‘Tractor’ No Longer Describes Us: Caterpillar
PEORIA, Ill. (AP) _ Caterpillar Tractor Co., ironically on the eve of introducing its first tractor exclusively for the farm, says that, after 61 years, it no longer wants the word ″Tractor″ in its name.
The word does not aptly describe Caterpillar’s diversified line of products, the world’s leading maker of earthmoving and construction machinery said in a surprise announcement Wednesday.
Caterpillar is asking stockholders to ratify changing the company’s name to Caterpillar Inc. when they gather April 9 in San Francisco for their annual meeting.
In a proxy statement to owners of 98.3 million shares of common stock, the company also asked shareholders to adopt various bylaw changes aimed at heading off any hostile takeover bids - including moving the company’s legal charter to Delaware from California, where Caterpillar incorporated in 1925.
With Caterpillar’s stock up 70 percent, to about $50 a share, over last year’s low, some analysts said a takeover attempt would seem unlikely just now.
″The word Tractor in the company name has become less and less descriptive of its products,″ the Peoria-based Caterpillar said in a statement. ″Over the years, the company’s machine lines have been greatly expanded″ to include diesel and turbine engines and lift trucks, and the company also is moving into fields such as financial services and insurance.
One new field the company hopes to enter is farming. Caterpillar has said its first farm tractor should roll off the assembly line this year.
Most people rarely use the word ″tractor″ when referring to Caterpillar, Illinois’ largest manufacturing employer. It usually is called just Caterpillar or Cat, for which it holds a registered trademark.
Caterpillar dominates this industrial Illinois River area of 350,000 people. It employs 18,000 at five area factories and its downtown Peoria headquarters, and is responsible for untold other local jobs at supplier and allied companies. A half-decade ago, the company employed 37,000 Peoria-area people.
The proxy statement said moving the company charter to Delaware would help it ″respond to unsolicited takeover proposals from a position of strength.″
It said California law prohibited - while Delaware allowed - certain anti- takeover measures, nicknamed ″poison pills,″ that Caterpillar’s directors hope to add to company bylaws.
Proposed changes include: eliminating cumulative shareholder voting; forbidding the removal of directors without cause, except with approval by owners of at least 75 percent of all shares of stock; electing directors to staggered terms; and requiring shareholder action be taken only at a meeting.
Adopting the changes ″may have the effect of discouraging future takeover attempts which are not approved by the board (of directors),″ Caterpillar’s statement said.
A news release accompanying the proxy to shareholders quoted Caterpillar Chairman George Schaefer and President Peter Donis as each saying: ″We aren’t aware of any pending or threatened takeover attempt against the company. However, in light of recent hostile takeover developments involving other companies, the board feels the adoption of these proposals is prudent.″
Caterpillar also announced a $1 billion, five-year program to upgrade its manufacturing and engineering technology.
The company said the money for the advanced technology would come mostly from savings generated by the improvements themselves.
Caterpillar also released its annual report to stockholders for fiscal 1985, recapping its first profitable year since 1981. Caterpillar earned $180 million last year, following three straight years of losses totalling $950 million.