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MEMBER OF BPA WORLDWIDE® DIESEL PROGRESS® NORTH AMERICAN EDITION (ISSN 1091-370X) Volume 78 No. 4 — Published monthly by Diesel & Gas Turbine Publications, 20855 Watertown Road, Waukesha, WI 53186-1873, U.S.A. Subscription rates are $95.00 per year/$10.00 per issue. Periodicals postage paid at Waukesha, WI 53186-1873 and at additional mailing offices. Copyright 2012 DIESEL & GAS TURBINE PUBLICATIONS.Canadian Publication Mail Agreement 40035419. Return Undeliverable Canadian Addresses to: P.O. Box 456, Niagra Falls, ON L2E 6V2, Canada. E-mail: sbollwahn@dieselpub.com. POSTMASTER: Send address changes to: Diesel Progress North American Edition, 20855 Watertown Road, Suite 220, Waukesha, WI 53186-1873.

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TOP DEAD CENTER

I’m Sorry, What?

Elsewhere in this issue (page 12 to be exact) you will find an article about Cat-
erpillar’s newly introduced Tier 4 interim machines from its Building Construction
Products Division (BCP). Fairly typical Diesel Progress new equipment story.
But in that article is a detail that is one of the most interesting engine stories
in recent memory: 11 models in BCP’s recent launch (plus some coming-soon
models) are powered by Kubota diesel engines.
The engines obviously carry Caterpillar’s name and are built to Cat specs, etc.,
etc. But no matter how you spin it, this is one of those “Huh? Are you sure?” sort
of moments that don’t happen very often. Kubota diesels in Caterpillar machines.
It is not totally unheard of for non-Cat engines to show up in yellow iron. Its re-
cently concluded, long-time alliance with Mitsubishi found diesels from the Japa-
nese manufacturer in Cat-branded machines, to name one.
But this one is stunning on about 30 levels.
It gets even more interesting. The use of Kubota diesels in the BCP machines
is part of a larger Cat story. Apparently in early 2009 Caterpillar “uncoupled”
most, if not all, of its machine groups to essentially let those groups run their indi-
vidual businesses in such a way as to maximize their return to the Cat enterprise
as a whole. And that apparently includes component specifying and purchasing.
Now Cat buys hundreds of millions, if not billions, of dollars outside the walls of
Caterpillar Inc. But this is something different.
Its implications on the supply chain of the industry’s biggest manufacturer, as
well as what it says about Caterpillar’s current corporate culture is important.
Having said that, this does not mean all Cat engines in Cat machines are now
in play. The guess is anything 6.0 L and larger is pretty safe.
You would have to think that replacing excavator engines, for example, with an
outside brand is something that would have to be studied and researched 100
times over before it was even suggested. And you would also think that the value
proposition had better be beyond crystal clear, or the presenter may end up as
the new parts rep in Timbuktu.
That BCP would be the group that lifted the flap of the tent, even a little bit, is
not a real surprise. Cat’s compact equipment group has frankly struggled over
the years. When Mary Bell was appointed to run the group, it was widely specu-
lated within Cat (and outside) that her charter was to “fix it or sell it.” With the
latter probably not being a viable option.
Now BCP has turned the corner financially and operationally, and in all likeli-
hood one of the reasons was the ability to build compact machines more attuned
to that very special segment of the construction equipment world. And that in-
cluded engine and component specifying.
In the end, a skid-steer loader is not a D7. dp