Cat to move truck production from Mexico to Texas

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Caterpillar Inc. announced Tuesday it will begin designing and manufacturing its vocation truck products on its own, with production to move from Mexico to Caterpillar facilities in Texas.

The move will create about 200 new jobs at the Caterpillar plant in Victoria, Texas, which now produces hydraulic excavators, the company said in a news release.

The new strategy for the vocational truck line is in line with the company's commitment to grow in the vocational truck industry, it said.

"The on-highway vocational truck product family is important to our product line; customers like our trucks and want to include them in their fleets in a variety of heavy duty applications such as dump trucks, mixers, haulers or one of the other configurations we offer," said Chris Chadwick, Caterpillar's director of the Global On-Highway Truck Group.

"To continue to provide the best solution for our customers, we will bring the design and manufacturing of this product into Caterpillar, and the production specifically to Victoria. Our updated strategy reaffirms our commitment to grow and develop our presence in the vocational truck industry moving forward," Chadwick said.

Caterpillar launched its first vocational truck, the CT660, in the North American market in 2011. Two more models have since been added to the lineup, the CT680 and CT681. To date, Caterpillar has worked with Navistar for the products' design and build, which are currently manufactured in Escobedo, Mexico.

"We appreciate the collaboration we have had with Navistar," Chadwick said. "As we look to future launches of new truck models, this updated strategy will better position us to help provide our customers with the best products and services for this market. Caterpillar continues to drive the design phase of all models, both current and planned. Before launching the product, we spent hundreds of hours on the road with customers, asking them to describe the ideal truck. We know what they want and need – from functionality of the truck itself to comfort in the cab. We plan to meet and exceed those expectations as we grow this product offering to fulfill our customers' needs."

The transition process will begin immediately, with production expected to begin in the first half of next year. Caterpillar Victoria will continue to produce excavators, and the addition of the vocational truck production is expected to add around 200 new jobs at the facility.

"Caterpillar Victoria is proud to be a part of this opportunity," said Ed O'Neil, general manager for operations for the Excavation Division. "The Victoria facility was selected because of our team's proven record of building high-quality Cat products, our commitment to safety and our successful implementation of the Caterpillar Production System and Lean manufacturing. In addition, support from the community and its excellent skilled workforce, as well as the proximity to suppliers, also contributed to the sourcing decision."

Caterpillar dealers will continue to sell and support Cat vocational trucks.

Vocational trucks can include dump trucks, cement mixers, waste carriers or other heavy-duty haukers.

The Caterpillar-Navistar partnership began in 2011. Navistar also announced on Tuesday it was going to develop its own line of PayStar vocational trucks, using some of the technologies it shared with Caterpillar, beginning in early 2016.

Also on Tuesday, Caterpillar announced it is going to repurchase $1.5 billion worth of its common stock under an accelerated stock repurchase transaction.

It's part of a plan authorized by Caterpillar's board of director in January 2014 to repurchase $10 billion of its stock by the end of 2018. To date, the company has repurchased about $3 billion.

"The continued strength of our balance sheet and strong cash flow allow us to return capital to stockholders despite weakness in the cyclical industries we serve," Caterpillar Chairman Doug Oberhelman said.

About the Author
Paul Gordon is the editor of The Peorian after spending 29 years of indentured servitude at the Peoria Journal Star. He’s an award-winning writer, raconteur and song-and-dance man. He also went to a high school whose team name is the Alices (that’s Vincennes Lincoln High School in Indiana; you can look it up).