There’s no denying that Caterpillar Inc. is currently one of the most successful and widely recognized companies in the world. Established in 1925, the company first started as a manufacturer of steam tractors that were utilized in farming. Today, the company does not just produce and sell tractors, they also offer a wide selection of machinery and engines. They even sell insurance and financial products to their customers. Caterpillar Inc. is the leading manufacturer of construction machinery, mining equipment, and engines. Here are some interesting facts about this American company:
Caterpillar Inc.’s Origin
Although Caterpillar Inc. started officially as a business entity in 1925, the founder of the company—Benjamin Holt—has already been involved in manufacturing steamed tractors since 1892 under Holt Manufacturing Company. In the mid-1920s, the Holt Manufacturing Company suffered from financial troubles (probably because of the death of Benjamin Holt), which led to a merger with Best Tractor Company, owned by C.L. Best. On April 1925, the two companies officially merged and formed Caterpillar Tractor Company.
Benjamin Holt and His Inventions
Benjamin Holt, although he died 5 years before Caterpillar Tractor Company was founded, was considered as the company’s main founder. This American inventor is credited for patenting and manufacturing the first ever crawler-type tread tractor. His invention proved to be very helpful, especially in farming. He founded Holt Manufacturing Company, which was Caterpillar Inc.’s predecessor, in 1883.
Holt started experimenting with steam traction engine; his first experimental steam tractor was named Old Betsy and built in 1890. It had the capability of harvesting large fields with less cost incurred compared to horse-drawn tractors. In 1904, after spending some time in England, he successfully developed the first workable track-type tractor. The tractor was named Caterpillar after an onlooker suggested that it moved like a caterpillar.
Caterpillar’s Acquisition Strategy
Much of Caterpillar’s growth has been credited to the acquisition or takeover of a company and/or its assets. Since 1951, the company has ventured into more than 20 acquisitions. Among the companies and assets that they have acquired over the years are Trackson, Towmotor Corporation, Krupp MaK Maschinenbau GmbH, Shandong Engineering Machinery, and Electro-Motive Diesel, Inc.
Peoria, Illinois – Caterpillar’s Historical Home
Holt Manufacturing Company was based in Stockton, California, but they needed an additional plant to manufacture their steam tractors. In February 1910, the company opened a manufacturing plant in East Peoria, Illinois; it was managed by Holt’s nephew, Pliny Holt. The plant was incorporated by Holt as the Holt Caterpillar Company.
All products of Caterpillar are distributed in almost 200 countries through their 220 dealers. All of the dealers own and operate their business independently, with exclusive geographical territories. Presently, Caterpillar’s largest global distributor is Finning, which is based in Vancouver, Canada.
In the early 1980s, Komatsu—the Japanese construction equipment manufacturer—entered the American market and used the internal slogan “encircle Caterpillar.” During that time, Caterpillar has already established a name in the industry, but Komatsu believed they can drag the company down by capturing their territory. After a series of unfortunate events, including Komatsu’s competition, Caterpillar almost went bankrupt, but eventually recovered from their losses.