Caterpillar Exploring Strategic Alternatives on Various Mining Products
Aug. 21, 2016
Caterpillar announced in intends to pursue strategic alternatives, including a possible divestiture, for its room and pillar products that serve a segment of underground soft rock mining customers. The company said it plans to focus more on products with the greatest growth potential. Caterpillar will also discontinue production of track drills within its Resource Industries portfolio.The company said its dealers will continue its commitment to existing customers and will support the room and pillar and track drill fleets currently in operation. “These moves, which align with Caterpillar’s ongoing restructuring, will allow us to focus resources on those areas of the business that provide the highest, sustainable growth and best long-term results,” said Denise Johnson, group president with responsibility for Resource Industries. The room and pillar underground mining products under strategic review include continuous miners, feeder breakers, haulage systems, highwall miners, roof bolters, utility vehicles and diesel vehicles. Caterpillar plans to stop taking new orders on these products, production of track drills will be discontinued, and no new orders will be taken.“Caterpillar remains committed to an extensive mining product portfolio,” added Johnson. “We firmly believe mining is an attractive long-term industry, and we continue to invest in a broad range of products, both surface and underground. We are targeting our industry, and we continue to invest in a broad range of products, both surface and underground. We are targeting our investments within the mining product portfolio to concentrate on those areas with the highest profitability potential. At the same time, we continue to manage through the longest down-cycle in our history. We know these ongoing restructuring actions are not easy on our workforce. I’m grateful for our team’s ongoing dedication.”Regarding the workforce, Caterpillar expects to reduce the workforce in Houston, Pa., where the room and pillar products are manufactured. It will consider additional options such as possible closure of the Houston facility. The company expects to reduce up to 155 positions, including in Dennison, Texas, where track drills are produced. Caterpillar is also evaluating the most efficient use of its manufacturing footprint. It said it will repurpose its Winston-Salem, N.C., facility, transitioning it from a mining to a rail facility later this year. Operations will transfer to Progress Rail, a wholly owned Caterpillar subsidiary. The company will relocate the manufacturing of some components used in large mining trucks from its facility in Winston-Salem to its existing facility in Decatur, Ill.
