Caterpillar Streamlines Corporate Structure

Caterpillar last week announced a number of executive changes and a streamlined corporate structure. Vice chairman and CEO-elect Doug Oberhelman is leading a team that is updating the company’s strategy, which was first introduced by chairman and CEO Jim Owens in 2005.

“Six months ago we announced our leadership transition to give Doug the time to develop and refine the next phase of our strategy and structure and to devote energy to thinking about how Caterpillar can elevate itself to the next level,” said Owens. “I am excited about how we’ve positioned the company and where the updated strategy will take us. The new organization is positioned well for execution and will help assure the realization of our Vision 2020.”

The structural changes for the company begin within the executive office. Once he becomes CEO, effective July 1, Oberhelman will not be replaced as a group president, reducing the number of group presidents from six to five. In addition, each of the remaining five group presidents will have divisions reporting to them that will provide greater clarity and structure so the group presidents and their organizations can deliver best-in-class products and services with attractive profitability across the entire company. As part of the new structure, the chief financial officer and chief legal officer will report directly to the chairman and CEO. Group President Ed Rapp will become CFO and will lead many of the company’s corporate services divisions. Jim Buda, vice president, general counsel and secretary, will also report directly to the chairman and CEO.

“We are sharpening our focus and creating a leaner, more responsive Caterpillar by giving each group president greater responsibility and accountability for the ultimate success and profitability of their businesses,” Oberhelman said. “We are assigning resources to the leaders of these businesses so they will have all the levers to pull to deliver results, design and produce the highest-quality products, and lead and develop a team of people around the world with the goal of reaching new levels of excellence.”

The new structure will consolidate the number of traditional corporate divisions, reducing the number from 32 to 29. These changes will also result in a number of new responsibilities for some vice presidents.

Group presidents Rich Lavin and Steve Wunning will be responsible for leading Caterpillar’s machine businesses. They will lead divisions supporting machine product design and development, focused industry sales execution and a greater emphasis on quality and manufacturing excellence. Recognizing the growth potential and opportunities for Caterpillar in the key emerging markets of Asia, Lavin will relocate to Asia later this year.

Group president Stu Levenick will be responsible for leading an enhanced focus on aggressively growing Caterpillar’s aftermarket parts and product support capabilities, its logistics business, remanufacturing and components, as well as its global marketing and distribution organizations.

Group president Gerard Vittecoq will be responsible for Caterpillar’s growing energy and power systems business. This includes Caterpillar’s engine, turbines, gas and marine, electric power systems businesses and its wholly owned subsidiary, Progress Rail.

Group president and CFO Rapp will be responsible for leading many of Caterpillar's services divisions, which provide support and services across the entire Caterpillar enterprise.

In addition to the new corporate structure, Caterpillar is announcing that several vice presidents will retire from the company.

After more than 32 years with the company, Dave Burritt will retire as Caterpillar's vice president and chief financial officer on June 1.

Caterpillar vice president Steve Gosselin will replace Rod Beeler, vice president of the Marketing & Product Support Center of Excellence effective June 1. Gosselin is currently the president of Solar Turbines Inc., a wholly owned Caterpillar subsidiary and the leader in manufacturing industrial gas turbines. In his new role, Gosselin will lead a newly strengthened Aftermarket Parts, Product Support & Marketing Division that will be more focused and accountable for aggressively growing Caterpillar's parts and product support business.

To provide greater operational excellence in its core North American manufacturing operations, Caterpillar is creating the Integrated Manufacturing Operations Division with responsibility for operations located in East Peoria, Decatur and Aurora, Ill.; Monterrey and Torreon, Mexico; Peterlee, U.K. and Thiruvallur, India. Effective June 1, vice president David Bozeman has been selected to lead this new division.

Effective June 1, the Core Components Division will be consolidated with Caterpillar's Remanufacturing Division. Steve Fisher, currently vice president, Remanufacturing Division, will lead this newly expanded division.

Bill Springer, Caterpillar vice president with responsibility for the Quarry and Specialty Industries Division, will assume new responsibilities that include Caterpillar's global paving products, forestry products and tunnel boring products. Caterpillar's Work Tools business and its Governmental and Defense Products group will continue reporting to Springer as part of the new Diversified Products Division. Springer's new responsibilities will take effect June 1.

With 2009 sales and revenues of $32.4 billion, Peoria, Ill.-based Caterpillar is a global manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines.