Cat opening new North American manufacturing facility in 2012

| November 11, 2011

Caterpillar Inc. announced plans on Nov. 11 to shift its production from Japan by opening a new manufacturing facility in North America for small tracktype tractors and mini hydraulic excavators.

The Peoria, Ill.-based company says the shift is part of a strategic decision to move production closer to the majority of customers who use the products, a large base of which is in North America and Europe. The move will also create more than 1,000 jobs in North America, according to Caterpillar.

The new North American facility will become Caterpillar’s global source for small
track-type tractors. For mini hydraulic excavators, the new facility will provide
completed machines for customers in North and South America. In addition, the company
also says it plans to export partially assembled mini excavator base units to a facility in Europe,
where final assembly will take place, improving delivery times for European customers.

When fully operational and at capacity, the North American facility is expected to
employ more than 1,000 people. The facility will be part of Caterpillar’s Building
Construction Products (BCP) Division.

“The markets for smaller track-type tractors and mini hydraulic excavators have
evolved significantly in the past 30 years, with the majority of customers now located in
North America and Europe,” said BCP Vice President Mary Bell in a written statement. “Producing these machines at a North American location will put us in the best possible position to serve our customers in the building construction industry.”

Work at the new plant will include major fabrications, paint and final assembly.
The company also plans to have an on-site product distribution center for small track-type
tractors and mini hydraulic excavators produced at the new facility.

These machines are currently made at Caterpillar’s Sagami, Japan, facility. Once the transition to the new North American facility is completed, the Sagami plant will continue to serve a key strategic role in Caterpillar’s global growth strategy as a high-tech component facility.

The company says it will leverage the historical strengths in quality, product development, manufacturing and supplier collaboration at the Sagami facility with a particular focus on supporting the company’s growing Asia/Pacific operations.

“As we go through these final stages of determining a location for this new state- of-
the-art manufacturing complex, there are several important criteria,” Bell added in the written statement. “It will need to be a location that meets our requirements of optimizing product availability, minimizing logistics costs to our domestic and export customers, and that better positions Caterpillar to meet its overall business goals.”

The company says it hopes to make a final decision on the new facility’s location by the end of this year with construction to begin in the first half of 2012.

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