Caterpillar Tractor Co.
List of Deals
- 1974 $150,000,000 8.60% sinking fund debentures due May 1, 1999
- 1974 $100,000,000 8 3/4% sinking fund debentures due November 1, 1999; $100,000,000 8 3/8% notes due November 1, 1982
Caterpillar Tractor Company's origins can be traced back to two companies. In 1871 Daniel Best established a company to manufacture farm machinery. In 1863 Charles Holt founded C.W. Holt & Company to sell hardwood products. Holt's brother soon joined him, and they established the Stockton Wheel Company to manufacture wooden wheels.
In 1886 the Holts developed a link-belt combined harvester. This machine improved on the already innovative combined harvester and thresher by using flexible chain belts rather than gears to transmit power from the ground wheels to the working parts of the machine, therefore cutting down on machine breakage. In 1892 the Holts built a steam-driven tractor that could haul fifty tons of freight at three miles per hour. This was a huge innovation in the industry; prior to the invention of the steam-driven tractor animal power was used. The Stockton Wheel Company was incorporate as Holt Manufacturing Company in 1892.
The company's next breakthrough came when it produced the first caterpillar-style tractor ("crawler"). The crawler was built on tracks instead of wheels, it and could negotiate any terrain short of a swamp. In 1906 a steam-powered crawler was perfected, allowing farmers to use land that was previously considered useless.
In 1908 Daniel Best sold out to the Holts. Two years later, however, Best's son, C.W. Best, formed his own company to manufacture tractors. The company continued to improve on the crawler through the following decade, and it was the model for the design of tanks during World War I. Holt's tractors themselves hauled artillery and supplies during the war as well.
In 1925 Holt and C.W. Best's company merged to form the Caterpillar Tractor Company. Caterpillar began to expand internationally and opened dealerships in Australia, the Netherlands, east Africa, and Tunisia. The company's sales were $52 million by 1929. Caterpillar survived the Depression years and was boosted in the late 1930s by selling millions of dollars worth of tractors to the Soviet Union. At that time, the Soviets were forming huge collective farms and required large tractors to help manage them efficiently.
By 1931 the diesel tractor engine was perfected by Caterpillar. The company redesigned many of its old tractors and witnessed growth in its sales through the decade.
Caterpillar's greatest contribution to World War II was its conversion of gasoline airplane engines into diesel engines. The company manufactured other engines and artillery shells for the war as well. Caterpillar tractors worked in battle zones during the war, repairing and building roads, bulldozing tank traps, and constructing pillboxes. Such work often required that the tractors have bulldozer blades attached, which led to the application of the term "bulldozer" to Caterpillar tractors.
The company thrived in the post-war years, as Europe and Japan demanded its products for their rebuilding projects. Taking advantage of the high demand for its tractors, Caterpillar launched an expansion program in 1949. In 1950 the company established its first overseas subsidiary, Caterpillar Tractor Company Ltd. of Great Britain.
A great construction boom continued through the 1960s, and the company continued to succeed. The 1960s were also a period of labor unrest within the company. In 1961 Caterpillar experienced a conflict with the United Auto Workers union, and 12,600 workers in Peoria struck in a wage dispute. The same union struck again in 1966.
In 1968 Caterpillar was the first company located outside of a major city to enlist in a government-sponsored program to hire and train people considered to be unemployable. The company devoted its efforts in the beginning of the 1970s to developing smaller diesel engines. Caterpillar began a dramatic expansion program in 1974, building large additions to several plants, as well as a new manufacturing center in Brazil. The company also expanded its foreign market at that time by selling pipe-laying equipment to China.