Why Caterpillar's profits are plummeting

CM1995 · Apr 30, 2013

Oxbow said:
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.

Personally I love gas appliances, especially a stove and have several gas appliances at home. What I meant about the increasing utility bills is in the areas where the coal plants will be retrofitting to nat. gas, will pass on those costs of plant upgrades to their customer. Most of our power plants are coal fired in my area with a few hydro plants thrown in. Southern Company is the parent company of AL, GA and MS power which has some of the lowest rates in the country as well but they will be able to pass along any costs associated with capital expenditures.

Oxbow said:
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!

I agree Cat does has it's nose to the economic ground, they are very good at predicting future trends in the equipment business. Some may call this cold hearted by closing plants and laying off workers but that's what happens when business patterns changed. My business pattern changed dramatically in 2008 and I am just getting started 5 years later working back to where I was - I feel the pain business cycles inflict and have sympathy for the lost jobs.

Esfoder · May 3, 2013

I disagree. At least in my case the customer service is lacking at my local dealerships. The John Deere dealer is the way CAT was in the 70s.Matter of fact I still have 5 CAT wheel loaders 1 928 F 2 966 Bs a 966F a 970FCAT and a 769 B haul truck also a 426 Back Hoe, I will keep them but the new machines I buy will be from John Deere because the customer service is so much better. Funny thing is they don't even seem to care that we are not buying from them anymore? I'm not a billion dollar a year corperation so not worth the effort I guess?

Gavin84w said:
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.

CM1995 · May 3, 2013

Esfoder said:
I disagree. At least in my case the customer service is lacking at my local dealerships. The John Deere dealer is the way CAT was in the 70s.

Dealerships are like anything else, some good some bad even with the same brand. It's a shame your Cat dealer has went backwards in the customer service department.

My Cat dealer is top notch, both the tractor sales side and rental store. I haven't bought a new machine in 6 years but they treat me like I own a large fleet ( I currently only have 4 pieces of Cat iron). I know many in the corp. structure and good friends with some - this obviously has something to do with it but it works for me.

Esfoder · May 3, 2013

CM1995 said:
Dealerships are like anything else, some good some bad even with the same brand. It's a shame your Cat dealer has went backwards in the customer service department.

My Cat dealer is top notch, both the tractor sales side and rental store. I haven't bought a new machine in 6 years but they treat me like I own a large fleet ( I currently only have 4 pieces of Cat iron). I know many in the corp. structure and good friends with some - this obviously has something to do with it but it works for me.

Yes I believe your right. I still own more CAT iron than anything else and buy parts from them. I won't name the dealership out of respect but the "other guys" are doing a much better job. The equipment is about the same as far as I can tell. At the end of the day they move the same amount of material and cost the same to maintain.

Nige · May 3, 2013

I suggest your comments should go further than simply posting your experiences on here. You local Cat area office is in Seattle and if you want it made known you're not happy with your dealer (who effectively is "Cat" as far as you're concerned because you never get an opportunity to interact with Cat Corporate) then I can probably give you a name of someone to talk to. In my experience Cat takes negative comments about dealer support to customers very seriously.

Esfoder · May 3, 2013

That would be great Nige. You can PM the info too me if you like.

Dusty

Kman9090 · May 5, 2013

You guys are also missing a big key factor, look at all the companies and mines shutting down or going out of business. I mean Lambrecht had almost 600 pieces of late model equipment that hit the market and that is just one company. There are a lot of nice used equipment on the market these days from all the sales.

Gavin84w · May 5, 2013

Kman9090 said:
You guys are also missing a big key factor, look at all the companies and mines shutting down or going out of business. I mean Lambrecht had almost 600 pieces of late model equipment that hit the market and that is just one company. There are a lot of nice used equipment on the market these days from all the sales.

Yes, that is a huge factor that no one considers, i know used equipment for sale in the case of 1 small model of elevating scraper was a huge factor in it being dropped from the line, if there are 5 or 600 of a certain model for sale used how many new sales do you think will come through the door, sure there would still be some but if you had experienced a couple years declining sales of new it most likely ain,t gunna pick up again.

mudober · May 5, 2013

Around here the pull pans and tractors move dirt. About the only place you see a wheel scraper is on a coal stockpile. I also believe that tier 4 emissions is hurting new equipment sales. I know this for sure on the farm tractors as no one wants to have to buy the def fluid, its just ridicules to have all the emission bull **** here in the U.S. like we are the only ones polluting the world.

Esfoder · May 6, 2013

mudober said:
Around here the pull pans and tractors move dirt. About the only place you see a wheel scraper is on a coal stockpile. I also believe that tier 4 emissions is hurting new equipment sales. I know this for sure on the farm tractors as no one wants to have to buy the def fluid, its just ridicules to have all the emission bull **** here in the U.S. like we are the only ones polluting the world.

I agree.

RayF · May 6, 2013

Its worth remembering that Cat is a global company. I myself have never seen a towed pan. People I line bore for have had typicaly a fleet of 50 plus 631's and 637's. All those cushion hitches to bore

IronworkerFXR · May 6, 2013

Is'nt this the hope and change ?? ya all I got is a little change in my pocket....

61BG · May 6, 2013

I honestly think that a large corporation & it doesn't matter who, CANNOT sustain or maintain RECORD profits year after year, forever & ever. Lets call it the Apple syndrome. At some point in time the records cannot be beat & a realization comes into effect as in good profits but not record profits, it just cant continue forever. I do see that Deere & Komatsu are still doing well yet not at the same pace as previously. Also, the used equipment market affects ALL repeat ALL manufactures not just ONE, so you cannot blame all of Cats problems on the used market as some have said "no one seems to consider"...

Dozerboy · May 7, 2013

That goes for everyone not just large corporations.

surfer-joe · Jul 11, 2013

Mining markets in China and Australia are both down causing some slippage on equipment orders. Mining in the USA and Canada also down a bit. Large machine use for highway and dam construction is practically non-existent.

Caterpillar quit being a worker oriented company in 1975 or soon after. Old management went out and new management were oriented toward stockholders and profits. Cat began a very confrontational attitude with it's unions then that exists today as well. In other words, employees are just something you use til you don't need them anymore, then they get tossed. Robotization became a huge factor as well. Just don't see many humans in a Cat plant anymore.

Cat has fought the good fight with off-shoring manufacturing, but as we all knew, when labor, material costs and regulations and shipping costs caught up with the western world, where do you go then for cheap labor?

catken · Jul 15, 2013

When only 30% of your business is in the USA what do you expect? I also believe the attitude was on both sides. Automation is no different. If you want to stay in the fight, you have to up-date. Its facts and life in todays world. Cat was also predicting the down turn.

Oxbow · Jul 15, 2013

I visited the dozer assembly plant in Peoria (D6 through D11 if I recall correctly) some years ago. Very impressive site! I was struck (visually, not physically) buy the site of one of the technicians that was wearing a John Deere hat. That fellow really has loyalty to his employer now, eh?

Mjrdude1 · Jul 16, 2013

In our little corner of the world, Cat scrapers are being replaced with Deere pull scrapers. I hate em, but they do move dirt cheaper than the Cats do (at least on paper) lol.

The construction economy is in the toilet, dirt jobs go so cheap that we don't even bid on some of them anymore. We are adjusting and doing lots more demo work now days. I hate that too, it's hard on equipment etc, but gotta keep the doors open somehow.

Until our administration gets off it's butt and starts passing bills on infrastructure repairs, it's not going to get any better I fear.

Why Caterpillar's profits are plummeting

CM1995

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Esfoder

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CM1995

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Esfoder

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Nige

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Esfoder

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Kman9090

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Gavin84w

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mudober

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Esfoder

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RayF

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IronworkerFXR

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61BG

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surfer-joe

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catken

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Oxbow

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