Caterpillar | CAT Stock Price, Company Overview

 

Caterpillar Inc., also known simply as CAT, is an American construction, mining and other engineering equipment manufacturer. The company is the world's largest manufacturer of construction equipment. In 2018, Caterpillar was ranked number 73 on the Fortune 500 list and number 265 on the Global Fortune 500 list. Caterpillar stock is a component of the Dow Jones Industrial Average.

 

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, California-based Caterpillar Tractor Company. In 1986, the company reorganized itself as a Delaware corporation under the current name, Caterpillar Inc. It announced in January 2017 that over the course of that year, it would relocate its headquarters from Peoria, Illinois, to Deerfield, Illinois, scrapping plans from 2015 of building an $800 million new headquarters complex in downtown Peoria. Its headquarters are located in Irving, Texas, since 2022.

 

The company also licenses and markets a line of clothing and workwear boots under its Cat / Caterpillar name. Additionally, the company licenses the Cat phone brand of toughened mobile phones and rugged smartphones since 2012. Caterpillar machinery and other company-branded products are recognizable by their trademark "Caterpillar Yellow" livery and the "CAT" logo.

History

 

Origins

 

The company traces its roots to the steam tractor machines manufactured by the Holt Manufacturing Company in 1890. 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 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.

Contemporaneously, Richard Hornsby & Sons in Grantham, Lincolnshire, England, developed a steel plate-tracked vehicle, which it patented in 1904. This tractor was the first to be steered using differential braking of the tracks, eliminating the forward tiller and steering wheel. Several tractors were made and sold to operate in the Yukon, one example of which was in operation until 1927, and remnants of it still exist. Hornsby found a limited market for their tractor, so they sold their patent to Holt five years after its development.

Company photographer Charles Clements, looking at the machine's upside-down image through his camera lens, commented that the track rising and falling over the carrier rollers looked like a caterpillar, and Holt seized on the metaphor. "Caterpillar it is. That's the name for it!" Some sources, though, attribute this name to British soldiers who had witnessed trials of the Hornsby tractor 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.

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").

 

Headquarters locations

The Holt Caterpillar Co. factory in East Peoria, Illinois, in 1910. Tractors were assembled in place before assembly lines were introduced. Holt bought the plant from the bankrupt Colean Manufacturing Co. in 1910.[29]
The Holt Caterpillar Co. factory in East Peoria, Illinois, in 1910. Tractors were assembled in place before assembly lines were introduced. Holt bought the plant from the bankrupt Colean Manufacturing Co. in 1910.
A postcard showing the Caterpillar Tractor Co. plant in Peoria, period 1930–1945
A postcard showing the Caterpillar Tractor Co. plant in Peoria, period 1930–1945

On February 2, 1910, 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. On October 25, 1909, Pliny Holt purchased the factory, and immediately began operations with 12 employees. Holt incorporated it as the Holt Caterpillar Company, although he did not trademark the name Caterpillar until August 2, 1910.

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. Tractors were built in both Stockton and East Peoria.

On January 31, 2017, the company announced plans to move their headquarters from Peoria to Deerfield, Illinois, by the end of 2017. The new location at 500 Lake Cook Road is the former site of a Fiatallis plant that manufactured wheel loaders for many years.

On June 14, 2022, the company announced plans to move its global headquarters from Deerfield, Illinois, to Irving, Texas, beginning later in the year, citing "the best strategic interest of the company."

 

Machinery

 

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 is the world's largest manufacturer of wheel loaders. The small size wheel loaders (SWL) are designed and manufactured at facilities in Clayton, North Carolina. 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; Piracicaba, São Paulo, Brazil; 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. As of March 2016, Caterpillar has ceased production of on-highway vocational trucks stating that “Remaining a viable competitor in this market would require significant additional investment to develop and launch a complete portfolio of trucks, and upon an updated review, we determined there was not a sufficient market opportunity to justify the investment,” said Ramin Younessi, vice president with responsibility for Caterpillar's Industrial Power Systems Division. “We have not yet started truck production in Victoria, and this decision allows us to exit this business before the transition occurs.”

 

Engines and gas turbines

 

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.

 

Caterpillar 3116 engine was used up until 1997, when Caterpillar introduced the inline 6 cylinder 7.2 litre Caterpillar 3126 engine as its first electronic diesel engine for light trucks and buses. Caterpillar decreased emissions and noise the next year in the 3126B version of the engine, and improved emissions further in 2002 with the 3126E which had an improved high-pressure oil pump and improved electronics. In 2003 Caterpillar started selling a new version of this engine called the C-7 to meet increased United States emission standards that came into effect in 2004; it had the same overall design as the 3126 version, but with improved fuel injectors and electronics which included its new Advanced Combustion Emissions Reduction Technology (ACERT) system. In 2007, as ultra-low-sulfur diesel became required in North America, Caterpillar updated the C7 to use common rail fuel injectors and improved ACERT electronics.

 

In 1998 Caterpillar purchased Perkins Engines of Peterborough, England, a maker of small diesel and gasoline engines. Perkins engines are used in various applications. Perkins engine products are dual branded with the Perkins nameplate for both loose and OEM engines, and the CAT nameplate for captive engines within Caterpillar products.

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, as costly changes to the engines, which only constituted a small percentage of Caterpillar's total engine sales, would be likely.

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

 

The Caterpillar Defence Products 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 Álvaro de Bazán-class frigates, British River-class offshore patrol vessels, Mexican Sierra-class patrol boats, and Malaysian Kedah-class MEKO A-100 offshore patrol vessels. The poor network security of the Caterpillar engines put the United States' submarine force at risk for cyberattack. In a 2015 interview on cybersecurity, the United States Navy clarified that Caterpillar actually has some of the most secure control systems. It will be used as a model of how the Navy will design cyber protections into its control systems.

The Israel Defense Forces' use of highly modified Caterpillar D9 bulldozers has led to Caterpillar being criticized by anti-Israel activists and some shareholders. 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 against Caterpillar by her family and families of Palestinians, who were also killed by Caterpillar equipment, was unsuccessful. A lawsuit against Israel and Israeli Defense Ministry was rejected by the court, ruling that her death was an accident, caused by restricted field of view from the heavily armored operators' cabin. In 2014 Presbyterian Church (USA) sold its shares in Caterpillar citing the use of Caterpillar bulldozers involved in demolition and surveillance activities in the West Bank.

Caterpillar Electronics

The Caterpillar Electronics business unit has formed Caterpillar Trimble Control Technologies LLC (CTCT), a 50:50 joint venture with Trimble Inc. CTCT develops positioning and control products for earthmoving and paving machines in the construction and mining industries, using technologies such as GNSS, optical total stations, lasers, and sonics. The products are used in a range of applications where the operator of the machine benefits from having accurate horizontal and vertical guidance. 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 the D6-based units and the Grader power units. A parallel program was also developing wheeled high hp tractors based on using the articulated loading shovel chassis was later 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.

 

 

 

 

 

 

 

 

 

 

 

 

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