Caterpillar Inc.

CATERPILLAR INC.

Caterpillar Tractor Company (the original name for Caterpillar Inc.) was formed in 1925 through the merger of companies founded by Daniel Best and Benjamin Holt. After arriving in California in 1859, Best observed that many farmers transported their grain to special cleaning stations to make it suitable for market. Best thought there was a way to clean grain by machine at the same time as it was being harvested to avoid the costly step of transporting it to another site. By 1871 Best had patented his first grain cleaner, which he manufactured and sold with great success. By the 1880s Best owned manufacturing centers in Oregon and Oakland, California.

Holt arrived in California in 1863 and with his brothers operated the Stockton Wheel Company, which manufactured wooden wheels. It marked the firm's first experience with the vehicular products that would be the company's strength in the years to come. In the 1880s inventors were tinkering with the combined harvester and thresher, known as the combine, which revolutionized grain farming through its ability to cut and thresh, and later to clean and sack grain in vast quantities. It accomplished these processes in far less time than was previously needed. The Holt brothers' Link Belt Combined Harvester, developed in 1886, advanced agricultural technology further by using flexible chain belts rather than gears to transmit power from the ground wheels to the working parts of the machine. This innovation cut down on machine breakage.

Near the end of the nineteenth century the major bottleneck in the progress of agricultural technology was the need for animal power. The combine had made large farms profitable, but the cost of housing and feeding large horse teams and the men who drove them cut into earnings. Both the Holts and Daniel Best were interested in solving this problem by using steam-driven engines to supply tractor power.

The Holts built a steam-driven tractor that could haul 50 tons of freight at three miles per hour. The Stockton Wheel Company was then incorporated as Holt Manufacturing Company in 1892. In the same period Daniel Best refined his steam-engine tractor into one of the finest available during this period. Throughout the 1890s steam-powered tractors were used for hauling freight and plowing fields, as well as for harvesting grain.

In the early 1900s the Holt brothers turned their ingenuity to another farming problem. The land around Stockton, California, where the Holt Company was headquartered, was boggy and became impassable when wet. To overcome this limitation the Holts produced the first "caterpillar"-style tractor, or crawler. It was built on tracks instead of wheels, and the "Cat" could negotiate any terrain short of a swamp. It soon allowed farmers to reclaim thousands of acres of land previously thought useless. In 1906 a steam-powered crawler was perfected, and caught on quickly because of its ability to work on ground that all but swallowed other machines.

In 1908 the engineers who were building the 230-mile Los Angeles Aqueduct used a gas-powered crawler to transport materials across the Mojave Desert. The machine worked so well that 25 more tractors were purchased for further work on the aqueduct, thus giving the Holt tractor credibility with the public and a substantial boost to sales. Also in 1908 Daniel Best sold out to the Holts, after decades of individual success. Best's son, C. W. Best, was taken on as company superintendent, but after two years, formed his own company and advanced the state of tractor technology even further on his own.

In 1909 Charles Holt, who had been looking for a new manufacturing plant in the eastern half of the United States, bought the abandoned but relatively new plant of a tractor company that had failed. After this plant in Peoria, Illinois, opened, Holt continued to improve his tractor and expand its range of applications. He experimented with several different materials for the body to achieve a heavy-duty tractor that was not excessively heavy. Holt knew that his tractors could be used for even more rugged chores than agriculture or hauling freight, and fitted adjustable blades onto his tractors. He then hired them out to grade roads or move soil and rocks at construction sites.

Soon after World War I (1914–1918) broke out, thousands of troops were caught in trench warfare, marked by the lethal combination of sharp-edged concertina wire plus machine-gun emplacements. Observing the futility of mounting attacks in such terrain, a British lieutenant colonel, Ernest Swinton, recognized the usefulness of an armored machine that could resist automatic machine-guns and also negotiate the warscarred battlefield. His requirements resulted in the invention in 1916 of an experimental tank, based on the track-laying tractors designed by Holt and others. A year later the tank was used with such telling effect that it is credited with winning the Battle of Cambrai, in France, for the Allies. Some historians point to this battle as the turning point of the war. Germany had investigated the military applications of the track-laying vehicle well before anyone else and mistakenly concluded that tractors were without military significance.

Holt tractors themselves served the war effort by hauling artillery and supplies. In all, more than 10,000 Holt vehicles served the Allied forces, and the international exposure that the Holt tractor received during the war did much to popularize the tracked vehicle.

In 1925 Holt and C. W. Best's companies merged, this time to form the Caterpillar Tractor Company. The company relocated its headquarters from California to Peoria three years later. By 1931, the diesel tractor engine, which had been used before but not widely, was perfected for common use by Caterpillar. Previously, diesels had been too heavy and undependable for commercial use. The Diesel-60 tractor, however, made the diesel the staple engine for heavy-duty vehicles, as it is to this day.

Caterpillar's contributions to World War II (1939–1945) were many and varied. One was the conversion of a gasoline airplane engine into a dependable diesel engine. In 1942 Caterpillar unveiled the new RD-1820 radial diesel engine, which was used to power the M-4 tank. The company manufactured other engines, as well, and even artillery shells for the war effort. Caterpillar tractors worked in battle zones repairing damaged roads, building new ones, and bulldozing tank traps. Because the Cat was usually seen doing such roadwork with a bulldozer blade attached, the term "bulldozer" came to be used for Caterpillar products.

In the postwar period, Caterpillar experienced enormous growth, because of the massive rebuilding campaigns begun both in Europe and Japan. From the 1950s through the end of the century, the company (which was renamed Caterpillar Inc. in 1986) grew to become the world's largest manufacturer of earthmoving machinery. In addition to its tractors, trucks, graders, excavators, scrapers, and other heavy machinery used in the construction, mining, and agriculture industries, the Caterpillar of the late 1990s also made diesel and gas engines used in medium- and heavy-duty trucks, electric power generation equipment, locomotives, and other industrial equipment. During a long and bitter strike by the United Automobile Workers union during much of the 1990s, Caterpillar successfully resisted the union's demands and "rolled over" its opposition as if the company's labor relations strategy were mounted on tractor treads.

FURTHER READING

Bremner, Brian. "Can Caterpillar Inch Its Way Back into Heftier Profits?" Business Week, September 25, 1989.

Caterpillar Inc. The Caterpillar Story. Peoria, Ill.: Caterpillar Inc., 1990.

——. Century of Change: Caterpillar Special World Historical Edition. Peoria, Ill.: Caterpillar Inc., 1984.

Dubashi, Jagannath. "Cat-apult: The Cheap Dollar Helped, but Caterpillar's Turnaround Was Engineered in Peoria." Financial World, November 23, 1993.

Gibson, Paul, and Barbara Rudloph. "Playing Peoria to Perfection." Forbes, May 11, 1981.

Kelly, Kevin. "Cat Is Purring, but They're Hissing on the Floor." Business Week, May 16, 1994.

Naumann, William L. The Story of Caterpillar Tractor Co. New York: Newcomen Society in North America, 1977.

Weimer, De'Ann. "A New Cat on the Hot Seat." Business Week, March 9, 1998.