Caterpillar investigated for allegedly throwing customers' train equipment into the Pacific: WSJ
The Wall Street Journal reports that Caterpillar (NYSE:CAT), the world's largest mining equipment manufacturer, is being subpoenaed by a federal grand jury over allegedly dumping parts into the ocean that were supposed to be delivered to customers.
The business unit being investigated is Caterpillar's Progress Rail Services, one of North America's largest rail and transit service providers. Progress Rail, a wholly-owned subsidiary of Caterpillar, was acquired in 2006.
The Wall Street Journal says the alleged dumping occurred near the Port of Long Beach, California.
The news came out after Caterpillar disclosed that it was being investigated in security documents filed last month. Caterpillar said it did not believe that the matter will ". . . have a material adverse effect on the company's consolidated results of operation, financial position or liquidity."
Caterpillar has a had a hard time making good news. Last month in its 3Q the mining equipment lowered guidance and reported revenue numbers below analysts expectations.
According to its website, services performed by Progress are locomotive upgrade and repair; railcar re-manufacturing; rail welding; and rail repair and replacement.
"As the world's resources continue to be stretched, we are working hard to help protect the environment and save our customers money by refurbishing or recycling materials and offering more sustainable products," says Progress Rail.