Caterpillar CEO Oberhelman to step down in March
Caterpillar (NYSE:CAT), the world's No.1 heavy machinery maker, will lose its iconic chairman and chief executive officer early next year, as Doug Oberhelman has decided to retire effective March 31 after more than 41 years with the company.
Traditionally, CAT’s top executives have remained in their positions beyond age 65. The fact that Oberhelman is retiring at 63 suggests he is leaving ahead of schedule.
Jim Umpleby, group president for energy and transportation, will succeed Oberhelman as CEO from Jan. 1, while the current head of CAT will remain as chairman until March, the company said.
Traditionally, CAT’s top executives have remained in their positions beyond age 65. The fact that Oberhelman is retiring at 63 suggests he is leaving ahead of schedule and on the heels of a sustained commodity slump that hurt Caterpillar’s customers in the mining, energy and construction sectors.
The Illinois-raised businessman, who took helm in 2010, pushed Caterpillar deeper into mining at a time when the industry was at its prime. He spent almost $10 billion on plants and equipment in his first three years at the top post and was key in the 2011 acquisition of Bucyrus International Inc., a Milwaukee mining-equipment maker.
Such deal, WSJ.com reports (subs. required), helped CAT grab a major stake in the segment of giant open-pit-mining shovels and underground-mining machines, which the company didn’t make at the time.
Oberhelman also led Caterpillar to its highest sales and revenue in its 91-year history in 2012. But the market has changed quite a bit since then, as he noted in today’s statement:
"During the last four years, Caterpillar has faced unprecedented global economic conditions that have significantly impacted the industries served by our customers," he said.
In the past year, the Peoria, Illinois-based equipment giant has indeed taken major cost-cutting measures, including reducing its global full-time and flexible workforce by 13,900 to 100,000 employees, shutting down plants and repeatedly axing its full-year sales and profits forecast.
Dave Calhoun, a current member of the board, will assume the role of non-executive chairman of the board, the company said.
Ed Rust, Presiding Director of CAT’s board, will remain on the team, but will no longer hold that title once Calhoun assumes the role of non-executive chairman.
A replacement for the upcoming CEO, Umpleby, will be announced at a later date, Caterpillar said.
The stock was slightly down in New York after the announcement, trading at $87.27 or 0.46% less than its closing price on Friday late morning.