Caterpillar to Open Mini Hydraulic Excavator and Small Track-Type Tractor Manufacturing Facility, Creating More Than 1,000 New Jobs in North America

PEORIA, Ill. — As part of a strategic decision to move production closer to the majority of customers who use these products, Caterpillar Inc. (NYSE: CAT) announced today that it plans to open a new manufacturing facility in North America for small tracktype tractors and mini hydraulic excavators. The decision to shift production from Japan is driven by proximity to a large base of customers in North America and Europe.

The North American facility will become Caterpillar’s global source for small track-type tractors. For mini hydraulic excavators, the new facility will provide completed machines for customers in North and South America. In addition, the company also plans to export partially assembled mini excavator base units to a facility in Europe, where final assembly will take place, improving delivery times for European customers.

When fully operational and at capacity, the North American facility is expected to employ more than 1,000 people. The facility will be part of Caterpillar’s Building Construction Products (BCP) Division.

“The markets for smaller track-type tractors and mini hydraulic excavators have evolved significantly in the past 30 years, with the majority of customers now located in North America and Europe,” said BCP Vice President Mary Bell. “Producing these machines at a North American location will put us in the best possible position to serve our customers in the building construction industry,” Bell added.

Work at the new plant will include major fabrications, paint and final assembly.
The company also plans to have an on-site product distribution center for small tracktype tractors and mini hydraulic excavators produced at the new facility. These machines are currently made at Caterpillar’s Sagami, Japan, facility. Once the transition to the new North American facility is completed, the Sagami plant will continue to serve a key strategic role in Caterpillar’s global growth strategy as a high-tech component facility.

The company will leverage the historical strengths in quality, product development, manufacturing and supplier collaboration at the Sagami facility with a particular focus on supporting the company’s growing Asia/Pacific operations.
“As we go through these final stages of determining a location for this new stateof- the-art manufacturing complex, there are several important criteria,” Bell said. “It will need to be a location that meets our requirements of optimizing product availability, minimizing logistics costs to our domestic and export customers, and that better positions Caterpillar to meet its overall business goals.”

The company hopes to make a final decision on the new facility’s location by the end of this year with construction to begin in the first half of 2012.

About Caterpillar:
For more than 85 years, Caterpillar Inc. has been making sustainable progress possible and driving positive change on every continent. With 2010 sales and revenues of $42.588 billion, Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company also is a leading services provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services, Caterpillar Logistics Services and Progress Rail Services. More information is available at: http://www.caterpillar.com.

Forward-Looking Statements
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It is important to note that Caterpillar’s actual results may differ materially from those described or implied in its forward-looking statements based on a number of factors, including, but not limited to: (i) global economic conditions and economic conditions in the industries and markets Caterpillar serves; (ii) government monetary or fiscal policies and government spending on infrastructure; (iii) commodity or component price increases and/or limited availability of raw materials and component products, including steel; (iv) Caterpillar’s and its customers’, dealers’ and suppliers’ ability to access and manage liquidity; (v) political and economic risks associated with our global operations, including changes in laws, regulations or government policies, currency restrictions, restrictions on repatriation of earnings, burdensome tariffs or quotas, national and international conflict, including terrorist acts and political and economic instability or civil unrest in the countries in which Caterpillar operates; (vi) Caterpillar’s and Cat Financial’s ability to maintain their respective credit ratings, material increases in either company’s cost of borrowing or an inability of either company to access capital markets; (vii) financial condition and credit worthiness of Cat Financial’s customers; (viii) inability to realize expected benefits from acquisitions and divestitures, including the acquisition of Bucyrus International, Inc.; (ix) international trade and investment policies, such as import quotas, capital controls or tariffs; (x) the possibility that Caterpillar’s introduction of Tier 4 emissions compliant machines and engines is not successful; (xi) market acceptance of Caterpillar’s products and services; (xii) effects of changes in the competitive environment, which may include decreased market share, lack of acceptance of price increases, and/or negative changes to our geographic and product mix of sales; (xiii) union disputes or other employee relations issues; (xiv) Caterpillar’s ability to successfully implement the Caterpillar Production System or other productivity initiatives; (xv) adverse changes in sourcing practices of our dealers or original equipment manufacturers; (xvi) compliance costs associated with environmental laws and regulations; (xvii) alleged or actual violations of trade or anti-corruption laws and regulations; (xviii) additional tax expense or exposure; (xix) currency fluctuations, particularly increases and decreases in the U.S. dollar against other currencies; (xx) failure of Caterpillar or Cat Financial to comply with financial covenants in their respective credit facilities; (xxi) increased funding obligations under our pension plans; (xxii) significant legal proceedings, claims, lawsuits or investigations; (xxiii) imposition of operational restrictions or compliance requirements if carbon emissions legislation and/or regulations are adopted; (xxiv) changes in accounting standards or adoption of new accounting standards; (xxv) adverse effects of natural disasters; and (xxvi) other factors described in more detail under “Item 1A. Risk Factors” in Part I of our Form 10-K filed with the SEC on February 22, 2011 for the year ended December 31, 2010. This filing is available on our website at www.caterpillar.com/secfilings.