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Caterpillar and DaimlerChrysler to form global alliance

22 November 2000

Caterpillar Inc. and the commercial vehicle division of DaimlerChrysler AG have signed an agreement to form a 50/50 global alliance to develop, manufacture, market and distribute medium-duty engines, fuel systems and other powertrain components to serve the needs of third-party customers and for use in their own products. The agreement provides the framework for a number of joint ventures, supply agreements and cooperative projects, subject to the consent of US and European regulators.

According to the framework agreement, upon regulatory approval the alliance will create:

The medium-duty engine joint venture will include Caterpillar’s US facilities in Greenville, South Carolina, and its operations in Peterborough, UK. DaimlerChrysler will contribute its Sao Paulo, Brazil, facility. DaimlerChrysler’s Mannheim, Germany, facility, both parents’ engine remanufacturing facilities, and certain operations in Caterpillar’s Mossville, Illinois, facility and in its Gosselies, Belgium, facility, will serve as contract manufacturers to the joint venture. Both companies’ medium-duty engineering/development resources and related intellectual property also will become part of the venture.

The fuel systems joint venture will include Caterpillar’s US facilities in Pontiac, Illinois, and in Jefferson and Thomasville, Georgia, as well as its remanufacturing facility in Nuevo Laredo, Mexico. DaimlerChrysler’s Glatten, Wolfratshausen, and Rellingen facilities in Germany, and its US remanufacturing facility in Grand Rapids, Michigan, will participate in the venture.

In addition, the two partners reached agreement for Caterpillar to continue to supply heavy-duty 10 - 16 liter engines for use in Freightliner companies’ trucks. This volume, added to the volume of engines sold to other valued Caterpillar customers and used to power Caterpillar equipment, provides the worldwide scale to enable a new standard of customer value. A founding principle of the alliance is that it broadens the companies’ ability to serve the worldwide engine market. Both DaimlerChrysler and Caterpillar emphasized that they also will remain independent global suppliers of heavy-duty diesel engines, which are excluded from the alliance.

Caterpillar & DaimlerChrysler Company Profiles

Caterpillar Inc., Worldwide Presence

DaimlerChrysler AG, Commercial Vehicle Division, Worldwide Presence

Source: Caterpillar Inc.