Caterpillar to end on-road dump truck production

Cat back-tracks and cuts anticipated assembly of trucks in Victoria, exiting the business entirely

Caterpillar's CT660, one of the model made by Navistar under the partnership begun in 2011.
Caterpillar's CT660, one of the model made by Navistar under the partnership begun in 2011.

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Caterpillar has announced its decision to discontinue production of its on-road dump trucks and exit the business in response to slumping demand for commercial trucks and construction equipment.

The announcement reverses a previous decision made by Cat to shift production of the line to Japan, and marks another turn in the series of aggressive cost-cutting measures enacted by the company.

Cat has been selling Navistar-built on-road trucks since 2011, but from 2016, was planning to have the parts manufactured in Japan before their export for assembly at its US plant in Victoria, Texas.

The US equipment giant, had hoped to leverage the strength of the Caterpillar brand in bulldozers and excavators to sell the same contractors the dump trucks as part of a consolidated fleet offering.

However, Cat truck sales have averaged only 1,000 vehicles a year, according to recent estimates.

The market’s confidence in Caterpillar slipped further in February after it reported that its sales for 2015 were down by 15% in 2015, making it the third consecutive year that its sales have fallen.

After the report, Cat cut a further 670 jobs from its workforce, including 350 at Caterpillar’s main campus in East Peoria, Illinois, and announced plans to close a further five plants.

In 2015, Caterpillar revealed plans to cut 10,000 jobs worldwide by 2018 and close up to 20 factories.

From June, the company is consolidating its electric power division and the marine and petroleum power division into a single business unit responsible for its entire provision of temporary power.

The company expects 10% lower 2016 revenues of $42bn, more than a third below the company’s peak of $65.9bn four years ago.

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