Caterpillar to expand capacity

01 July 2008

Caterpillar Inc has said it will spend $1 billion over the next two years to expand capacity in five of its Illinois factories, and will shift production at some of its plants.

The company did not specify how many jobs, if any, would be affected by the changes.
Peoria (Illinois-USA)-based Caterpillar, one of the world’s largest heavy equipment manufacturers, said the expansion is necessary to meet demand for machines used mostly in mining and large infrastructure projects.
“This is certainly very positive news for the Illinois communities where we operate as we invest today to strengthen our global leadership position in the industries we serve and to maintain our ability to profitably compete in the global economy,” Caterpillar chairman and CEO Jim Owens said in a statement. “This restructuring and capital investment in critical North American operations demonstrates our optimism about the global markets we serve.”
The investment plan will include capacity increases in its East Peoria plant for track-type tractors  and pipelayers and for off-highway transmissions; large off-highway truck production expansion in Decatur; wheel loaders and excavators manufacturing increases in Aurora and components production increases in Joliet.
Separately, Caterpillar said it was partnering with Warrenville-based Navistar International Corp to develop medium and heavy-duty trucks. The two also plan to develop engines that can be used for vehicles such as school buses and utility trucks.
Caterpillar also said it is considering shifting some production because of its decision not to supply truck engines compliant with new Environmental Protection Agency standards taking effect in 2010.
The engines are mostly produced in Mossville, and Greenville, SC, where the company said capacity was far greater than expected future demand.
Caterpillar is now considering opening a new plant to produce off-highway heavy-duty engines currently produced in Mossville.
The company is also looking for an alternative US location to build a motor grader production plant to support its expanding off-highway truck capacity expansion. The plant is currently set in Decatur.
To meet expanded capacity in East Peoria, Decatur and Aurora, the company said it is considering moving lower power train production to other US locations.
Caterpillar is also considering outsourcing tube manufacturing with a US supplier related to its wheel loaders and excavators produced in Aurora.
The company is also weighing moving some other manufacturing operations into its Mossville plant, and is considering building a new machinery and engine product design centre for larger products in the area.

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