It will also recommend strategic moves which can improve Caterpillar’s performance over the next decade.
The predecessor of Caterpillar was the Holt Caterpillar company which was established by Benjamin Holt in 1909. Caterpillar was formed in 1925 when market leader Holt Caterpillar merged with C L Best Gas Tractor Company.
The merged entity consolidated its product lines, shifted from gasoline engines to diesel engines, and continued to grow at an even pace even during the Great Depression. During the Second World War, Caterpillar’s products were widely used by the construction units of the United States Navy in the Pacific theatre of war for construction of airfields and other facilities. After the end of the war, the company grew rapidly on the back of the construction boom.
Caterpillar used acquisition as a major vehicle for growth from 1950 onwards. Its first major acquisition was Trackson, based in Milwaukee. Over the year, it has acquired companies throughout the globe in order to drive up its sales.
During the 1980s, the company was threatened by a decrease in demand because of heightened competition with its Japanese rival Komatsu. Moreover, US embargo against USSR also harmed the company because the company was all set to sell equipments worth millions of dollars to the USSR. The results of these losses were lay-offs and labour union issues subsequently. Caterpillar, in response to strike called by its unionized workforce, farmed out much of its production and warehousing to outside firms. It also started shifting its facilities to Southern states where labour laws were more favourable for non unionized workers.
In the late 1990s, Caterpillar was hurt by the Asian crisis. It had to close down Caterpillar Shanghai Engine, a joint venture with the Chinese government owned Shanghai Diesel. In 2000, it received loans worth $29