This Cat's Back -- Or Is It?

[rancar]

This Cat\'s Back -- Or Is It?

The following is an excerpt from this week's copy of Barron's from an article entitled "The Cat Comes Back -- A sleek new Caterpillar shows it can make money in good times and bad"

"...Caterpillar may be conservative, but it is not stuck in its ways. One of the toughest decisions the CEO has had to make was to exit the agricultural tractor business. But after fiddling for 10 years trying to bring new innovations to the business, Catepillar agreed to sell its Challenger line to Agco in December. Though the move received barely any attention, this was almost as momentous as Sears Roebuck doing away with its famous catalogue. Caterpillar was formed in 1925 by the merger of two makers of agricultural tractors, the Best and Holt companies. But in the end, the agricultural business represented a sliver, about 4%, of Cat's total business, and by getting out of it the company is no longer exposed to an industry for which many think there is no longer any 'up' cycle. More importantly, it's a sign of how serious management is about delivering better returns."

The agricultural industry may be in a funk, but it goes through up-down cycles like any other industry. JD has lasted for how long now? They've proven things could be done right. Same thing with Kubota. Maybe, Cat just never gave it a chance. They should have explored the compact tractor market which according to a rep I spoke with from big JD is booming. /w3tcompact/icons/smile.gif

 

[Robert_in_NY]

Re: This Cat\'s Back -- Or Is It?

Cat was smart to stay out of the compact market since it is flooded with different tractors already. Cat's ag division was small compared to the rest of the company and the Challenger tractors sold fairly well both here and overseas as Claas models. Most of the industry was surprised when CAT sold it ag division because of how well they were doing and they just designed the new MT series which is quite advanced and goes up to 500 hp now which leads the market. It basicly was a decision to go back to what makes them the most money and concentrate on that which is their construction division which has been starting to fade some as was the quality of their machines, so hopefully this will help them concentrate on their construction division. But in reality they still sell Cat tractors and with the agreement sell repainted AGCO tractors thru certain Cat dealerships. They dropped their Claas agreement which makes room for repainted Gleaner combines to replace the Lexion. This will be like the CNH merger and will take a couple years to sort out before we have a better understanding of it.