by Tess Boardman

Created on: January 22, 2012   Last Updated: March 05, 2012

Sustainability – a tough goal in challenging economic times. Yet, Caterpillar (NYSE: CAT), a leader for 85 year in its industry of industrial machines, embraces sustainability as a core component to its business. Its iconic yellow heavy equipment may symbolize green in its mission to “enable economic growth through infrastructure and energy development, and to provide solutions that protect people and preserve the planet.” Caterpillar is a global force in the manufacture of construction, mining equipment, diesel and natural gas engines, industrial gas turbines and diesel electric locomotives Other key segments include Caterpillar Financial Services, Caterpillar Logistics Services, Caterpillar Remanufacturing Services, and Progress Rail Services. (

http://www.caterpillar.com/sustainability/vision-mis sion-strategy)

Caterpillar recently acquired Bucyrus, a longtime producer of mining equipment and the company the dug the Panama Canal. This acquisition will provide a strong segment for Caterpillar, especially in emerging markets cashing in on commodity prices that have recently hit historic highs. Caterpillar will market the equipment under their brand name.  However, this new acquisition will have a negative impact on share prices due to a ramp up of inventories and costs associated with the acquisition. Even though the flattening of commodity prices may impact investments in mining, the market is expected to continue to be positive as increased demand in the emerging markets of China, Africa, and South America should continue to show growth.

Caterpillar announced that the distribution and support segment formerly operated by Bucyrus in South America and Western Canada was acquired by Finning International Inc. (TSX: FTT) for roughly 465 million. Finning International and Caterpillar have a longstanding relationship, with Finning being the largest distributor of Caterpillar products worldwide. (http://www.caterpillar.com/cda/files/3259220/7/01181 2+Finning+to+Acquire+Portion+of+Bucyrus+Distribution +from+caterpillar.pdf)

Several economic factors will impact Caterpillar’s future performance in key areas of their business model. Emerging markets in the global economy can provide a boon to Caterpillar’s growth; however, weak growth, uncertainty in credit markets, flattening of commodity prices, plus limitations in capacity. Governments are struggling to solve a continued poor recovery.

Deere &Co (DE) is the main competitor for

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