PAPER PRESENTATION ON CATERPILLAR COMPANY

SUBMITTED TO
PROF AMITA NAYAR

SUBMITTED BY:
FINANCE - 02
Abdul Gani (02)
Ajay (03)
V.Arun Kumar (05)
Arvind Rawal (06)
Dinesh (14)
Suyambuvel (41)
Abirama Sundari(51)

ACKNOWLEDGEMENT

This project and presentation required some tiresome and valuable effort. We are obliged
to everyone who has helped us tread the right path and making the presentation a notable
success.

We would like to thank Prof. AMITA NAYAR and our Dean R. KRISHNAN who
have helped us in showcasing our talent and hone our skills required for the big event.

Finally we would like to thank all our classmates for supporting us and we owe a lot to
the aforementioned people than they would be willing to accept.

PREFACE
This is a unique study to provide a comprehensive view on the Caterpillar Company. As
one of the Fortune 500, Caterpillar Inc. is the world's largest manufacturer of construction and
mining equipment, diesel and natural gas engines and industrial gas turbines. The company is a
technology leader in construction, transportation, mining, forestry, energy, logistics, electronics,
financing and electric power generation. For over 80 years, the Caterpillar name has been
associated with the highest level of quality products and services.
This project also gave a chance to know well about an enterprise which is leader in their
industry and is benchmarked by other companies worldwide. The practices and the methods
which have helped them to achieve this status. The main theme of company is to help the
various infrastructure projects worldwide whether it is mining, construction, energy or the
electric power generation. This goes well with the Today`s work Tomorrow`s world which
is being followed by Caterpillar.

Table of Contents

.................................................................................................................... 2
PREFACE................................................................................................................................... 3
Table of Contents........................................................................................................................ 4
EXECUTIVE SUMMARY............................................................................................................ 4
Quick facts about Caterpillar.......................................................................................................5
COMPANY OVERVIEW.............................................................................................................7
HISTORY.................................................................................................................................... 8
WORLDWIDE PRESENCE:....................................................................................................9
CATERPILLAR INDIA PRIVATE LIMITED............................................................................11
BUSINESS LINES.................................................................................................................... 12
BUSINESS AND BRANDS.......................................................................................................13
PRODUCTS.............................................................................................................................. 17
FINANCIAL DETAILS............................................................................................................... 20
SWOT ANALYSIS..................................................................................................................... 24
People life cycle........................................................................................................................ 26
CSR BY CATERPILLAR........................................................................................................... 28
SUSTAINABLE DEVELOPMENT.............................................................................................30
VISION 2020............................................................................................................................. 32
BIBLIOGRAPHY....................................................................................................................... 34

EXECUTIVE SUMMARY

Caterpillar products and product support services are sold worldwide into a variety of
highly competitive markets. Headquartered in Peoria, Illinois, Caterpillar is also a leading US
4

exporter, with more than half of its sales outside the United States. The present Analysis of
Caterpillar Inc. a complete and comprehensive analysis of Caterpillar Inc, one of the leading
industrial machinery and equipment manufacturing machinery company in the world, includes
an overview of the industry in the United States, a PEST Framework Analysis of the US
Equipment Manufacturing Industry, and then moves on to analyzing the company itself.
Company analysis includes a history of Caterpillar Inc, a business segment analysis of
the segments Caterpillar Inc operates through, a look at the organization structure of the
company, a geographical operating segments analysis, an analysis of the company's major
competitors namely Deere & Company, CNH Global NV, Cummins Inc, and Volvo AB.A
financial analysis of Caterpillar Inc is presented in the report which includes a ratio analysis,
basic profit and loss analysis, presentation of the company balance sheet, and much more. A
SWOT Framework Analysis of Caterpillar Inc completes this in-depth company analysis.
Later in report you will find the responsible role being played by Caterpillar Inc. towards
the environment and the societies worldwide. Vision 2020 set up in the year 2007 are the
guidelines which company will follow in the future and lay the path to be followed towards
retaining the leadership in industry.

Quick facts about Caterpillar

Type
Founded
Headquarters
Key people

Public (NYSE: CAT)

1925
Peoria, Illinois, USA
James W. Owens, CEO & Chairman

Industry

Heavy equipment

Products

Construction & Agriculture Machinery

Revenue

$44.958 billion USD(2007)

Net income

$3.541 billion USD (2007)

Employees

101,333 (2007)

Website

http://www.cat.com

Rankings

Manufacturing facilities

#50 in FORTUNE 500

S&P 500

Dow Jones Industrials

#162 in FT Global 500

45 plants in the United States

60 plants located in 20 countries

COMPANY OVERVIEW

Caterpillar Inc. (NYSE: CAT) is a United States-based corporation headquartered

in Peoria, Illinois. Caterpillar (commonly referred to simply as CAT) is "the world's largest
manufacturer

of construction and mining equipment, diesel and natural

gas engines,

and

industrial gas turbines."Famous for their products featuring caterpillar tracks and a distinctive
yellow paint scheme, Caterpillar produces a wide range of engineering vehicles, including the
range of Caterpillar bulldozers.
Caterpillar is one of the thirty companies whose stock is tracked in the Dow Jones
Industrial Average. It is a Fortune 500 company, ranked number 50 in 2008, and first in its
industry, with more than $30 billion in assets.

HISTORY

The story of Caterpillar Inc. originates in the late 19 th century, when Daniel
Best and Benjamin Holt experimented with ways to fulfill the promise that steam tractors held
for farming. By 1904, these large steam-powered tractors had been plowing California fields for
14 years, and occasionally got bogged down in the soft soil, especially after heavy rains. Once
stuck in the mire, they were difficult to pull free, even with teams of horses. Their great weight
typically rested on four metal wheels.
Holt came up with the idea to carry the road with the vehicle. On November 24, 1904 he
added wooden block-linked treads around the idlers on Holt No.77, his test tractor. The results
were impressive, and the modern tractor was born. Caterpillar became famous for its Caterpillar
30 and its Caterpillar 60 tractors.
In 1909, Benjamin Holt bought the abandoned but relatively new manufacturing plant of
a tractor company that had failed in East Peoria, Illinois. The location offered Holt everything he
needed in a manufacturing center, and despite the hefty amount of capital needed for retooling
the plant, the venture proved so profitable that by 1911 the factory employed 625 people.
Around that time, Holt Manufacturing began exporting its tractors to Argentina, Mexico,
and Canada, in addition to their domestic sales. The Holt Manufacturing Company later
pioneered the use of the continuous track during World War I. Their crawler tractors inspired
the first military tanks, which helped end World War I.
Caterpillar formed on April 15, 1925 with the merger of Holt Manufacturing
Company of Stockton, California and

the C.

L.

Best

Gas

Traction

Company of San

Leandro, California, forming the Caterpillar Tractor Co. Sales the first year were $13 million.
By 1929, sales climbed to $52.8 million, and CAT continued to grow throughout the Great
Depression of the 1930s.
After the companies merged, Caterpillar went through many changes, including the
adoption of the diesel engine. During World War II, Caterpillar products found fame with
the Seabees, Construction Battalions of the United States Navy, who built airfields and other
facilities in the Pacific Theater of Operations. During the post-war construction boom, the
8

company grew at a rapid pace and launched its first venture outside the US in 1950, marking the
beginning of Caterpillar's development into a multinational corporation.
After 1950 company has grown enormously and few of important milestones are
following.
1953. In 1931, the company created a separate engine sales group to market diesel engines to
other equipment manufacturers. This group was replaced in 1953 with a separate sales and
marketing division to better serve the needs of a broad range of engine customers. Engine sales
now account for approximately one-third of the company's total sales and revenues.

1983. Caterpillar Leasing Company is expanded to offer equipment financing options to its
customers worldwide and is renamed Caterpillar Financial Services Corporation.
1986. The Caterpillar Tractor Co. changes its name to Caterpillar Inc. - a more accurate
reflection of the enterprise's growing diversity.
1990. The company decentralized its structure, reorganizing into business units responsible for
return on assets and customer satisfaction.
2000. Caterpillar celebrates its 75th anniversary.
2001. Caterpillar is the first company to globally launch 6 Sigma and deliver first-year benefits
in excess of implementation costs.
2003. Caterpillar becomes the first engine manufacturer to offer a complete line of 2004 model
year clean diesel engines fully compliant and certified by the U.S. Environmental Protection
Agency (EPA).

WORLDWIDE PRESENCE:
Caterpillar is not confined to a particular country or continent. They have made an excellent
network of the manufacturing units and dealers worldwide across all the continents. Caterpillar
products are manufactured in 50 U.S. facilities and in 65 other locations worldwide. More than
300 products sold in 200 countries. Marketing offices in 15 cities in 11 countries. Cat Financial's
9

global locations include Belgium, Canada, China, Indonesia, Japan, Korea, Malaysia, Singapore,
Thailand, the Philippines, Australia, New Zealand, the Czech Republic, Denmark, France,
Germany (including Austria and Switzerland), Ireland, Italy, the Netherlands, Norway, Poland,
Portugal, Romania, Russia, Slovenia, Spain, Sweden, the United Kingdom, Ukraine, Brazil,
Chile, Mexico, Peru, four regional offices and one subsidiary FCC Equipment Financing in the
United States. Parts distribution facilities are present worldwide. Caterpillar has made such huge
facilities over a period of time by mergers and acquisitions.
List of various acquisitions done by Caterpillar

Location

Date

Products

Tow motor

Mentor, OH

1965

Forklifts

Solar Turbines

San Diego,
CA

1981

Natural gas
turbines

Barber Green

Minneapolis
, MN

1991

paving
products

Kiel,
Germany

1997

Marine diesel
engines

Peterboroug
h, UK

1998

Small diesel
engines

Produces both Cat and Perkins

branded engines

Larne,
Northern
Ireland

1999

Generators

Produces both Cat and

Olympian branded gen-sets

Company

Krupp MaK Engines

Perkins Engines

F.G. Wilson

10

Notes

Later became Caterpillar

Mitsubishi Forklifts, 99%
owned by Mitsubishi

Renamed Caterpillar Paving

Products

Hindustan Motors
Earthmoving
Equipment Division

Chennai,
India

Elphinstone

Shandong
Engineering
Machinery (SEM)

LOVAT

Shin Caterpillar
Mitsubishi

2001

Construction
equipment

Renamed Caterpillar India

Burnie,
Australia

2000

Underground
mining
equipment

Renamed Caterpillar
Underground Mining

China

2008

Construction
equipment

Canada

2008

Tunnel boring
machines

2008

Construction
equipment

Sagami &
Akashi,
Japan

Joint venture since 1963, with

purchase of majority became
Caterpillar Japan Ltd.

CATERPILLAR INDIA PRIVATE LIMITED

A wholly owned subsidiary of Caterpillar Inc., viz., Caterpillar India Private Limited
(CIPL), has been incorporated as an Indian Company for the manufacture of construction and
mining equipment. Caterpillar Inc formed this Company subsequent to the acquisition of the
Earthmoving Equipment Division of Hindustan Motors, Thiruvallur, TamilNadu in February
2001.

11

BUSINESS LINES
Caterpillar Inc. products, services and technologies fall into three principal lines of business.
MACHINERY
Caterpillar machines do the worlds work. From earthmoving, mining and construction
projects to forestry, waste, paving and any number of other applications, we have the right
equipment large and small to help our customers get the job done right. We also lead the
industry in the distribution of equipment and parts and offer that expertise to others through
Caterpillar Logistics Services, Inc., one of the worlds largest integrated logistics organizations
with more than 60 third-party clients.
ENGINES
Caterpillar reciprocating engines and engine systems provide power to the world. Our
engines power our own construction and mining machines plus trucks, ships and boats
and much more. Electrical power systems supply both primary and standby power for a wide
variety of uses. Solar industrial gas turbines power the production, processing and transporting
of crude oil and natural gas and provide electrical power to many industries.
FINANCIAL PRODUCTS
We help customers around the globe purchase Cat and related equipment (new and used)
through Caterpillar Financial Services Corporation and its subsidiaries. Customers can protect
their Cat equipment by using various types of insurance offered by Caterpillar Insurance
Holdings, Inc.

12

BUSINESS AND BRANDS

As a global leader with a broad portfolio of leading products, technologies and brands,
Caterpillar is forever setting higher standards by maintaining a watchful eye on the everchanging shift in regional dynamics and responding with new product innovations and
manufacturing flexibility.

CAT:
Cat brand represents the industry-leading products and services made by Caterpillar. The
Cat trademark was first used in 1949 and later registered in 1952, when it began appearing as
part of machine trade dress. Today, the Cat brand is Caterpillar's primary public-facing brand
name, representing the company's equipment, related services and the incredible dealer network
that supports customers all over the-world.

CAT LOGISTICS:
Caterpillar Logistics Services, Inc. is a wholly owned subsidiary of Caterpillar Inc.,
formed in 1987 to build on the global distribution experience of its parents company. The Cat
Logistics brand provides integrated world-class supply chain solutions and services to
Caterpillar and more than 65 other leading corporations in market sectors including automotive,
industrial, consumer durables, technology, electronics, manufacturing logistics and others. 105
offices and facilities in 25 countries around the world.

CAT FINANCIAL:
Cat Financial is a wholly owned subsidiary of Caterpillar Inc. and has been providing a
wide range of financing alternatives for Cat and related equipment for over 25 years to
customers and Cat dealers. Headquartered in Nashville, TN, Cat Financial has more than 40
offices and subsidiaries located throughout 80 countries in the Americas, Asia, Australia and
Europe.
13

CAT REMAN:
Caterpillar has been in the remanufacturing business for over 30 years, however only
began marketing its expertise to other OEMs under the Cat Remanufacturing Services (Cat
Reman) name in 2004. Cat Reman is a high-technology, low cost, global organization focused
on salvage capabilities that refurbish and restore used machinery and technologies to their
original condition and specifications.

CAT RENTAL:
Cat Rental Stores serve as a convenient source for Cat products. Numbering over 1600
locations around the globe, Cat Rental Stores offer short- and long-term rentals for the general
construction industry. The business model differs slightly in each region, with stores typically
renting Cat machines and also allied products complementary to the Cat offering, such as
specialized

tools

for

jobsite

needs.

FG WILSON:
Founded in 1966, FG Wilson produces generator sets ranging from small standby sets
suitable for domestic use to large units capable of feeding back into the national grid. The
company was introduced into the Cat family in 1999, when it was acquired from Emerson
Electric. Today, the FG Wilson brand is sold into the electric power market outside North
America

through

its

own

distinct

distribution

channel.

MAK:
MaK branded marine diesel engines are marketed and serviced through Caterpillar Marine
Power Systems (CMPS), headquartered in Hamburg, Germany. Its customers include wellknown operators of ocean-going vessels such as container feeders, chemical tankers, bulk
14

carriers, offshore supply vessels, general cargo vessels, ferries and cruise ships. In the
commercial marine segment, MaK engines are sold into tugboats, workboats and inland
waterway vessels. CMPS' regional sales offices are located in Hamburg, Shanghai, P.R. China,
Singapore and Miramar, Florida, while technical application support is located in Kiel,
Germany.

PERKINS:
Formed in 1932 and based in Peterborough, England, Perkins manufactures more than
400,000 engines every year to support customers with thousands of different specifications.
Since the 1970s, Perkins has functioned as a supplier to Caterpillarits largest single customer
with about 35% of sales volume. In 1997, Perkins was acquired by Caterpillar and today has
manufacturing facilities in Brazil, the United Kingdom and the United States.

PROGRESS RAIL:
Progress Rail is one of the largest providers of outsourced maintenance and repair services
to the railroad industry in North America. It is headquartered in Albertville, Alabama and
currently has more than 100 facilities throughout the United States, Canada and Mexico.

SOLAR TURBINES:
Solar Turbines is a world leader in the design, manufacture and service of industrial gas
turbine engines in its size range. Its products are used on land and offshore in 93 nations for the
production and transmission of oil and natural gas, and are also used for generating electricity
and thermal energy in a wide variety of industrial applications. Solar Turbines is a wholly
owned subsidiary of Caterpillar Inc.

15

CATERPILLAR Inc.

Diversification of Caterpillar Inc.

16

PRODUCTS

ENGINES:
Caterpillar is the world's largest manufacturer of medium speed engines, as well as one
of the world's largest manufacturers of high speed diesel engines, with ratings available from 54
to 13,600HP
Caterpillar engines and engine systems provide power to the world. These engines provide
power to trucks, ships and boats, our own construction and mining machines, and much more.
Electrical power systems supply both primary and standby power for a variety of uses -- like
off-shore oil rigs, huge mines in remote deserts or mountain ranges, entire communities in areas
not close to a utility power grid, hospitals, schools, factories, airports and office buildings.
The engines are broadly classified in the following segments:

Marine

Industrial / OEM (Original Equipment Manufacturers)

Oil & Gas

Power Generation

On-Highway Engines

MACHINES:
The Caterpillar equipment product line, consisting of more than 300 machines, sets the
standard for our industry - one that is increasingly customer--focused. The plan is to remain the
leader and continue to help customer to meet his needs with our equipment, with the best
17

distribution and product support system in any capital goods industry and the continual
introduction and updating of products.
Caterpillar's line of vehicles range from tracked tractors to hydraulic excavators, backhoe
loaders, motor graders, off-highway trucks, wheel loaders, and agricultural tractors. They are
used in construction, building, mining, forestry, energy, transportation and material-handling
industries.
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 (USA)

Sagamihara, Kanagawa,( Japan)

Gosselies, Charleroi, (Belgium)

Piracicaba, So Paulo, (Brazil)

India

The People's Republic of China

Large wheel loaders are manufactured exclusively on three assembly lines at Aurora, Illinois.

FINANCE:
For 26 years, Cat Financial, a wholly-owned subsidiary of Caterpillar Inc., has been
providing a wide range of financing alternatives for the complete line of Caterpillar machinery
and engines, Solar gas turbines, other related equipment and marine vessels. The company also
extends loans to customers and dealers. Cat Financial has offices and subsidiaries located
throughout the Americas, Asia, Australia, and Europe. Cat Insurance provides Cat Dealers and
customers around the world with the products and services they need to protect their new and
used equipment. Our staff of risk management and insurance experts develops and manages
programs that support Caterpillar's reputation for quality equipment, parts and service. From
Physical Damage insurance to Extended Coverage beyond the standard warranty period, you can
count on Cat Insurance to help you manage your business risk.

18

Physical Damage

Machine Extended Coverage

Power Systems Extended Service Coverage

CATERPILLAR DEFENCE PRODUCTS:

The Caterpillar Defence Products subsidiary is situated in Shrewsbury, Shropshire. The
products being produced are used worldwide by the countries such as Sweden, Norway, Finland,
Switzerland, the Netherlands, Denmark, US and UK. This division also provides both
propulsion engines and power generation systems to the naval shipbuilding industry.

19

FINANCIAL DETAILS
As we already know the Caterpillar is generating revenue from the three principal
business lines namely machinery, engines and financial products. In year 2007 North American
sales and revenues dropped significantly (down 11 percent) due to severe weakness in two key
markets: on-highway truck engines and U.S. residential construction. But customer demand for
Caterpillar products in the rest of the world particularly the emerging markets was explosive.
Sales and revenues were up 28 percent in Asia-Pacific, 34 percent in Europe, Africa, the Middle
East and The Commonwealth of Independent States (CIS) and 18 percent in Latin America. Our
integrated services businesses also grew 16 percent, representing 36 percent of total sales and
revenues and providing earnings stability. As a result, 2007 marks fifth straight year of record
sales and revenues, and our fourth consecutive year of record profit and despite continued
weakness in the United States in 2008, company is predicting another record year. Total sales
and revenues for the year 2007 stands at $ 44,958 millions. There has been growth of 7.7%
compared to year 2006.

20

Chart 1: Sales & Revenues ( Dollars in millions)

Also machinery sales makes the bulk portion of the sales & revenues almost the 2/3 rd
part comes from machinery.

Figure 1: Breakdown of sales & revenues according to the business lines

21

Total operating profit in the year 2007 was $ 4,921 million dollars. Out of which $ 2,758
million comes from machinery and $ 1,826 millions from engines. Contribution of financial
products to the profit was $ 690 millions.

Figure 2: Breakdown of operating profits accoding to business lines

As we know Caterpillar is a global organization maing products and services available
all over world. But still North America is their biggest market followed by EAME (Europe,
Africa, Middle East and the Commonwealth of Independent states), Asia Pcific and Latin
America.

22

Chart 2: Revenue generated from different markets

To maintain the leader position on the market and also to provide the vast range of
products the company spends lot of money for research and development. It helps the company
to come out with the new products more suitable to the customer needs.

Chart 3: Investment in Research & Development (Dollars in millions)

In the current scenario of global slow down and symptoms of recession in America is a
problem for the company and also the effect can be seen in the results of company so far in year
2008.
THIRD QUARTER 2008 VS. THIRD QUARTER 2007
(ENDING SEPTEMBER 30)
(Millions of dollars)

23

Revenues

2008
$ 774

2007
$758

CHANGE
2%

Profit Before Tax

$156

$187

(17%)

Profit After Tax

$118

$133

(11%)

New Retail Financing

$4,380

$3,577

22%

Total Assets

$32,735

$28,150

16%

SWOT ANALYSIS

24

STRENGTH

WEAKNESS

Hold larger portion of market share

Recent employee reduction

Growth through production not

Miscommunication between foreign

acquisition

Distribution system

High brand recognition

6 sigma

Investment in the research &

and domestic managers

development

OPPURTUNITY

THREAT

Expansion in third world countries

Economic recession

Market sales overseas offer potential

Tougher emission laws

Tax breaks for better emission

Local players in the various markets

Hydrogen fuel and solar turbine

People life cycle is the key part of the Caterpillar Inc. corporate strategy. Caterpillar
actively engages their employees in the learning and development of the human resource. At the
same time they have the overlook on the efficiency of the organization and effectiveness of the
various practices being employed.

25

People life cycle

Relationships between Learning and Development, Engagement, and Business Performance can
be effectively shown by the following diagram.

26

Career Advancement
We offer Dealer Technicians ongoing training on the latest high-tech machines and
diagnostic tools to build their skills and advance their career development. Whether you choose
to follow a career path as a Cat Dealer Shop Technician, Field Technician or Supervisor,
advancement opportunities are within your reach. Below is an example of an advancement path
many technicians take to get where they want to be.

GROWTH AND TRADE

27

Free and open markets promote development, contribute to a healthy and prosperous
global society, and present a significant business opportunity for Caterpillar as company
leverage technologies and make them accessible to the developing world. As growing markets
look for new solutions to address their challenges, company is poised to deliver the products,
services and technologies to meet their needs. Caterpillar contribute to economic growth around
the world including the rapidly developing economies of Brazil, Russia, India and China by
enabling infrastructure development that provides improved access to energy, materials and
mobility. Also Caterpillar works with policy makers to bring balance to debates over
international trade and sustainable development, and seek opportunities to partner with others to
build viable frameworks that encourage responsible growth, help our customers grow local
economies and enable societies to meet their own goals.
Four main principles followed by Caterpillar for growth are:
i.

Energy: Open markets enable Caterpillar and other companies to fund, develop and
deploy new technologies that address worldwide energy and climate challenges.

ii.

Materials: Growing economies rely on goods and resources from around the world. Our
operations and customer solutions are designed to support more sustainable forms of
production and consumption.

iii.

Mobility: Mobility of people and goods is key to improved living standards. We seek to
enable sustainable mobility improving accessibility and efficiency while minimizing
congestion and pollution.

iv.

Development: Quality infrastructure improves access to markets, education and

healthcare, enabling people to enhance their quality of life. We encourage development
that occurs in an increasingly balanced, planned and thoughtful manner.

CSR BY CATERPILLAR
28

EDUCATION
One of the major initiatives taken by the Company is in the field of education.
Recognizing the need for grooming todays children as tomorrows responsible corporate
citizens, the company established a school in 1990 near the factory premises. This English
Medium Higher Secondary School, Chellammal Vidyalaya, imparts quality education, not only
for the benefit of employees children, but also for children from nearby villages. This school
has facilities for education up to 12th Std and currently has on the rolls 1000 students. The
Company has provided the entire infrastructure, facilities and subsidized transport facility. The
school is constantly on the upgrade and over the years has become a landmark in Thiruvallur
District.
WELFARE
Alcoholism and Drug Abuse is a constant threat to society. Recognizing the need to
eradicate this evil, the company is in tie up with TTK Hospital for de-addiction treatment and
employee counseling on a continuous basis. Appreciating the efforts taken by the management
in this regard, the International Labour Organization (ILO) has identified CIPL for a yearlong
training programme for employees on Alcoholism and Drug Abuse. This programme has been
extended to neighbouring villages also. ILO has commended CIPL as one of the best companies
taking initiatives and achieving excellent results in this important and much needed welfare
measure.
HEALTH CARE
Regular eye check up camps, family planning awareness programmes etc., are being
arranged with the help of CIPLs Occupational Health Services (OHS) in association with local
hospitals. More than 2500 persons from neighbouring villages have been benefited by the
Medical Health Camps organized by the Company.

29

SUSTAINABLE DEVELOPMENT

Caterpillar is committed towards making the world a better place than what it is now so
they have proper commitment towards the restoring of our ecological environment. Caterpillar
has been criticized by many environmental groups. Products produced by the company include
forestry equipment, mining equipment, and diesel engines. While providing higher fuel
efficiency than gasoline engines, diesel engines usually produce higher levels of NOx and
particulates.
In October, 2002, Caterpillar fails to meet the emissions standards deadline fixed by
Justice Department and the State of California and was forced to pay $128 million in per-engine
non-conformance penalties. In 2004, the company came out with ACERT diesel engines that
exceed federal guidelines for emission standards. In 2007, Caterpillar released a second
generation of ACERT to meet even stricter standards. 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.
In 2005, Caterpillar donated $12 million dollars to The Nature Conservancy in a joint
effort to protect and preserve river systems in Brazil, USA, and China.
By creating distributed energy solutions is one way Caterpillar is enabling development
while preserving the environment in the Philippines and other countries. In 2007
Remanufacturing (Reman) Division launched a project that will take end-of-life diesel engines
from around the world and remanufacture them into methane-fueled generator sets. These
Reman gen sets will convert methane from animal waste into usable energy. The first units will
be installed in pig farms in the Philippines beginning in 2008, where they will burn methane,
provide electricity and reduce greenhouse gas emissions. A number of similar projects are
planned over the next several years.
Caterpillar has, for many years, been a member of the World Business Council for
Sustainable Development based in Geneva, Switzerland. Caterpillar has been listed on the Dow
Jones Sustainability World Index each year since 2001.
30

Caterpillar divisions have won Illinois Governor's Pollution Prevention Awards every year
since 1998. 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 gallons 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 would not
only meet strict quality requirements, but would allow foundries to continue to recycle
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 gallons of oil per year.

In early 2007, Caterpillar joined 26 of the world's largest corporationssuch as DuPont, BP

America, General Electric, Deere and Company, General Motors and Rio Tintoto form the
U.S. Climate Action Partnership (USCAP).
Caterpillar India`s commitment to environment has been reinforced with being awarded the
ISO 14001 Certification in July 2000. The Company adopts eco friendly production activities;
maintain ecological balance both inside and outside the organisation. The major initiatives
include:
Planting 20,000 trees of various varieties in the Company premises covering 30 acres of land
Zero Discharge of effluents
Conducting Awareness Programmes on ban of use of plastics
Emphasing the need for use of materials that can be recycled. Spreading this concept to nearby
villages.
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VISION 2020
In year 2007 Caterpillar has set few goals to be achieved for the better operations and
efficiency. Company is highly committed to its policies of sustainable growth thats the reason
environment is given importance in these goals too. Company wants to grow further but in the
way that sustains the environment.
Caterpillar vision is to contribute, through its diverse businesses, to a society in which
peoples basic needs are not only met but fulfilled in a way that sustains the environment.
2020 GOALS FOR PRODUCTS, SERVICES AND SOLUTIONS

Provide leadership in the safety of people in, on and around our products.

Reduce customer greenhouse gas emissions by 20%.

Increase customer energy efficiency by 20%.

Increase customer material efficiency by 20%.

2020 GOALS FOR OPERATIONS

Reduce recordable workplace injury rate to 0.6 and lost-time case rate due to injury to
0.15.

Increase energy efficiency by 25%.

Design all new construction to meet Leadership in Energy and Environmental Design
(LEED) or comparable green building criteria.

Use alternative / renewable sources to meet 20% of our energy needs.

Send zero waste to landfills by reducing, reusing and recycling waste.

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Hold water consumption flat.

Reduce absolute greenhouse gas emissions from existing facilities by 25%.

CONCLUSION
Caterpillar Inc. is truly leader in its industry and also in the way to make the world a
better place to live. Started in 1925 company has came a long way ahead and have diversified its
business and spread across the world. These working conditions present few peculiar problems
as working with the people of various cultures simultaneously which requires the cultural
synergy.
Near 1980 company was on the verge of bankruptcy due to the rigid organizational
structure but it was a wake up call for Caterpillar and they came back strongly. Decentralization
of organization took place and they made the strong foundation of the values which helped them
to achieve what they are today. More over Caterpillar`s worldwide code of conduct is also the
same Our Values in Action.
Finally the sustainable development approach being followed by company is admirable
and gives the sense of companys long term thinking. Prime goal of company behind providing
products and services is to improve the living standard of societies worldwide by giving them
better infrastructure and energy supply its is also the first step in sustainable development.
Vision 2020 is another remarkable benchmark to be achieved and set an example for the
corporation houses worldwide to be followed.

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BIBLIOGRAPHY

www.finance.cat.com
www.cat.com/rental
www.fgwilson.com
www.mak-global.com
www.perkins.com
www.progressrail.com
www. mysolar.cat.com
www.wikipedia.com

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