Oberhelman to retire in March; Umpleby named new CEO

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Caterpillar Inc. will undergo several changes at the top in the next six months, the company announced Monday.

Doug Oberhelman, chairman and CEO since 2009, will leave the CEO position at the end of the year and the chairmanship at the end of March, the company said. That will be less than a year before company policy would force him to retire at 65, anyway. He has been a Caterpillar employee for 41 years.

Oberhelman will be replaced as CEO by Jim Umpleby, a Caterpillar group president since January, 2013 and a 35-year employee of the company.

Then, in April 2017, Caterpillar director Dave Calhoun will become chairman of the board of directors.

The separation of the duties of chairman and CEO was decided by the Caterpillar board when it met last week. The two positions have been joined since 1990, when Donald Fites became chairman and CEO.

Caterpillar has often in the past named its new CEO months before the current leader retires in order to ensure a smooth transition, as was done before Oberhelman took over from Jim Owens. Caterpillar spokeswoman Rachel Potts said this situation is no different and that Oberhelman’s decision to retire was his own.

The announcement came just a day after the Wall Street Journal wrote a piece about how Oberhelman led Caterpillar to its highest earnings and profit ever in 2012, then watched it struggle through an unprecedented down cycle the last four years because of stagnation in the commodities market. In the article much was made of the fact Caterpillar, under Oberhelman, invested heavily in the mining industry, including the acquisition in 2011 of mining equipment manufacturer Bucyrus Inc., just before mining companies halted orders.

The last four years was the first time in Caterpillar history it has had that many consecutive years of decreased sales and revenues. Still, the company has remained profitable and has done well for stockholders with higher dividends, but it also has cut its workforce by more than 10,000 employees worldwide, including in central Illinois to cut costs.

In its news release, the company noted that Oberhelman “has reinvigorated the company’s focus on serving customers while also driving a culture of quality and safety.”

During his tenure, the company said:

"Our people have heard me say many times that my greatest responsibility as chairman and CEO is to manage Caterpillar for today and position the company and its future leaders for long-term success," Oberhelman said. "It has been an honor and a privilege to lead this company, and I am confident in the choice of my successor, Jim Umpleby."

"During the last four years, Caterpillar has faced unprecedented global economic conditions that have significantly impacted the industries served by our customers, as those industries and economic growth in many regions around the world have slowed or severely contracted. Faced with these challenges, our employees have responded like champions. We have improved our market position and grown our field population.

“Our product quality is at historically high levels, and I believe we are leading the industry in digital capabilities. I am confident that Caterpillar is stronger than ever, with product quality, power, technology and innovation that is the envy of our competitors. Add to that lean and agile manufacturing capabilities and an unrivaled global distribution channel. The future is bright," Oberhelman added.

Umpleby, 58, joined Caterpillar in 1981 when the company acquired Solar Turbines Inc. He’d been at Solar for less than a year at the time.

Since joining Caterpillar, Umpleby has worked numberous positions of increasing responsibility in engineering, manufacturing, sales, marketing and customer services. He served overseas assignments in Asia, including Singapore and Malaysia, from 1984 to 1990. He was named vice president of Caterpillar and president of Solar Turbines, which continues to be a wholly owned Caterpillar subsidiary, in 2010 and then was elected by the board as a group president in 2013. He has been over the company’s energy and transportation business since then.  

Umpleby was born Donald James Umpleby III in Highland, Indiana, a Chicago suburb, and earned a degree in mechanical engineering at Rose Hulman Institute in Terre Haute in 1980.

"For more than 91 years, Caterpillar equipment has been renowned for its quality, durability, innovation and value," Umpleby said. "I have been privileged to work with Caterpillar employees and dealers in supporting our customers as they develop the world's infrastructure and improve standards of living and quality of life. I look forward to leading our dedicated team as we build upon the accomplishments of those that have come before us."

Calhoun will be non-executive chairman of the board. He is senior managing director and head of Private Equity Portfolio Operations of The Blackstone Groups L.P. He has been a Caterpillar director since 2011.

"I am honored to take on these new responsibilities with Caterpillar, an iconic and global leader," Calhoun said in the news release. "Following a deliberate succession process, the Board confidently elected Jim as Caterpillar's next CEO. He reflects the best attributes of Caterpillar's culture and leadership. I also want to compliment Doug for his outstanding leadership as chairman and CEO, as the capstone to more than four decades of service. His leadership in the last four years has been remarkable as the company has successfully navigated an incredibly difficult cycle while positioning Caterpillar to take full advantage of the next upturn."

Umpleby’s replacement as group president will be named later.

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).