Caterpillar Reorganizes for Leaner Mining, Customer and Dealer Support Divisions

Reduction in Distribution Services Divisions from three to two will focus on Across the Table strategy; new Global Aftermarket Solutions, Wear Components, Marketing and Digital divisions formed

Convergence of market challenges lead by declining energy and mining sector business lead to Caterpillar slashing its 2015 revenue outlook by 20% to $48 billion, and an early forecast of 2016 revenue anticipates another 5%, or $2.5 billion, drop.
Convergence of market challenges lead by declining energy and mining sector business lead to Caterpillar slashing its 2015 revenue outlook by 20% to $48 billion, and an early forecast of 2016 revenue anticipates another 5%, or $2.5 billion, drop.
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Caterpillar Inc. today announced a reorganization in its dealer and customer support divisions. These changes are designed to improve and speed the delivery of customer support while simplifying the way Caterpillar interacts with its global dealer network. 

“These organizational changes will drive needed simplicity to the business, further enabling us to meet customer and dealer needs by becoming more nimble, lean and responsive,” said Rob Charter, Caterpillar group president with responsibility for Customer & Dealer Support. “Our dealers are the best in the industry when it comes to knowing and serving our customers. These changes will help Caterpillar increase accountability at the divisional level and continue to differentiate the Caterpillar business model from our competitors.” 

Caterpillar Announces Plans Targeted to Cut $1.5 billion in Annual Costs

The company is also placing added executive office emphasis on three strategic initiatives – data analytics, digital and innovation capabilities; Lean Transformation; and the Across the Table initiative. Having this additional, executive office focus complements the new structure of the customer and dealer-facing divisions.  

Mining Division Changes  

As previously announced, Chris Curfman, vice president with responsibility for Caterpillar’s Mining Sales & Support Division, is retiring effective December 31, 2015. His division will be integrated into the existing Global Mining machine business divisions. Bringing product, operations, sales and marketing organizations together in both the surface and underground mining applications aligns well with our customers and will also enable a more effective cost structure in a challenging mining environment.

The surface mining sales and support teams will join the Hauling & Extraction Division, which will be renamed the Surface Mining & Technology Division, led by Caterpillar Vice President Tom Bluth.

The underground mining sales and support teams will join the Material Handling and Underground Division, led by Caterpillar Vice President Denise Johnson.   

Customer and Dealer-facing Organizational Changes   

The company is reorganizing divisions across the company into a new structure that will improve efficiency and reduce complexity. This new organizational structure will enable the company to more quickly deliver on its previously announced Across the Table goals.

“Our team will be more responsive, agile and better positioned to work with our dealers as we serve our customers,” Charter said.

· Distribution Services Divisions – the primary interface with our dealers, these divisions will remain but be reduced to two from three. The two groups will maintain sole responsibility for dealer development and performance, succession and continuity, along with portfolio management, operational excellence and Across the Table strategy execution.

  • Asia Pacific, CIS, Africa & Middle East Distribution Division, Vice President Raymond Chan – covers dealers in Asia-Pacific, CIS, Africa and the Middle East.
  • Americas & Europe Distribution Division, Vice President Phil Kelliher – covers dealers in North and South America and Europe.

· Global Aftermarket Solutions Division, Vice President Nigel Lewis – new organization created to accelerate the growth of aftermarket sales and service solutions. This organization combines the aftermarket sales and marketing resources, with a focus on improving and growing aftermarket sales and service for Resource Industries, Construction Industries and Energy & Transportation, including Cat Work Tools and Cat Reman products.

· Wear Components & Aftermarket Distribution Division, Vice President Doug Hoerr – new division that merges the design and manufacturing of components and aftermarket distribution into one division to enhance the company’s focus on components availability and inventory improvements. This organization will be closely aligned with the Global Aftermarket Solutions Division to ensure product offerings meet or exceed customer and dealer expectations. 

· Marketing and Digital Division, Vice President George Taylor – newly created division that builds on the current Analytics & Innovation Division. Taylor, who has also been named Caterpillar’s Chief Marketing Officer, and his team will establish a go-to-market strategy for the integration of data analytics, providing state-of the-art solutions and support for customers and dealers. In addition to the digital transformation of the dealer and customer experience, the division’s functions include global brand management, marketing, rental services and retail sales development.           

· Sustainable, Work Tools & Industry Solutions Division, Vice President Greg Folley – new division that brings together the sustainable businesses of Cat Reman and Caterpillar Safety Services with the company's machine attachment business – Cat Work Tools (design and manufacture). The new division also includes two external sales groups, Cat OEM Solutions and Defense and Federal Products.

Construction Industries Update

In addition to these changes, the Global Construction & Infrastructure Division, led by Vice President Paolo Fellin, has added responsibilities. As part of the company’s move to improve its dealer and customer coverage model, the division will also assume sales responsibilities for work tools, industrial and waste, paving and forestry products, as well as responsibility for heavy rentals.

The above moves will be effective November 1, 2015.

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