equipment. CAT Equipment are mostly used for Mining, Construction, Engine Manufacturing, Turbines and components of Diesel-Electric Locomotives. They are also involved in the manufacturing of secondary products like rims, fluids/filters, tires for earth movers, and ground engaging tools. In total they have about 50 production units in the United States and 60 production units around the globe. They have a large worldwide presence with 200 official dealers in 178 countries.
Brief History:
The first CAT product was a combined harvester built by Benjamin Holt in the late 19th century, in California. He was one of the pioneers of innovation and helped ease up the agriculture process by introducing heavy machines to reduce physical labour. With the combined harvester as its flagship machine, Benjamin Holt and Henry Holt founded the Stockon Wheel Company. It was later incorporated as Holt Manufacturing Company in 1892. With an encouraging increase in demand, the Holt brothers worked on and introduced a commercial crawler/tractor for agriculture.
The Holt brothers soon acquired a plant in Illinois to start the large scale production of the gas powered tractor. In 1925, Holt Manufacturing Company and C.L Best’s Gas Tractor Company merged to form ‘Caterpillar Tractor Company’. The machine seemed to have replicated the movement of a caterpillar and hence, the name ‘Caterpillar’ was given to the company. With groundbreaking work in the fuel consumption of heavy duty vehicles, Caterpillar launched a diesel Sixty tractor.
In the 1950s and 1960s Caterpillar Ltd. focused on establishing overseas subsidiaries in the Great Britain, Japan. It also worked on expanding its product line by including excavators, mining equipment and off-highway trucks. But the company faced an extreme loss as an aftermath of a global recession and economic depression. It underwent a digital makeover and was renamed as ‘Caterpillar Inc.’ in the 1980s. Large investments were made in reorganising production lines but they eventually quit the Agriculture Tractor business in 2001.
Current Profile:
Caterpillar currently has a market cap of $93.1 billion, with 2017’s revenue touching $45.46 billion. The current CEO of Caterpillar Inc. is Jim Umpleby who joined a subsidiary of Caterpillar Ltd. in 1980 as an associate engineer. The board of directors includes the likes of Kelly Ayotte, Rayford Wilkins, Jr. and Dennis Mullenburg. Caterpillar Inc. has major buyers from the Construction, Resources, and Energy & Transportation Industries. Although Caterpillar got into the Financial Services Industry only recently, its revenue from that division accounted for 6.8% of its annual revenue in 2017.
The Future:
With the increase in global spend on mining, Caterpillar is expected to assist companies with their excavation endeavours thereby increasing own sales. With its eye on non traditional heavy machines, Caterpillar has also increased its funding on Solar Turbines and Rail Road Infrastructure Machines. The Directors and Officers will be looking to capitalise on the emerging markets of global construction which is expected to be valued at over $300 billion. Caterpillar is looking to benefit from the increase in energy consumption around the world as a result of increase in population as well.
