Caterpillar dropping on-highway truck production

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Updated Feb 29, 2016

Cat-CT680Just seven months removed from ending its partnership with Navistar and pledging to build its own line of on-highway trucks, Caterpillar announced Friday the company would discontinue production of its vocational trucks.

In May of last year, CAT rolled out two new refreshed trucks – the CT680L and the CT680LG – but based on the current business climate in the truck industry and a thorough evaluation of its business, CAT says it has decided to withdraw from the market.

“Remaining a viable competitor in this market would require significant additional investment to develop and launch a complete portfolio of trucks,”says Ramin Younessi, vice president with responsibility for Caterpillar’s Industrial Power Systems Division, “and upon an updated review, we determined there was not a sufficient market opportunity to justify the investment.”

Caterpillar first launched its vocational trucks in the North American market in 2011, working with Navistar on design and assembly. Younessi says CAT had not yet begun production at the Victoria, Texas plant scheduled to build the trucks after the split with Navistar.

“This decision allows us to exit this business before the transition occurs,” he adds.

While the company will cease taking new orders for vocational trucks, Caterpillar says it will continue to support trucks currently on the road.

Caterpillar shuttering its truck operations is the company’s latest effort in an ongoing restructuring. Earlier this week, CAT said it would consolidate its Electric Power and Marine & Petroleum Power Divisions into a new Electric Power, Marine and O&G Division.

Caterpillar is reeling from weakness in global construction and mining, a slowing demand for mining equipment and soft commodity prices. The company has already closed plants and reduced its workforce by upwards of 11 percent from 2013 to the end of last year.

Bowing out of the on-highway truck segment, CAT says, will impact approximately 70 positions.