After more than 41 years with Caterpillar Inc., chairman and CEO Doug Oberhelman will retire next year, effective March 31, 2017. Jim Umpleby, currently a Caterpillar group president with responsibility for energy and transportation, will succeed Oberhelman as CEO.
During his time as chairman and CEO, Oberhelman has reinvigorated the company’s focus on serving customers while also driving a culture of quality and safety. He led the company to its highest sales and revenue peak in its 91-year history in 2012. Since that time, has led the company through the unprecedented downturn affecting Cat’s key industries.
During Oberhelman’s tenure:
- Product quality levels have reached historically high levels.
- Market position for machines has significantly increased.
- New Lean Management processes have simplified and sped production capabilities, improving product availability for dealers and customers.
- The company has increased its quarterly dividend by 83 percent since 2010.
- The balance sheet is strong, and at the end of the second quarter of 2016, Caterpillar’s Machinery Energy & Transportation debt-to-capital ratio was 39 percent, with $6.764 billion in cash as of June 30, 2016.
- Global safety metrics for employees have dramatically improved, with the Recordable Injury Frequency improving each year.
- Caterpillar has been granted nearly 7,300 patents worldwide.
- The company dramatically expanded its commitment to lower owning and operating costs for customers by connecting new and existing equipment through digital technology and data analytics.
“Our people have heard me say many times that my greatest responsibility as chairman and CEO is to manage Caterpillar for today and position the company and its future leaders for long-term success,” Oberhelman said. “It has been an honor and a privilege to lead this company, and I am confident in the choice of my successor, Jim Umpleby.”
Oberhelman said he believes Cat remains strong despite challenges in the oil and gas industry stemming from the collapse of crude prices worldwide, as well as a downturn in other market sectors Cat serves.
“During the last four years, Caterpillar has faced unprecedented global economic conditions that have significantly impacted the industries served by our customers, as those industries and economic growth in many regions around the world have slowed or severely contracted,” Oberhelman said. “Faced with these challenges, our employees have responded like champions. We have improved our market position and grown our field population. Our product quality is at historically high levels, and I believe we are leading the industry in digital capabilities. I am confident that Caterpillar is stronger than ever, with product quality, power, technology and innovation that is the envy of our competitors. Add to that lean and agile manufacturing capabilities and an unrivaled global distribution channel. The future is bright.”
The company’s board of directors elected Umpleby to succeed Oberhelman. Umpleby, a 35-year veteran of the company, will join the Caterpillar board and become CEO effective Jan. 1, 2017. He joined Solar Turbines Inc. in San Diego in 1980. Solar, a wholly owned subsidiary of Caterpillar Inc., is one of the world’s leading manufacturers of industrial gas turbine systems. Early in his career, he held numerous positions of increasing responsibility in engineering, manufacturing, sales, marketing and customer services. Umpleby lived in Asia from 1984 to 1990, with assignments in Singapore and Kuala Lumpur, Malaysia. The Caterpillar board of directors elected Umpleby a Caterpillar vice president and president of Solar Turbines in 2010. He was named group president and a member of Caterpillar’s executive office in January 2013.
“For more than 91 years, Caterpillar equipment has been renowned for its quality, durability, innovation and value,” Umpleby said. “I have been privileged to work with Caterpillar employees and dealers in supporting our customers as they develop the world’s infrastructure and improve standards of living and quality of life. I look forward to leading our dedicated team as we build upon the accomplishments of those that have come before us.”
Oberhelman will remain as executive chairman of Caterpillar until March 31, 2017, when he will retire. Upon Oberhelman’s retirement, Dave Calhoun, a current member of the Caterpillar board, will assume the role of non-executive chairman of the board. Calhoun is senior managing director and head of private equity portfolio operations of The Blackstone Group LP.
Ed Rust, former chairman and CEO of State Farm Mutual Automobile Insurance Co., and currently presiding director of the Caterpillar board, will remain on the board, but will no longer hold the title of presiding director once Calhoun assumes the role of non-executive chairman.
“The board has a robust, best-in-class succession planning process for the critical roles of chairman of the board and chief executive officer, as well as other top executive positions,” Rust said. “One of our top priorities as a board is developing a strong pipeline of senior leaders.”
A replacement for Umpleby will be announced at a later date.