Caterpillar 2011 Annual Report Download - page 4

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message
Construction
Industries
Customer &
Dealer Support
Financial Products &
Corporate Services
The Caterpillar
Foundation Leadership Performance
Resource
Industries
Energy &
Power Systems
Chairman’s Message 4
When we introduced our 2011–2015 strategy, we talked to our teams about the need to look outside of Caterpillar. We often compare
our performance to ourselves – not our competitors – from year to year. We compare our new products to older models. We compare
results from Division to Division. There’s nothing wrong with that – it’s an effective way to show improvement. But it doesn’t help us
figure out what our customers need, and it certainly doesn’t show us what the world needs.
Business has changed. The industries we serve have changed. Competition is tough, customer requirements are demanding, and
the industries we serve are booming, and they are complicated. Outperforming ourselves simply isn’t good enough anymore.
That’s why asking the question – what does the world need? – is so important.
By 2020 the world population is expected to be 7.6 billion people. What are all those people going to need? They are going to need
food, water, energy, housing, roads, schools – everything you and I have today and probably some new things we haven’t even
thought of yet. That means infrastructure, construction, mining and power systems are growing industries. Demand for our
products is strong, and we think the big macroeconomic trends will mean good global growth for our industries for the next 25-30
years. 2011 was about getting us ready to capitalize on all of that growth.
In 2011, we announced new distribution centers to keep up with growing parts demand. We completed the acquisitions of Bucyrus
and MWM, which expands our mining and power systems portfolios. We introduced over 50 new Tier 4 products that not only
meet emissions requirements, but deliver added value in terms of power, efficiency, safety and more. These new products run
with the cleanest diesel engines ever made. We built new factories around the world and significantly expanded capacity in
existing factories. In fact, in some cases we doubled capacity. Comparing ourselves from year to year, we did an amazing job.
But the world wants more.
Despite the increases in capacity and expected additions in 2012, we are still very tight on many products and are currently quoting
extended delivery times for some products. For example, we are now quoting delivery times into 2014 for some large trucks and
track-type tractors.
That’s why we are setting the bar even higher for 2012.
While we have much to do in 2012, we’ll be particularly focused on four things – continuing to improve quality, our investment in
product development, integrating our acquisitions and adding production capacity. In 2011 our investment in capital expenditures
was $2.6 billion. In 2012, we expect capital expenditures of about $4 billion. We are transforming Caterpillar with an intense focus
on customers, driving a reinvigorated sense of urgency as we invest and grow the company like never before.
We are also taking a close look at some areas that need improvement. When we developed our new Enterprise Strategy in 2010,
we started by taking an honest look at ourselves. We asked: what are we doing well, and what do we need to work on? That’s not
a one-time exercise, but something we need to do all the time.
Message From Our Chairman (continued)
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