In Navistar split, Cat to integrate with construction equipment

Cat-CT680-1Cat CT680

Caterpillar has decided to amicably end its on-highway truck production partnership with Navistar and venture out on its own, and it will move production of the Cat C-series trucks, which The Wall Street Journal estimates to be about 1,000 units a year, to a shared production facility in Victoria, Texas. The plant currently produces Caterpillar hydraulic excavators and will add about 200 additional jobs as the truck production line ramps up.

Caterpillar made the decision to bring its truck production in-house, says Cat’s Chris Chadwick, to better serve its yellow-iron oriented customer base. “There is a lot of integration throughout our construction equipment line,” he explains. “And it will be a lot easier for us to continue to fully integrate our trucks with our construction machinery if we take full control of the manufacturing process. It also better places us to serve our customers’ needs in a quicker and more satisfactory manner.”

The break with Navistar is significant, Chadwick notes, but not absolute. “The majority of the truck parts used on our CT Series are outsourced from various suppliers and we will purchase and use the very same components with our truck that Navistar does today,” he says.

One exception, however, is under the hood. Noting that Caterpillar has “no plans” to re-enter the on-highway engine business, Chadwick says for now, Caterpillar will continue to spec the Navistar-built CT13 13-liter diesel engine for its C-Series trucks. “The big hole for us right now is obviously the lack of a 15-liter engine,” he says. “But we have a strategy in place to add a 15-liter option before year’s end and will offer more details on that in the fall.”

Chadwick says the addition of the 15-liter engine option will close out the primary phase of Cat’s C-Series product launch. “From that point, we’ll begin the process of new features and technologies to continue to build the brand.”

Those efforts will see increased sales efforts in Canada and Latin America, he notes, while Caterpillar will continue to monitor truck markets around the world to seek additional overseas sales opportunities if they make sound financial sense.

“Caterpillar is in a unique position to serve the construction industry,” Chadwick explains. “There isn’t another truck OEM out there that can tie one set of solutions for construction machinery to its on-highway solution the way we can. Coupled with the significant competitive advantage offered by our dealer network, we felt this move was the best way to leverage all of these assets and make sure we continue to offer the best vocational truck options available to our loyal customer base.”