Good morning, troops. It's Monday, Oct. 17.
It's also the day after The Wall Street Journal website posted a story that details the awful timing of Caterpillar Inc.'s foray into mining equipment.
In 2011, Caterpillar spent a princely sum — $8.8 billion — to purchase Milwaukee-based Bucyrus International Inc. Bucyrus manufactured open-pit mining shovels and underground mining machines, which Peoria-based Caterpillar didn't.
Of course, this purchase was made at a premium, before commodity prices dropped worldwide. In ensuing years, Caterpillar has undergone massive, ongoing layoffs. Although its stock is rebounding, it's still about 25 percent behind its 2012 apex, the WSJ reported.
Caterpillar CEO Doug Oberhelman was the architect of the expansion, according to the WSJ report. He said the downturn could not have been foreseen.
Part of the reason Oberhelman was chosen in 2010 as CEO appears to be because of his ability to manage money. He had been Caterpillar chief financial officer through a previous recession.
"The board felt he would bring a performance discipline to the company that it really needed," former Caterpillar director Gail Fosler told the WSJ.
The results of that feeling are mixed, to say the least. Some questioned an Oberhelman compensation increase that came amid the recent financial turmoil.
Oberhelman has a few more years until he reaches 65, the mandatory retirement age for Caterpillar executives. How the company rebounds in the interim probably will determine Oberhelman's legacy. The aftermath might determine the company's overall future, including that of its proposed new world headquarters in Downtown Peoria.
But at least one Peoria-Milwaukee industrial connection appears to be working out better than the Caterpillar-Bucyrus link.
In July, Japanese dump-truck maker Komatsu — which has a manufacturing facility in Peoria — announced it will purchase Joy Global Inc., a Milwaukee-based mining-equipment firm. A story at bloomberg.com stated Komatsu is getting a bargain with Joy Global. Its stock was at almost a 50-percent discount relative to its five-year average. Commodity prices also have stabilized worldwide.
The Bloomberg story contrasted Komatsu's purchase of Joy Global with Caterpillar's purchase of Bucyrus. To say the least, Big Yellow didn't come off favorably.
The story headline? "Caterpillar Outsmarted Again."
With all the references to other publications' stories this morning, the song heard on the way into work today appears to be a perfect fit.
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