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Home , Armored bulldozer, Benjamin Holt, Bitelli, Caterpillar D9, Daniel Best, Elphinstone Group

Caterpillar Inc. (NYSE: CAT), also known as "CAT", designs, manufactures, markets and sells machinery and and sells financial products andinsurance to customers via a worldwide dealer network.[2][3] Caterpillar is the world's largest manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines.[2] With more than US$70 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 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.[3] Caterpillar's headquarters are located in Peoria, Illinois, .[1]

In the late 1890s and early 1900s, competitors and individually experimented with ways to improve the traction of steam used in farming California's Central Valley. [edit]Origin of Caterpillar name

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 soggydelta 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.[11] Two years later Holt sold his first steam- powered tractor crawlers for US$5,500. 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 for use with a tractor on December 7, 1907 for his improved "Traction " ("improvement in vehicles, and especially of the class; and included endless traveling platform supports upon which the engine is carried" Move to Peoria In February 16, 1910,[13] 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,[14] and immediately began operations with 12 employees.[15] Holt incorporated it as the Holt Caterpillar Company, although he did not trademark the name Caterpillar until August 2, 1910.[13]

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 toArgentina, Canada, and Mexico.[16] Tractors were built in both Stockton and East Peoria.[17][18] [edit]Use in

Holt's track-type tractors play a support role in World War I. Even before the U.S. formally entered WWI, Holt had shipped 1,200 tractors to , and Russia for agricultural purposes. These governments, however, sent the tractors directly to the battlefront where the put them to work hauling artillery and supplies.[19] When World War I broke out, the British ordered a and put it through trials at . The War Office was suitably impressed and chose it as a gun-tractor.[20] Over the next four years, the Holt tractor became a major , mainly used to haul medium guns like the 6-inch howitzer, the 60-pounder, and later the 9.2-inch howitzer.[21]

Holt tractors were also the inspiration for the development of the British , which profoundly altered ground warfare tactics.[10][22] Major , sent to France as an army , very soon saw the potential of a track-laying tractor.[23]:116 Although the British later chose an English firm to build its first , the Holt tractor became "one of the most important military vehicles of all time."[21] [edit]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.[24][25] 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.[25][26] [edit]Caterpillar company formed

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.[14]: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.[27] 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.[28] The new company was headquartered in San Leandro until 1930, when under the terms of the merger it was moved to Peoria.[15] 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.[24]

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 30and 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 CAT continued to grow throughout the Great Depression of the 1930s.

Caterpillar adopted the to replace engines. During World War II, Caterpillar products found fame with the Seabees, Construction Battalions of the United States Navy, who builtairfields and other facilities in the Pacific Theater of Operations. 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. [edit]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 −25°C. The facility construction was managed 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] [edit]Acquisitions

In addition to increasing sales of its core products, much of Caterpillar's growth has been through acquisitions, including:

Sortable table

Company or Acquired Asset Location Date Products Notes From Acquired

Milwaukee, (tracked loaders) "" became a Cat

Trackson Wisconsin, United 1951 and pipelayers brand States

In 1992 became Mitsubishi Towmotor Mentor, Ohio, Caterpillar Forklifts, a joint 1965[31] Forklifts Corporation United States venture 80% owned by Mitsubishi

Became Solar Division San Diego, International Incorporated, a wholly and Turbomach California, United 1981[32] Harvester Industrial gas turbines owned subsidiary of

Division States Company Caterpillar Inc.

Minneapolis, Barber-Greene Renamed Caterpillar Paving Minnesota, United 1991[33] Paving products Co. Inc. Products States

Renamed MaK Motoren MaK GmbH, a wholly owned Fried. Krupp , Germany 1997[34] Marine diesel engines subsidiary of Caterpillar Inc. GmbH

GmbH and will continue to use the MaK brand name.

[35] Perkins Limited 1998 Lucas Varity Small diesel engines Peterborough, Produces both Cat and Sortable table

Company or Acquired Asset Location Date Products Notes From Acquired

United Kingdom Perkins branded engines

Mankato, Rockwell Kato Engineering Minnesota, United 1998[36] Large electrical generators Automation, Inc. States

Asset swap. Emerson Generators. Produces both Cat Larne, Northern Emerson Electric acquired Kato Engineering F.G. Wilson 1999[37] and Olympian branded Company from Caterpillar as part of generators transaction.

Earthmoving Hindustan Equipment Chennai, India 2000[38] Construction equipment Renamed Caterpillar India Motors Ltd. Division

Acquired 50% interest in Caterpillar joint venture from partner Elphinstone Pty. Underground mining Elphinstone Pty. Burnie, 2000[39] Elphinstone. Renamed Ltd. equipment Ltd. Caterpillar Underground Mining

Renamed Caterpillar Marine Sabre Engines Power UK. Produces both 2000[40] Sabre Group Ltd. Marine diesel engines Ltd. Cat and Perkins-Sabre branded engines

Asphalt pavers, cold planers, Merged into Caterpillar SpA Minerbio, Italy 2000[41] compactors and other road Paving Products maintenance products

Wealdstone Rushden, United Remanufacturer of gasoline Organized under Caterpillar 2004[42] Engineering Ltd. Kingdom and diesel engines Remanufacturing Services

Williams Summerville, South Remanufacturer of automatic Delco Remy Organized under Caterpillar Technologies, Carolina, United 2004[42] transmissions, torque International Inc. Remanufacturing Services Inc. States converters and engines Sortable table

Company or Acquired Asset Location Date Products Notes From Acquired

Riazzino, Babcock Borsig Packager of industrial gas Turbomach SA 2004[43] Switzerland AG turbines and related systems

Supplier of railroad and transit Albertville, One Equity system products and services. Services 2006[44] Alabama Partners Owner of Electro-Motive

Corporation Diesel, Inc.

Buyout of joint venture formed in 1988. Renamed Hindustan Mathagondapalli, Engine components and 2006[45] Hindustan Motors Caterpillar Power India PowerPlus Ltd. Tamil Nadu, India heavy-duty diesel engines Private Ltd. Merged into Caterpillar India in 2008.

Automotive component Organized under Caterpillar Eurenov S.A.S. Chaumont, France 2007[46] remanufacturing Remanufacturing Services

Forestry Division Timber harvesting and Portland, Oregon, Blount of Blount 2007[47] processing equipment, loaders United States International, Inc. International, Inc. and attachments

Shandong Engineering China 2008[48] Wheel loaders Machinery (SEM)

Toronto, Ontario, [49] Lovat Inc. 2008 Tunnel boring machines Canada

Joint venture since 1963, Shin Caterpillar Sagami & Akashi, Mitsubishi Heavy after purchase of majority 2008[50] Construction equipment Mitsubishi Ltd. Japan Industries renamed Caterpillar Japan Ltd.

Diadema, São Railroad equipment Subsidiary of Progress Rail MGE 2008[51] Equipamentos & Paulo, Brazil remanufacturing Services Corporation Serviços Sortable table

Company or Acquired Asset Location Date Products Notes From Acquired

Ferroviários

West Fargo, North Remanufacturing Gremada Gremada Organized under Caterpillar Dakota, United 2008[52] transmissions, torque Industries, Inc. Industries, Inc. Remanufacturing Services States converters, and final drives

Twin City Signal Hudson, Wisconsin, Division of Progress Rail 2008[53] Signaling, traffic control Inc. United States Services Corporation

Yangsan City, Jinsung T.E.C. Co., JCS Co., Ltd. Kyungnam, South 2009[54] Seal technology Ltd. Korea

GE Inspection Erie, Pennsylvania, Division of Progress Rail 2010[55] GE Transportation Rail inspection products Products United States Services Corporation

Fenton, , Rail maintenance equipment Division of Progress Rail FCM Rail Ltd. 2010[56] United States leasing Services Corporation

Zeit Comercio e Automation and electrical Acquired by MGE, a Montagem de Curitiba, Parana, 2010[57] equipment for locomotives division of Progress Rail Equipamentos Brazil and other industries Services Corporation Ltda

Greenbriar Equity Wholly owned subsidiary of Electro-Motive La Grange, Illinois, Group LLC, Railroad locomotives and 2010[58] Progress Rail Services

Diesel, Inc. United States Berkshire Partners large diesel engines Corporation LLC, et al.

Geophysical services, Underground specializing in providing Imaging Latham, New York, Organized under Cat 2010[59] three-dimensional Technologies, United States Advanced Systems Division representations of Inc. (UIT) underground utilities Sortable table

Company or Acquired Asset Location Date Products Notes From Acquired

Joint venture since 1995, Xuzhou Caterpillar will become wholly owned Xuzhou, China 2010[60] Construction Construction equipment Xuzhou Ltd subsidiary Caterpillar Machinery Group Xuzhou

Wholly owned subsidiary of Santa Fe, New Customized stationary CleanAIR Caterpillar Inc. organized Mexico, United 2010[61] aftertreatment solutions for Systems, Inc. under Customer Services States internal combustion engines Support Division

will become part of Caterpillar's Electric Power MWM Holding Mannheim, Gas and diesel powered 2010[62] 3i Group Plc division (formerly Deutz

GmbH Germany generator sets Power Systems division of Deutz-Fahr)

Transaction closed without South Milwaukee, issuing new equity on July Bucyrus Surface and underground Wisconsin, United 2011[63] 8, 2011 in firm's largest

International, Inc. mining equipment States acquisition ever, valued at $8.8 billion.

[edit]Divestitures

Caterpillar occasionally divests assets that do not align with its core competencies.

Sortable table

Asset Divested Location Date Purchaser Products Notes

Turbomach Division San Diego, Caterpillar's only aerospace asset, [64] Sunstrand of Solar Turbines California, United 1985 Auxiliary power units not a core competency, sold to Corporation Incorporated States longtime partner

Mankato, Asset swap. Caterpillar acquired Emerson Electric Large electrical Kato Engineering Minnesota, United 1999[37] F.G. Wilson from Emerson as Company generators States part of transaction. Sortable table

Asset Divested Location Date Purchaser Products Notes

Design, assembly and Agricultural DeKalb, Illinois, AGCO marketing of 2002[65] equipment assets United States Corporation Challenger track tractors

Caterpillar Investment Preferred Group of T. Rowe Price Management Ltd. decided to exit not applicable 2006[66] Mutual funds Mutual Funds Group Inc. the investment management business.

West Columbia, Consortium of six Distributor of forestry Pioneer Machinery South Carolina, 2007[67] Caterpillar dealers equipment United States

Grand Rapids, Caterpillar formerly held 23.5% Terex Minnesota, Rubber track ASV, Inc. Minnesota, United 2008[68] of ASV outstanding shares before Inc. machines States supporting the purchase by Terex

[edit]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, other segments, and financial products.[69] [edit]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 , backhoe loaders, motor graders, off-highway , 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

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;[70] 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. [edit]Engines

Twin Caterpillar 3208T engines poweringClogher Head lifeboat (Ireland)

A portion of CAT'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 with ACERT diesel engines that exceed federal guidelines for emission standards.[71] In 2007, Caterpillar released a second generation of ACERT to meet even stricter standards.[72]

In October 2010, Caterpillar announced it would buy German engine-manufacturer MWM GmbH from 3i for $810 million.[62]

[edit]Caterpillar Defence Products

The Caterpillar Defence Products[73] subsidiary, headquartered in Shrewsbury, Shropshire, 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-84armored 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 class amphibious transport docks,Spanish Alvaro de

Bazán class frigates, British River class patrol vessels, Mexican Sierra class patrol boats,[74] and Malaysian Kedah class MEKO A-100 offshore patrol vessels.[75]

[edit]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. [edit]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 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. [edit]Financial Products

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.

[edit]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 world wide. Wolverine World Wide is one example, a licensee since 1994 and currently the sole manufacturer, worldwide licensed to produce Cat branded footwear.[76] Other licensees sell items including clothing, hats, watches, scale models of Cat machinery and other consumer products.[77][78]

[edit]Manufacturing

Caterpillar products and components are manufactured 110 facilities worldwide. 51 plants are located in the United States and 59 overseas plants are located in Australia, Belgium, Brazil, Canada, England, France, Germany, Hungary, India, Indonesia, Italy, Japan, Mexico, the Netherlands, Northern Ireland, thePeople's Republic of China, Poland, Russia, Singapore, South Africa and Sweden.

Caterpillar's historical manufacturing home is in Peoria, Illinois, which is also the location of Caterpillar's world headquarters and core research and development activities. Although Caterpillar has contracted much of its local parts production and warehousing to third parties, Caterpillar still has four major plants in the Peoria area: the Mapleton Foundry, where diesel engine blocks and other large parts are cast; the East Peoria factory, which has assembled Caterpillar tractors for over 70 years; the Mossville engine plant, built after World War II; and the Morton parts facility.

[edit]Product distribution

Caterpillar products are distributed to end-users in nearly 200 countries through Caterpillar's worldwide network of 220 dealers. Caterpillar's dealers are independently owned and operated businesses with exclusive geographical territories. Dealers provide sales, maintenance and repair services, rental equipment, and parts distribution. , a dealer based in British Columbia, Canada, is Caterpillar's largest global distributor.[citation needed]

Most dealers use a management system called Lawson for their day to day operations.

As of the first quarter of 2006, 66% of Caterpillars sales are made by one of the 63 dealers in the United States, with the remaining 44% sold by one Caterpillar's 157 overseas dealers.[citation needed]

[edit]Management

Caterpillar has a corporate governance structure where the Chairman of the board also acts as Chief Executive Officer (CEO). The Board of Directors is fully independent and is made up of non-employee directors selected from outside the company. Several group presidents report to the CEO, and multiple vice presidents report to each group president.

The board has four committees: Audit, Compensation, Governance, and Public Policy.

The behavior of all employees is governed by a Code of Worldwide Business Conduct, first published in 1974 and last amended in 2005, which sets the corporate standard for honesty and ethical behavior. Management employees are retested on this code annually. [edit]Current board of directors

. Douglas R. Oberhelman – Chairman & CEO . Eugene V. Fife . Juan Gallardo

. Charles Powell . Gail D. Fosler . Peter A. Magowan

. Daniel M. Dickinson . John R. Brazil . W. Frank Blount

. David R. Goode . John T. Dillon . William A. Osborn

. Edward B. Rust, Jr. . Joshua I. Smith On July 1, 2010, Douglas R. Oberhelman succeeded James W. Owens as CEO and on October 31, 2010 he also became Chairman.[79]

[edit]Employment

As of December 31, 2009, Caterpillar employed 93,813 persons of whom 50,562 are located outside the United States. Current employment figures represent a decline of 17,900 employees compared the third quarter of 2008.[3] Due to the restructuring of business operations which began in the 1990s, there are 20,000 fewer union jobs in the Peoria, Illinois area while employment outside the U.S. has increased.[citation needed]

[edit]Labor practices

Caterpillar came close to bankruptcy in the early 1980s, at one point losing almost US$1 million per day due to a sharp downturn in product demand as competition with Japanese rival Komatsuincreased. (At the time, Komatsu used the internal slogan "encircle Caterpillar".)[80] Caterpillar suffered further when the United States declared an embargo against the after the Soviet invasion of Afghanistan, causing the company to be unable to sell US$400 million worth of pipelaying machinery that had already been built.[81]

Due to the drastic drop in demand, Caterpillar initiated employee layoffs, which led to strikes, primarily by the members of the United Auto Workers, against Caterpillar facilities in Illinois andPennsylvania. Several news reports at the time indicated that products were piling up so high in facilities that replacement workers could barely make their way to their work stations.

In 1992, the United Auto Workers conducted a five-month strike against Caterpillar. In response, Caterpillar threatened to replace Caterpillar's entire unionized work force. Over ten thousand UAW members struck again in 1994–1995 for 17 months, a record at that time. The strike ended with the UAW deciding to return to work without a contract despite record revenues and profits by Caterpillar.[82] In 1994 Caterpillar offered a contract to the UAW members that would have raised the salary of top workers from $35,000 to $39,000 per year. However, the UAW was seeking the same top wage of $40,000 that was paid to workers at Deere & Company in 1994.[83]

During the strikes, Caterpillar used management employees in an attempt to maintain production. Caterpillar suspended research and development work, sending thousands of engineers and other non-bargained for employees into Caterpillar's manufacturing and assembly facilities to replace striking or locked out union members.

Rather than continuing to fight the United Auto Workers, Caterpillar chose to make itself less vulnerable to the traditional bargaining tactics of organized labor. One way Caterpillar achieved its goal was by outsourcing much of Caterpillar's parts production and warehouse work to outside firms. In another move, according to United Auto Workers union officials and industry analysts, Caterpillar began to execute a "southern strategy".[84] The "southern strategy" involved opening new, small plants, termed "focus facilities", in right-to-work states. Caterpillar opened these new, smaller facilities in Claytonand Sanford North Carolina, Greenville South Carolina, Corinth Mississippi, Dyersburg Tennessee, Griffin Georgia, LaGrange and Seguin Texas and North Little Rock Arkansas.

[edit]Public Relations

In addition to the company's contributions to the first and second world wars it has contributed to major construction projects including the Hoover Dam, the U.S. Interstate highway system, theChannel Tunnel under the English Channel, as well as the construction of cities and neighborhoods across the United States. Caterpillar equipment helped to tumble the Berlin Wall but also to build theUnited States–Mexico border and Israeli West Bank border barriers. [edit]Advocacy, philanthropy and awards

Caterpillar is a leading member of the U.S. Global Leadership Coalition, a Washington D.C.-based coalition of over

400 major companies and NGOs that advocates for increased funding of American diplomatic and development efforts abroad through the International Affairs Budget.[85] Economic development projects in developing countries (particularly in rural, agricultural regions) serve as new markets for Caterpillar products by improving political and economic stability and raising average incomes. [edit]The environment

In addition to devoting engineering resources to ensure that Caterpillar machinery meets or exceeds environmental laws and regulations in markets worldwide, Caterpillar also actively participates in programs that promote environmental sustainability. Despite Caterpillar's efforts to further pro-environmental sustainability goals, Caterpillar has also been found to be in violation of environmental protection laws.

[edit]Environmental stewardship

Caterpillar divisions have won Illinois 's Pollution Prevention Awards every year since 1997.[86] Caterpillar was awarded the 2007 Illinois Governor's Pollution Prevention Award for three projects: The Hydraulics and Hydraulic Systems business unit in Joliet implemented a flame sprayed coating for its truck suspension system, replacing a chroming process, reducing hazardous waste by 700,000 pounds annually and saving 14 million US gallons (53,000 m3) of water. Caterpillar's Cast Metals Organization in Mapleton worked with the American Foundry Society to help produce a rule to reduce hazardous waste in scrap metal that meet strict quality requirements, and also allow foundries to continue recycling certain types of scrap and maintain a competitive cost structure. Caterpillar's Mossville

Engine Center formed a team to look at used oil re-use and recycle processes that forced MEC to send large amounts of used oil off-site for recycling, and developed an updated system for reclaiming it for re-use on-site. The resulting benefits included a usage reduction of about 208,000 US gallons (790 m3) of oil per year.[87]

Caterpillar actively participates in initiatives such as the United States Environmental Protection Agency's National Clean Diesel Campaign program, which encourages retrofitting fleets of older buses and trucks with newer diesel engines that meet higher emissions standards.[88][89] In 2005, Caterpillar donated $12 million dollars to The Nature Conservancy in a joint effort to protect and preserve river systems in Brazil, U.S.A., and China.[90]

Caterpillar has, for many years, been a member of the World Business Council for Sustainable Development based in Geneva, Switzerland.[91]

Caterpillar has been listed on the Dow Jones Sustainability World Index each year since 2001.[92]

[edit]Violations of environmental law

In July 1999, Caterpillar and five other diesel engine manufacturers signed a consent decree with the Justice Department and the State of California, after governmental investigations revealed violations of the Clean Air Act. The violation involve over a million diesel engines sold with "defeat devices," devices that regulated emissions during pre-sale tests, but that could be disabled in favor of better performance during subsequent highway driving. Consequently, these engines "...emit up to triple the permissible level of smog-forming nitrogen oxides (NOx). In 1998 alone, these violating vehicles emitted 1.3 million tons of additional NOx — an amount equal to the emissions of 65 million cars." For this reason, Caterpillar was named the "Clean Air Villain of the Month" for August 2000 by theClean Air Trust.[93] The consent decree provided that $83 million be paid in civil penalties and determined new deadlines for meeting emissions standards. Caterpillar, however, was successful in lobbying for an extension of deadlines they considered too severe. Even so, in October, 2002, Caterpillar – the only diesel engine company (of those that signed decrees) to fail to meet the new emissions standards deadline – was forced to pay $128 million in per-engine non- conformance penalties.[94] [edit]Use of machinery by the Defense Forces

The Israel Defense Force's use of certain Caterpillar machinery has subjected Caterpillar to criticism by activists and shareholders and a lawsuit filed in the United States by the survivors of a woman killed in Israel with a Caterpillar operated by an soldier. Background

The United States government paid for, then transferred ownership of a standard, civilian configuration Caterpillar

D9 bulldozer to the Israel Defense Forces. After receiving the bulldozer, the Israel Defense Forces modified the machine for use as a combat engineering vehicle to support missions including on dangerous terrain, explosive ordinance disposal and . Some activists have criticized Caterpillar for selling machinery to be used by the Israel Defense Forces because the Israel Defense Forces have used the machinery to demolish the homes of relatives of slain Palestinian militants and also to destroy Palestinian homes during military operations.[95][96] The Israel Defense Forces state that the demolition of family homes of militants deters potential suicide bombers from committing terrorism and that the destruction of civilian properties in battle is sometimes necessary to fight terrorism. Activists have argued that destroying the homes of relatives of suicide bombers constitutes collective punishment and such practices are illegal under international law.

[edit]Caterpillar shareholder actions Caterpillar shareholders opposed to the demolition of Palestinian homes by the Israel Defense Forces repeatedly have brought motions at Caterpillar's annual meetings to examine the issue. Caterpillar's board has recommended against the passage of the motions, stating, "Caterpillar shares the world's concern over unrest in the Middle East and we certainly have compassion for all those affected by the political strife. However, more than two million Caterpillar machines and engines are at work in virtually every country of the world each day. We have neither the legal right nor the means to police individual use of that equipment. We believe any comments on political conflict in the region are best left to our governmental leaders who have the ability to impact action and advance the peace process." A motion regarding the subject proposed at the 2004 annual shareholder meeting did not pass, receiving 4% of shareholder votes Corrie et al v. Caterpillar Inc.

In 2003 a modified Caterpillar D9R operated in Gaza by an Israel Defense Forces soldier ran over and killed , an American acting as a human shield to prevent the destruction of a Palestinian home. An Israeli government investigation found that the bulldozer team was on an anti-smuggling mission, not destroying homes, and that the operator did not see Corrie.[98] The family of Rachel Corrie and the families of 16 Palestinian killed or injured by Caterpillar machinery used by the Israel Defense Forces sued Caterpillar Inc. in the United States alleging Caterpillar violated human rights and committed war crimesby knowingly selling its equipment to the Israel Defense Forces.[99]

The U.S. District Court in Tacoma, Washington dismissed the lawsuit in 2005.[100] The plaintiffs appealed and the 9th U.S. Circuit Court of Appeals upheld the dismissal on September 17, 2007, stating that the equipment was paid for using United States government funds, representing an extension of United States foreign policy and that it is not the court's jurisdiction to criticize United States foreign policy decisions made by the executive branch