Caterpillar update: Still crawling

EA highlights 4 points of impact from expected downsizing

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It has not been a good week for Caterpillar, Inc.

The brand has suffered a number of unprecedented- if expected- difficulties that now accompany the impending layoffs it announced last week, and the industry waits with bated breath, wary that any of them could provide the potential knockout blow.

  1. The first notable repercussions come from in-house. On Monday, Caterpillar’s  VP of mining operations announced his formal resignation. Chris Curfman was the vice president and also presided over responsibility for the Mining Sales & Support Division. His resignation will go into effect at the end of the calendar year. He leaves one of the sectors cited as a reason for last week’s layoffs- due to marketplace difficulty. Curfman was a 20-year veteran of the company with experience in many divisions and influence on multiple Caterpiller businesses. Beginning as the rental and used equipment manager for the North American division in 1994, he was also the managing director of Caterpillar of Australia Ltd. for two years, then quickly moved up to managing director of marketing for the Asia Pacific Division, before ascending to his current position in 2004. The family’s legacy is cemented in the company prior to his work; Curfman’s father was a 40-year employee of the company.

Does Curfman’s resignation symbolize a flight of seasoned employees who know that this will only get worse?

2. The ripple effect, from an industrial scope, is starting to carve deeper as well. The companies’ parts suppliers are also being hit hard- a byproduct of the plunge that has been simmering beneath the surface all year. A Reuters report last Friday pinpointed this, with Cedar Rapids-based supplier J-TEC as an example. J-TEC had used Caterpillar as its chief customer for years, and this year could mark its worst in history. J-TEC Chief Executive Officer Gary Roling said Caterpillar, his single largest customer, had recently pushed back a big order due this month to December.

“We’ve been selling to Caterpillar for a long, long time, and this year will likely be the lowest year for sales we’ve ever had,” said Roling, whose company makes tools to measure the flow of fuel, exhaust and other gases.

3. Regional dialogue on the job cuts’ effect on a state level has also begun. Illinois, Alabama, and Iowa are three primary players in this regard.’s Kelly Poe reported that “Caterpillar isn’t detailing where or what sort of jobs will be affected or which facilities will be consolidated or closed – but Caterpillar employs about 700 people in Alabama”, detailing the overall sense of unease in that state. She mentions the similar reductions made by Birmingham, AL companies Walter Energy and U.S. Steel in relation to the Caterpillar cuts. Ziegler CAT, the division of Caterpillar that serves Iowa and Minnesota, is expected to be heavily burdened as well. And the “home state” of the construction giant will likely experience one of the most impactful drop-offs. Caterpillar is based in Peoria, Illinois.

4. Lastly, Stock market watchers all agree: the Caterpillar situation is disastrous for investors. One financial analysis website dissects “3 reasons to sell” the stock, a week after the initial news.

A CNBC chart clearly depicts the recent Caterpillar plunge from a market perspective.

A CNBC chart clearly depicts the recent Caterpillar plunge from a market perspective.

Most are rating it as a ‘hold’ due to the insecure position the company has found itself in. CNN World Economy expert Daryl Guppy reflects on the company’s recent demise as part of a bigger picture. He says the “sustained fall” in the company’s market value is a representation of a larger issue. “Caterpillar is the perfect proxy for the infrastructure build required to sustain the world economy. When economies are booming, Caterpillar is climbing”.

For the foreseeable future, it has slowed to a crawl.



  1. No Butterfly Zone | Electrical Apparatus Magazine - December 22, 2016

    […] A long, bleak march of downsizing began last fall for Caterpillar, Inc., and this month it swept through the midsize city of Peoria, Illinois. An undisclosed number of Caterpillar employees at the company’s Peoria plant received layoff notices the second week of December as part of a workforce reduction and restructuring that was announced last September. […]

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