Caterpillar Plans to Drop Lift Truck Production
PEORIA, Ill. (AP) _ Caterpillar Inc. would give up its lift truck manufacturing business under a tentative agreement with Mitsubishi Heavy Industries Ltd. of Tokyo.
The tentative pact would create a subsidiary to design, manufacture and distribute lift trucks. Mitsubishi would be majority owner with 80 percent equity and would make all operational decisions.
As a result, Caterpillar would transfer control of 390 white collar workers in Mentor, Ohio, to Mitsubishi and phase out lift-truck production at Caterpillar plants in Leicester, England, and Monterrey, Mexico.
″Essentially, we’d be minority partner with a 20 percent share in the company,″ Caterpillar spokesman Dick Stober said Wednesday. ″Mitsubishi will call all the shots. Although it’s tentative, we believe this joint venture is likely to happen.″
The Mentor personnel include marketing, accounting and engineering executives with the company’s lift truck subsidiary, Caterpillar Industrial Inc.
The joint venture’s headquarters would remain in Mentor, Stober said.
Caterpillar also will contribute all lift truck inventory, parts and expertise to the venture in exchange for an undisclosed cash payment from Mitsubishi as compensation for the assets.
″Turning this over to the joint venture will allow us to concentrate on other areas of our business,″ Stober said.
Lift trucks and parts built by the joint venture would be distributed under both the Mitsubishi and Caterpillar brand names through the two companies’ worldwide network of dealers.
Caterpillar Industrial currently builds 96 models of lift trucks and automated guided vehicles.
In England, Caterpillar has about 1,100 employees building lift trucks and backhoe loaders. Stober said Caterpillar may shift production of other equipment to Leicester or expand its parts distribution facility there to protect the 450 affected workers.
In Mexico, Caterpillar has about 1,200 employees building lift trucks and a variety of blades, rippers and bulldozer components.
Caterpillar plans to continue building rough-terrain lift trucks in Mexico, and no impact on the work force is expected.
Mitsubishi manufactures the trucks in Houston and in the Netherlands. The two corporations already operate a joint venture established in 1963 called Shin Caterpillar Mitsubishi Ltd., based in Tokyo.
That company is a 50-50 partnership and designs and manufactures various models of construction equipment sold primarily in Japan.