Caterpillar is the world's leading manufacturer of construction and mining equipment, but has also ended up as one of the world's more unlikely "cool brands" through some astute licensing deals, most notably with high-priced work boots and other footwear (produced since 1994 by Wolverine Worldwide) and associated apparel; as well as other accessories and even heavy duty smartphones. However the stylish yellow-tabbed logo is most familiar to the construction industry from a wide range of vehicles designed for forestry management, earth excavation, road-building and other heavy-duty outdoor tasks. Most of those machines share a simple but brilliant design feature: not so much the uniform yellow paint job, but the Caterpillar tracks after which the company is named. First conceived in the early years of the 20th century, and made famous by the military tank, these allow heavy vehicles to move safely across unstable terrain. Caterpillar didn't invent belt-driven wheels, but its predecessor company Holt Manufacturing was one of the first to use them to power industrial tractors in the US in the early 20th century. The company also makes diesel engines, gas turbines and locomotives under a variety of subsidiary brands. A century after the invention of Caterpillar tracks, the group's equipment experienced considerable demand in the early 2000s, fed by economic recovery in developing markets in Asia, the Middle East and Eastern Europe. However, that boom began to subside after 2010, despite major investments in new factories around the globe. Sales peaked in 2012 at $66bn, before falling steadily to a multi-year low of $38.5bn in 2016. CEO Doug Oberhelman stepped down ahead of schedule that year, to be replaced by Jim Umpleby, who has overseen a steady recovery in performance. Sales rebounded, settling at $53.8bn in 2019, with net income of $6.1bn. However, the company has warned of another slowdown ahead as a result of rising costs and slowing demand in Asia, especially China.
Capsule checked 6th January 2021
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Adbrands Weekly Update 20th Oct 2016: Caterpillar CEO Doug Oberhelm announced he would step down ahead of schedule as the maker of heavy construction equipment struggles with the continuing downturn in demand from emerging markets, especially China. Oberhelm had bet big on China and on mining equipment, investing $10bn on new factories and production lines since 2010. However, growth suddenly came to a crashing halt soon afterwards. Caterpillar is expected to report a fourth consecutive decline in sales and profits this year. Revenues peaked in 2012 at $66bn, but have fallen steadily since then and are expected to come in below $40bn this year, the lowest level since 2009. Company president Jim Umpleby becomes CEO at the beginning of 2017; Oberhelm will remain executive chairman for a further three months before departing the company entirely.
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