Why Caterpillar's profits are plummeting

[Shenandoah]

From the interwebs...

"Caterpillar Inc., the largest maker of life-size sandbox toys in the world, has reported a sharp slide in profits for the second quarter in a row, as demand for mining equipment takes a steep downward turn."

http://news.yahoo.com/why-caterpillars-profits-plummeting-112500131.html


Just a FYI...hope this is the proper section...

 

[Nige]

Good - maybe the delivery times for new machines will come down from "Out of this World" to simply "Long" .................

We're being quoted 18 months delivery on new large-size Haul Trucks - 3 years ago it was 8 weeks....!!

 

[christinecambel]

Wow, they plan to cut 2,000 jobs.

 

[ih100]

Wow, they plan to cut 2,000 jobs.

No, they have already, plus 9000 temporary workers have gone.

 

[Colorado Digger]

I have not read the article yet but apparently the European crisis is quite serious. This probably has something to do with it. I think global mining is up and other markets are doing better as well.

 

[Mike L]

Where are the jobs being cut?

 

[ih100]

Where are the jobs being cut?

Everywhere. Mining sales have taken the biggest hit.

 

[rare ss]

Good - maybe the delivery times for new machines will come down from "Out of this World" to simply "Long" .................

We're being quoted 18 months delivery on new large-size Haul Trucks - 3 years ago it was 8 weeks....!!

you'd think so, but it seems it's goes the other way.. companies would rather sack the staff and drop output than cranking up production to drop delivery times

 

[CM1995]

The coal mines in my area have all but shut down. Local Cat dealer is expecting a major sales reduction in heavy mining equipment which amounted to small numbers of machines sold but a large % of their annual volume, they are bracing for the downturn.

Met coal is still somewhat stable but furnace coal has taken a hit.

 

[catken]

Tks to the world slow down and the enviros. Forecast say another year and things will pick up. Cats purchase of be and new plants is
another reason but will really show up in a matter of time. The mining outside us will increase in the near future and cats purchase of be
will really increase their market share. It's a global factor-our leadership in this country can resolve alot of it but the administration
doesn't seem too interested (taxes). Don't worry-cat will more than survive.

 

[Nige]

We just went out for quote on a fleet of close to 100 construction equipment machines and were quoted 24-32 weeks delivery ex-factory depending on model and based on receipt of a confirmed order.

 

[Steve Frazier]

I'm not sure why this would come as a surprise. The economy has been crap for 5+ years now and it effects everyone. My local Cat dealer used to have their yard stuffed with machines, now you can see more pavement than equipment. Everyone has had to tighten up by reducing costs, which would include reducing the number of unsold machines on hand. I hope they do survive, but there are no guarantees in today's world.

 

[Nige]

Steve, in the mining business I would not necessarily agree with you. After the crash in 2008-9 delivery times dropped like a stone, despite the factory laying off thousands of workers. For example in 09 we could get 200-ton haul trucks on 8 weeks delivery ex-factory from a confirmed order. However by 2011 mining was booming on the back of high gold & base metal prices and deliveries for the same model of truck had gone up to 14 months. Now gold & base metals are declining again (gold alone is down 20% this month) so I would expect delivery times to come down, at least initially, until the reduction in workforce takes effect and they start to go back up again.

 

[John C.]

I don't recall Cat ever bringing work force back on after 2008. It was my impression that they dropped personnel levels to a bottom point and are only hiring replacements. I know D11 and D10 orders were eighteen months to two years out a couple of years ago. You couldn't find a decent one to rebuild even. Now these machines are being advertised all over the US.

I've heard that the influx of natural gas is becoming a big reason coal fired generating plants are shutting down and coal mining is taking the hit. In this part of the country the western coal mines are shooting big at exporting to China if they can get new port facilities past the greenies. There is also lots of noise around here that the tar sand oil is too costly environmentally. As long as my lights and stove work, I don't much care where my electricity comes from.

 

[CM1995]

I've heard that the influx of natural gas is becoming a big reason coal fired generating plants are shutting down and coal mining is taking the hit.

I agree, I think it's a double whammy of a glut of natural gas and the EPA's never ending regulations on coal fired plants. We'll see the majority of coal fired power plants shift to natural gas in the coming years and the costs passed along monthly in our mailbox.:cool2

 

[RayF]

It seems to be a cycle that goes around. For the past 5 or 6 years here in West Oz its been flat out. Every contractor was knocking back work. Now its the other way round.I have my competitors calling me to see if I have anything to spare. They all thought the work would go on for ever. I think my total this month will be boring a EX200 quick hitch and links.

 

[Nige]

I can find you plenty of work. Fancy a vacation .......??

 

[Esfoder]

My guess is that their competition has cought up with them and in some parts passed them. I know I get much better service out of my local John Deere dealer than the Cat shop. My family was pure Cat fore 40 years. We go with JD now. Last 4 machines we have purchased have been JD and could not be happier.

Dusty

 

[Gavin84w]

My guess is that their competition has cought up with them and in some parts passed them. I know I get much better service out of my local John Deere dealer than the Cat shop. My family was pure Cat fore 40 years. We go with JD now. Last 4 machines we have purchased have been JD and could not be happier.

Dusty

Got nothing to do with competition, look around all suppliers are down, it,s the cycle that comes and goes and everyones profits drop off.

 

[Oxbow]

I agree, I think it's a double whammy of a glut of natural gas and the EPA's never ending regulations on coal fired plants. We'll see the majority of coal fired power plants shift to natural gas in the coming years and the costs passed along monthly in our mailbox.:cool2

CM, some of us are fortunate to be the benificiary of the natural gas glut. Our home heat, water heater, and stove is natural gas, and our bill for that utility has been going down the last couple of years. We are also fortunate to have very low electricity here due to the amount of hydro plants in the area.

On the down side of that, the natural gas drilling around Pinedale, WY has slowed down to a crawl due to the abundance of existing supply, so less work.

Our local Cat dealer told me 2 years ago that they (CAT globally) were anticipating a considerable slow down about now, evidently their prognosticators are pretty sharp!