Caterpillar Inc. is synonymous with rugged diesel-powered machinery. Every day, construction equipment painted its distinctive shade of yellow is hard at work around the world. The company’s products can be found building roads in Europe, dams in South America, airports in Asia and pipelines in the Middle East.

Whether mining iron ore in Australia, gold in Canada or copper in Chile, Cat machines are commonly used to dig and haul massive loads of raw materials. Less visible Caterpillar products also provide the power behind big rigs traversing I-80, locomotives pulling long freight trains through the Appalachian Mountains and tugboats pushing barges up the Mississippi River.

During the last 100 years, Caterpillar has grown and prospered by subscribing to a unique philosophy of vertical integration, globalization, lean production processes, high quality products and state-of-the-art metal fabrication technology. The company has withstood cyclical market conditions, labor unrest, mergers and acquisitions, product design changes and environmental challenges. But, through it all, one thing has remained steady—its manufacturing prowess.

Caterpillar traces its roots to April 15, 1925, when two competitors in northern California decided to merge their operations and set up a new entity based in central Illinois. Caterpillar Tractor Co. was the name chosen for the company, taking advantage of a trademark used on a popular machine made by one of its legacy firms, the Holt Manufacturing Co.

 

Origin of the Caterpillar Tractor

Caterpillar’s origin story begins in the northern part of California’s San Joaquin Valley, one of the richest agricultural regions in the world. The soil in the delta area of the San Joaquin and Sacramento Rivers near Stockton was too soft for horses and too thick to support many types of wheeled equipment.

A local steam tractor manufacturer named Benjamin Holt came up with an ingenious solution to the problem: a low-ground-pressure machine that could crawl along difficult terrain. He removed the rear drive wheels and replaced them with a set of tracks made from malleable link belts with wooden blocks attached to act as treads.

The innovation formed a pair of continuous tracks that evenly distributed weight. A series of mechanical chains and drive sprockets transmitted power from the steam engine to the tracks. The tracks reduced soil compaction and improved traction. The unique undercarriage could handle muck, mud, rocks, snow and uneven terrain, making the design ideal for any task that needed serious grip and stability.

Holt did not invent the track-type tractor, but he was the first person to develop a practical application of previously known mechanical principles and was the first to successfully market a product.

Holt’s steam-powered crawler debuted on Thanksgiving Day, 1904. During a test run several months later, a photographer remarked that the tractor moved along like a caterpillar, and a legend was born. He was commenting on the unique motion of the track undulating between the drive sprocket and the front idler wheel.

Originally, the innovative machines were often referred to as “mud turtles.” However, people convinced Holt that “Caterpillar” was a much better name. The first Holt tractor to wear the Caterpillar badge crawled off the assembly line in 1909. The following year, Holt registered the name as a trademark with the U.S. Patent Office.

Although Caterpillar is synonymous today with earthmoving and road building applications, the company was much more agrarian at one time. Early crawlers were developed for use in rugged off-road landscapes in the West, such as harvesting vast wheat fields and hauling heavy loads of logs through forests.

Because of the limitations of steam-powered tractors, such as the risk of boiler explosions, Holt and his colleagues soon began experimenting with internal combustion engines (ICE). The next-generation crawlers increased power, reduced size and improved tractive effort.

Holt produced four gasoline-powered crawlers in 1908. However, within two years, more than 100 machines were in operation, equipped with engines made by the Aurora Engine Co. of Stockton.

Soon, a variety of other companies began making ICE crawlers. Holt’s biggest competitor was the C.L. Best Tractor Co. of nearby San Leandro, CA. Its best-known product was called the “Tracklayer.”

In 1909, to be closer to farmers in the Midwest, Holt expanded its operation by purchasing the plant of Colean Manufacturing Co., a defunct farm equipment maker in East Peoria, IL. It was one of many steam tractor manufacturers that failed to make the switch to gas engines.

Best and Holt both prospered during World War I by producing crawler tractors for the U.S. Army and its allies. The rugged machines were used to haul heavy artillery pieces and supply wagons over harsh terrain in Europe.

However, in the early 1920s, there was a surplus of machines on the market. Best and Holt both experienced financial pains and were involved a variety of lawsuits.

That’s because “certain aspects of the track-type machine, particularly details of its undercarriage, were a tangle of patents,” says William Haycraft, a retired Caterpillar marketing executive and author of Yellow Steel: The Story of the Earthmoving Equipment Industry. “Although engine and transmission technologies were directly transferable from wheel to track machines, steering systems, the final drives and undercarriages of track machines were far more complex.”

Strategic Merger

To survive in an increasingly competitive marketplace, the old rivals agreed to join forces in 1925 and form the Caterpillar Tractor Co. It proved to be a wise move. Between 1926 and 1929, sales more than doubled, while profits tripled.

According to Haycraft, “the first six years of the company’s existence were extremely profitable [because] the merger of the two leading manufacturers of crawler tractors brought powerful synergisms in manufacturing and marketing.”

The Best factory in San Leandro became the first headquarters location for the new company. However, Holt’s factory in East Peoria (a small city located halfway between Chicago and St. Louis along the banks of the Illinois River) became the main manufacturing hub. The strategic location enabled the company to receive raw materials and ship finished goods by either rail or barge.

In addition to being within close proximity to many customers, the facility was near numerous iron and steel suppliers. Since acquiring the property 16 years earlier, Holt had improved the layout and material flow of the factory, which resulted in various efficiency and quality improvements.

At the time of the merger, Holt boasted the larger operation and was roughly twice the size of Best. In addition to tractors, the company produced a line of combine harvesters that were popular with farmers. However, while Holt was bigger in terms of plant size and production capacity, Best was better when it came to innovative manufacturing practices.

According to Ross Kurth, executive director of the Earth Moving Legacy Center, Best focused on using high quality metal in its machines. “The company had an in-house foundry, made its own steel castings and pioneered processes such as the heat treatment of parts,” says Kurth. “Heat treatment increased strength, durability and wear resistance, which enabled metal tractor components to withstand more stress and fatigue.”

“Because of the nature of its work, the Caterpillar tractor must be made to close tolerance,” explained an article in the Sept. 16, 1926, issue of American Machinist. “Ability to resist shocks and abrasion is one of the principal requirements.

“Hence the heat treatment of parts, particularly components of the track and track-driving mechanism, must be carried on to high standards, with precise knowledge of the materials being treated, and by the use of equipment that will permit rapid production, as well as controlled quality.

“Carburizing, of which there is much to do, is carried on according to schedule, in automatically fired oil furnaces of the company’s own construction….A special furnace has been developed by the Caterpillar company to harden cast-steel sprockets. The furnace is oil-fired from the top, the hearth is supported on a hydraulic ram and the capacity is four sprockets per heat.”

In 1931, Caterpillar was issued its first known U.S. patent for a heat-treating furnace designed for more efficient maintenance.

Clarence Leo Best (affectionately referred to as "C.L". by colleagues), who championed many of those metallurgical innovations, was named the first CEO of Caterpillar in 1925. He held the reins until 1951. Best guided the fledgling company through a period of tremendous growth that included the development of diesel engines and the creation of mass-production processes.

At the time of the merger, the new company produced five models of tractors. The first machine designed and produced by the Caterpillar Tractor Co. that was not based on a previous Best or Holt model was the Model 20. Production of the gas-powered machine began in East Peoria in 1928 and within three years, more than 6,300 tractors were in operation with contractors, farmers, loggers and road builders.

The machine was 9-feet long and 7-feet tall, with a 20-hp pulling capacity. The tractor, painted battleship gray with a wavy red logo, weighed 7,500 pounds. By comparison, the largest Caterpillar tractor made today, the 850-hp D11, is 35-feet long, 15-feet tall and weighs more than 229,000 pounds.

“New…but containing every feature of ‘Caterpillar’ sure footedness, dependability and sturdiness…backed by the now united experience of the two pioneer builders of track-type tractors…Holt and Best,” proclaimed an ad in the March 10, 1928, issue of The Saturday Evening Post.

In 1930, the headquarters of Caterpillar Tractor Co. was officially moved from San Leandro to Peoria. And, the next year, another big change took effect: the first machine painted in “hi-way yellow” emerged from the factory.

Dawn of the Diesel Engine

To create more robust and powerful machines, Caterpillar engineers began investigating a new type of power source in the mid-1920s. Although the diesel engine had been invented in Germany in the early 1890s, early versions lacked the performance required for tractors. It was still considered to be a new-fangled and unproven technology.

At the time, diesels were primarily used as stationary engines, because they were bulky and expensive. But, undaunted, Caterpillar embarked on a six-year R&D program that cost approximately $1 million. A young engineer named Carl “Art” Rosen oversaw the aggressive initiative at the company’s engineering research department in San Leandro.

“To withstand the higher stresses induced by compression ignition, the diesel had to be substantially heavier than the spark-ignited gasoline engine,” says Haycraft. “The most important advantage of the diesel lay in its superior lugging ability compared to gasoline engines…. As diesel engine technology advanced, engineers [had] to enhance this lugging characteristic by lengthening the torque curve and increasing the percent of torque rise.”

Despite facing numerous challenges, Rosen and his colleagues were intrigued by the potential of diesel power, because the engines generated massive low-end torque while consuming roughly half the fuel of a gas engine. By producing high torque ratings at low rpms, diesels also reduced wear and tear on components.

“Not only did Rosen and his staff work on designing the engine, but they also had to design the testing equipment,” says Ed Claessen, co-author of Making Tracks: C.L. Best and the Caterpillar Tractor Co. “The search for a suitable fuel-injection and combustion system led to the development of a single-cylinder engine…

“The San Leandro engineering research department designed equipment capable of measuring the pressure and temperature within the cylinder, the amount of fuel consumed during the test, the amount of air being inducted and the temperature of the exhaust gases.”

Rosen and his colleagues focused their efforts on a four-cycle, solid-injection engine employing precombustion chambers with individual fuel-injection pumps. The device was started by a small gasoline engine.

The pace of research and development increased, even after the stock market crash and the start of the Great Depression in 1929. “During the period of diminishing profits, the development of the Caterpillar diesel engine never slowed,” notes Claessen. “Clarence Best believed that diesel was the motive power of the future, and he never backed down and never thought about quitting.”

Finally, on June 28, 1930, the first Caterpillar designed and built diesel engine was assembled. The Model D9900 engine, dubbed “Old Betsy,” underwent more than 16 months of intense testing before it was deemed ready for production in late 1931. Today, that historic engine is preserved and housed at the Smithsonian’s National Museum of American History in Washington.

“Metallurgical advances led the way to mobile diesel applications,” says Robert Pripps, author of The Big Book of Caterpillar. “Steel with a high strength-to-weight ratio was required for internal parts, and new casting techniques were needed for blocks and cylinder heads.”

The heart of the new diesel engine was its fuel injection pump. However, because production equipment didn’t exist, Caterpillar engineers had to design and build it.

“The fuel injection pumps…required an incredibly fine tolerance of within 0.000025-inch and were required to hold their pressure of 1,800 pounds per square inch for a period of six minutes,” says Claessen. “This over-engineering provided a safety margin for any possible emergencies. The machining involved with achieving those close tolerances more closely resembled work done by lens grinders than machine shop workers.”

According to an article that was published in Fortune magazine, the operation in the San Leandro plant “looks more like a laboratory than a factory; its interior is painted white, and the employees wear clean, white aprons.”

In 1930, Caterpillar announced that the San Leandro factory would no longer assemble tractors. All machine production was concentrated in the larger facility in East Peoria.

The first next-generation tractor that rolled off the assembly line was called the Diesel 60. It debuted in September 1931, around the same time that the East Peoria engine assembly line ramped up.

“The chassis frames were heavier and reinforced, and included a special geared-down version of the transmission used in the gas version,” says Eric Orlemann, author of The Caterpillar Century. “Along with the beefed up frame, the radiator was modified. Tracks were 34-section links, with tandem-type recoil springs on the undercarriage.”

The first diesel tractor weighed 25,000 pounds vs. 20,500 pounds for its gasoline-powered counterpart. Due to the increased weight and torque of the 4-cylinder diesel engine, engineers strengthened the main frame of the machine and the equalizer bar was replaced with a heavy-duty equalizer spring.

However, the 60-hp machine’s most distinguishable feature was its color: a bright shade of yellow with black accents. According to legend, the iconic color was chosen for its high visibility.

Caterpillar was the first tractor maker in the world to offer a diesel engine, and it never looked back. Within two years, the company was producing more diesels than all other North American manufacturers combined. In addition to mobile equipment variants, it made diesels in industrial and marine.

In 1932, Caterpillar sold its first diesel engine to an outside customer. By the end of the decade, the company supplied one-third of the world market. More than 100 companies were buying engines to run a variety of applications, including compressors, cotton gins, drills, electric generators, irrigation pumps, oil derricks, rock crushers and power shovels. Circus and carnival operators also bought portable diesels to light and power their travelling fairgrounds.

The company built its 10,000th diesel engine in 1935. That year, “Caterpillar held the distinction of being the world’s largest producer of diesels and the first to build the engines on a moving assembly line,” says Pripps. It made five sizes of diesels, ranging from 47 to 130 hp. And, Caterpillar diesel-powered equipment was in use in 72 countries around the world.

An article about Caterpillar in the May 1938 issue of Fortune claimed that “the word diesel has a certain magic ring…throughout the country, for it is one of the few industries to achieve real technological advanced during the depression and its growth has been spectacular.”

The March 1939 issue of Machinery magazine explained how “the manufacture of diesel engines in [the East Peoria] plant differs essentially from that of other plants of the automotive industry in that cylinders, pistons, crankshafts and other parts are considerably larger in size and yet must be produced within similar tolerances. For example, on crankshafts over 73 inches long, with bearings up to 4 inches in diameter, the bearing and crankpin diameters are held to specified dimensions within plus or minus 0.0005-inch.”

Caterpillar continued to produce both diesel- and gas-powered tractors for several years. That’s because the company was “fearful that customers would not accept the higher-priced diesel power,” says Haycraft. However, the last gas engine eventually rolled off the assembly line in 1938.

The 1930s were also a transition period on American railroads as diesel power slowly began to replace steam locomotives, led by General Motors’ Electro-Motive Division (EMD). That company, which is now known as Progress Rail Services Corp., was acquired by Caterpillar in 2006.

Ironically, Caterpillar engineers developed a big V8 diesel in the mid-1930s called the D17000. It was created with diesel switch engine locomotive work in mind, but it also excelled in marine and stationary power applications, such as generators.

 

Bigger and Better Tractors

Diesel engines enabled Caterpillar engineers to design and build larger, heavier and more powerful tractors. During the 1930s, improvements were made to frame components to bolster suspension and traction, serviceability of the final drive and ease of transmission shifting. In the 1940s, a welded case and frame assembly reduced weight and increased strength, while a sealed track assembly increased the life of undercarriage components.

To ensure that it could produce a steady stream of heavy-duty components, Caterpillar opened a state-of-the-art foundry in East Peoria in 1930 that could melt 300 tons of iron daily. Two decades later, the foundry was pouring 600 tons a day in the same space and producing 4 million molds annually.

“Caterpillar parts are big and heavy…they must be made of superior materials and machined to closer tolerances than most automobile parts in order to ensure durability,” explained an article in the May 1938 issue of Fortune magazine. “The high-weight, high-precision combination is most evident in the diesel engine….Because the compression of a diesel is a great deal higher than that of a gasoline engine, it requires more and sturdier main bearings, and heavy connecting-rod bearings fitted to tolerances that would be ridiculous in automotive work.”

“Metallurgy improvements enabled Caterpillar to increase the robustness of its products,” says Kurth. “As power increased and the technology of drivetrains improved, so did the scale of size of the machines, allowing for bigger and more capable tractors to be introduced.

“A switch from direct-drive transmission to a planetary gear drive system enabled tractors to handle higher torques,” explains Kurth. “It was important, because it allowed for more torque to be applied to the track drive system while remaining reliable and not breaking.”

“During the 1930s, diesel tractors became increasingly popular, due to low fuel cost and excellent torque characteristics in power delivery,” adds Orlemann. “Caterpillar started to get serious about large diesel tractors in mid-1933, when it introduced the Diesel 75. 

“As large government works projects helped to get America back to work, contractors needed bigger iron to accomplish these big earthmoving contracts,” explains Orlemann. “At the same time, R.G. LeTourneau Inc., a builder of tractor equipment attachments and accessories, was introducing larger earthmoving devices, such as pull scrapers, rooters and bulldozing blades.”

New Deal projects spurred demand for big machinery and helped Caterpillar survive the Great Depression. After annual sales plummeted from $45 million in 1930 to $13 million in 1932, they rebounded to more than $36 million by 1935. That was after larger diesel-powered tractors were introduced to tackle big projects, such as dam construction.

One machine, the groundbreaking Diesel 70, was only produced in 1933, but it set the standard for all large tractors that followed. It featured a 78-inch track gauge, measured 12-feet long and weighed 30,800 pounds.

In 1934, Caterpillar unveiled a much more powerful and reliable six-cylinder engine, the 11000 series, which debuted with the Diesel 75 tractor. The engines were ruggedly constructed and designed to handle continuous heavy loads. And, because of their inherent simplicity, they could be serviced and maintained by any type of operator.

Those improvements in power and performance led to the legendary D8 in 1935, which became one of the most popular tractors ever made. At the time, it weighed 33,110 pounds (the transmission gearbox alone weighed 3,100 pounds), and was more than 15-feet long and 8-feet wide. Two decades later, when it was still in production at Caterpillar’s flagship factory in East Peoria, the tractor weighed 38,155 pounds.

“It delivers 150-hp at the drawbar, which is 55 more than in 1935 when it first appeared,” explained a company publication from 1954 entitled Fifty Years on Track. “To lengthen the life of its machines, Caterpillar makes a point of precision and mass-produced quality…For the entire product line, over 7,000 parts—including the D8’s 350-pound sprockets—get added strength and hardness by heat treatment. Time of treatment varies from 2 seconds to 36 hours; one huge furnace is 107-feet long.”

By the time the next-generation D8H was unveiled in 1958, it was 21-feet long and weighed more than 70,000 pounds. During a 16-year period, almost 50,000 of the machines were produced.

Making Tracks

In addition to diesel engine production, one of the most fundamental changes in the history of Caterpillar occurred in March 1929. That’s when the company received a U.S. patent for a “method of providing track shoes.”

“The famous ratchet links that guide the tracks are cast pieces, with a pin run through each to attach the item, which runs along a sprocket system,” says Kurth. “They enable the undercarriage to handle more power and weight.”

In his patent filing, Best stated: “In experimenting with and developing tractors over a long period, I have found that one of the most important features affecting the commercial success of a track-type tractor is the track shoes.”

“His invention called for the track shoes to be made from a metal bar that had been rolled to the width and form of the shoes, but in a long length that allowed multiple shoes to be sheared from it,” explains Claessen. “The holes required for fastening would then be punched into the individual shoes.

“Best claimed that these shoes ‘are of excellent quality primarily due to the rolling process, and are quickly and economically produced,’” adds Claessen. “This rolling process became the industry standard and is still in use today.”

“Track making at the Caterpillar Tractor Co. plant in San Leandro is on the basis of straight line production,” proclaimed an article in the April 14, 1927, issue of Iron Age entitled ‘Method of Assembling Caterpillar Tracks,’ which described how “one small unfinished drop-forged link of 12 inches [grew into a] completed track 22 feet long.

“The link, after seven operations on six single-purpose machines, where rights and lefts are handled together, enters a rotary automatically controlled electric furnace, on leaving which it is given a differential quench….After a draw, the links are assembled, with the track spools and pins, in a special 80-ton press, after which the shoes are attached to the completed track [and] conveyed by trolley to the point of application on the main assembly floor.

“Worthy of note, for assembling the track shoe, is a motor-driven socket wrench which, through the medium of a pneumatic friction clutch, will slip at a predetermined torsional stress and is released entirely, for passing from bolt to bolt, by foot action of the operator. This mechanism assures a uniform setting up of the shoe and also constitutes a physical test of each bolt and nut as it is installed. [An air hose supplies compressed air to the pneumatic friction clutch].”

Caterpillar engineers’ expertise at bending, shaping and joining “yellow steel” enabled the young company to eventually move beyond crawler tractors and develop other types of earth moving and road building machinery.

One good example was the Diesel No. 12 Auto Patrol scraper, which was introduced in 1938 (Caterpillar had started dabbling in motor graders when it acquired the Russell Grader Co. a decade earlier). It featured a triple-box-section main frame that was much stronger and more rigid than twin-beam designs used in earlier models of motor graders. The 20,360-pound machine featured a 12-foot blade that was used to build roads and remove snow.

Caterpillar also developed its first rubber-tired tractor in the late 1930s. The stylish DW10 was designed to pull scrapers at higher speeds than crawlers could. However, its introduction in 1941 was overshadowed by war clouds in Europe.

During World War II, Caterpillar’s plant hummed with activity around-the-clock as it mass-produced tractors for the U.S. military and its Allies. Machines made in East Peoria stormed the beaches at Normandy, built airfields on South Pacific islands, graded highways in Alaska and cleared jungles in Southeast Asia. After fighting ceased, the tractors were used to clear debris and remove rubble in heavily damaged areas.

More than 20,000 D7 machines were made for the U.S. Army, Navy and Marines. In the process, Caterpillar earned a reputation for dependability and reliability.

The term “bulldozer” became part of popular culture due to its superior performance during the war. Numerous photographs published in Life magazine and elsewhere also helped spread public awareness.

Admiral William F. Halsey once said, “If I had to give credit to the instruments and machines that won us the war in the Pacific, I would rank them in this order: submarines first, radar second, planes third, bulldozers fourth.”  

While many of the brutish machines behind those big dozer blades were made by Caterpillar, the actual steel plates, operating mechanisms and winches were produced by suppliers such as Hyster Co., LaPlant-Choate Manufacturing Co. and LeTourneau Inc. Hyster and LeTourneau even had plants in the Peoria area. Other companies made rippers, scrapers, side booms, wagons and other attachments.

However, in 1944, Caterpillar announced that after the war it would begin producing its own blades, buckets, scrapers, and other cable- and hydraulic-controlled accessories. As part of the move, a long-time sales agreement with LeTourneau was terminated.

“Driven by a realization that its postwar business would be heavily construction-oriented, the company was determined that it would no longer be dependent on other manufacturers to supply those essential and profitable items,” says Haycraft.

In 1945, Caterpillar introduced its first bulldozer straight blades operated by cable control units. Angle blades were offered the following year, while hydraulic-controlled blades debuted in 1947. In 1946, the company introduced its first pull-scrapers.

Caterpillar made another strategic acquisition in 1951, when it purchased the Trackson Co. of Milwaukee, a leading supplier of side boom attachments for pipe-laying applications. The company also produced the Traxcavator line of cable-operated, front-mounted scoop shovels.

In 1953, Caterpillar revolutionized the industry when it unveiled the No. 6 shovel, the first crawler loader built entirely with a hydraulic system. It enabled smoother, more precise control over the machine’s movements, unlike traditional cable-operated mechanisms. This innovation helped Caterpillar become a leader in hydraulic technology.

 

Boom Years

During the postwar period, Caterpillar aggressively expanded its manufacturing capacity to meet growing demand for machinery.

The two decades between 1945 and 1965 were boom years for the company, driven by the growth of suburbia and massive construction projects in the United States, ranging from Cold War missile sites to the interstate highway system. Other factors included widespread demand for new airports, bridges, dams and reservoirs, in addition to the development of the oil industry in the Middle East.

Because of the decision to make earthmoving accessories in-house, floor space in the East Peoria factory was limited. Backlog orders in 1946 were the largest in Caterpillar history, so the company announced a $30 million expansion plan that would add 1.8-million square feet of space, including a new engine factory. In 1947, the initiative was increased to $43 million, including a fabrication and tractor assembly building.

“Caterpillar was absorbed in the early postwar years with getting its bulldozers, controls and scrapers into production,” says Haycraft. “That entailed [blades] and a matching crawler-drawn scraper model of each tractor model, as well as several types of cable and hydraulic controls.

“When the [expansion] program was completed in 1949, the company had gone from 79 acres under roof in 1946 to 128 acres, all but the small San Leandro plant located in East Peoria,” Haycraft points out. “Recognizing the potential for crippling labor problems if it continued to concentrate in one location, Caterpillar’s next wave of expansion…took place outside Peoria when more than 1 million square feet were added in 1951 in Joliet, IL, [and] in 1954, 909,000-square feet were added in Decatur, IL.”

Caterpillar also began a global expansion effort, opening overseas factories in Brazil, Scotland and elsewhere. “Extremely global-minded, Caterpillar was one of the first U.S. companies after World War II to recognize the importance of the foreign market,” explained an article in the April 15, 1965, issue of Forbes magazine. “In 1950, Caterpillar got about 27 percent of its sales abroad, practically all in the form of shipments from the U.S. Today, it gets 45 percent of sales abroad, about a quarter of it from foreign plants.”

“At times during the 1950s, Caterpillar people in various buildings must have felt like the youth who outgrew his clothes,” remarked Executive Vice President C.A. Woodley in an article that appeared in the February-March 1960 issue of Caterpillar News and Views, an employee magazine. “Sales simply called for more product than they could turn out.

“To meet the pressure, Caterpillar constructed new buildings, equipped them and hired new employees. Something of a climax was reached in mid-1957, for at the same time 11 new plants and additions were under construction.

“During the decade, the company plowed $365 million into land, new buildings and machinery….We entered the decade with two manufacturing plants, at Peoria and San Leandro. Ten years later, the total had reached nine U.S. plants and five overseas….”

Despite that investment, demand outstripped supply in the mid-1960s. Caterpillar dealers became frustrated by long delays that cost them business. Demand for road building equipment had simply grown faster than production capacity could be added.

“Determined to rectify the situation, the company embarked on a massive $535 million investment binge for additional manufacturing capacity over the next 10 years,” says Haycraft. “Manufacturing floor space went from 9.5 million square feet to nearly 17 million square feet, yet still…products were frequently on allocation.

“A contributing factor to the insatiable appetite for additional manufacturing space was Caterpillar’s highly integrated nature, which gave rise to the practice of making…most…of its products,” notes Haycraft. “The manufacturing department had unbounded faith that there was almost nothing it could not make cheaper and better than anyone else….Make-or-buy analyses were conducted, but the results almost always called for more space and machine tools.”

Some of the only components Caterpillar did not make were engine bearings and roller bearings used for transmission and final drive gear applications, in addition to commodity items such as bolts, gaskets and bushings, which were purchased in large quantities from various suppliers.

A good example of the company’s vertical integration philosophy was illustrated by the new 225 excavator, which debuted in 1972. The groundbreaking hydraulic machine was assembled at Caterpillar’s plant in Aurora, IL. Among other things, it was the company’s first product to sport a stylish black track-type undercarriage.

“Many of the assembly and testing concepts used are as new and exciting as the 225 excavator itself,” proclaimed at article in the December 1972 issue of Caterpillar World, an employee magazine. “Assemblers build the machines largely from complete subassemblies in Caterpillar’s first large-scale use of the units.”

Many in-house facilities produced parts for the excavator. For instance, the East Peoria plant made flexible couplings for pump drive units, split flanges for hydraulic hoses and single grouser track shoes. The Milwaukee plant fabricated five different sizes of buckets, while the historic San Leandro facility assembled fuel injection systems for the 3160 diesel engine that powered the excavator.

Block and head castings for the engine were made in Mapleton, IL, but they were machined in Davenport, IA. The nearby Joliet, IL, factory designed, manufactured and tested all hydraulic pumps, motors, valves and cylinders.

In an article that appeared in the January 2004 issue of ASSEMBLY magazine, Jerry Palmer, vice president of Caterpillar’s wheel loaders and excavators division, defended the company’s vertical integration strategy. At the time, many firms were outsourcing huge chunks of product assembly to third-party contract manufacturers.

“We’re still very much a vertically integrated company,” explained Palmer. “We manufacture our own engines, transmissions, final drives and much of the hydraulic systems used in our products. Like most companies, we’ve moved to some outsourcing, but we still keep all of our core technology strengths internally. Manufacturing will continue to play a major role. We’re committed to it, because we have to control our own destiny.”

Caterpillar’s assembly process has continually evolved to keep up with new products and new types of production equipment. Like many early automobile, truck and tractor manufacturers, crawlers were originally made one-at-a-time at static assembly stations by teams of mechanics who moved from one workstation to another.

However, successful implementation of moving assembly lines at bigger manufacturers such as Ford Motor Co., General Motors Corp. and International Harvester Co. caught the attention of engineers at Caterpillar legacy firm Holt Manufacturing Co. By 1923, its plant in East Peoria was producing crawler tractors on a linear, progressive assembly line. Holt also invested in new methods of scheduling and organizing production activity at the facility.

“An infusion of fresh management talent, well-schooled in the new ‘scientific management,’ was brought to East Peoria,” explained an article entitled “Century of Change” in the June 1984 issue of Caterpillar World. “Factory layout, forms and procedures were quickly altered to improve material flow in the shop.

“Schedules—and the order in which schedules were to be run—were no longer made by foremen ‘at the machine’ as in years past. Instead, master schedules determined lot sizes and priorities. Time studies were used to establish performance standards for each job. Comprehensive records were kept on the progress of each employee.”

Despite those changes, material handling relied on some archaic methods. For instance, small Caterpillar tractors were used to transport parts and components throughout the factory.

An article in the Nov. 10, 1927, issue of American Machinist magazine explained how crawler tracks were moved: “After the track units have been assembled, they are picked up by a crane and laid on a long shop truck. The truck is fastened behind a small [tractor] and hauled to the assembly department. These small tractors are used extensively.”

However, as production of diesel engines and tractors ramped up in the 1930s, Caterpillar engineers adopted the latest assembly tools and equipment, such as moving assembly lines. The factory was also retooled with overhead gantry cranes and jib hoists to transport heavy subassemblies such as crankshafts and cylinder blocks.

State-of-the-Art Engine Plant

When a new 925,000-square-foot engine factory opened in East Peoria in 1949, it was the envy of the manufacturing world.

“The plant is modern in construction with a high ceiling and is provided with a forced feed system of fresh filtered air to promote clean, comfortable working conditions,” noted an article in the Feb. 1, 1949, issue of Automotive Industries. “Another interesting feature of the building is a well-designed system of overhead fluorescent light sources which gives an illumination of 30 foot-candles at the working level.

“Fortunately, from the standpoint of plant management, the operation was visualized from scratch for a specific floor plan in keeping with the philosophy established for producing the given number of large diesel engines.

“Having established the desired floor plan, it was then possible to design the building around it. This method of approach is ideal from the standpoint of the manufacturing department, since it avoids the compromises in layout usually necessary if the floor plan must be made to fit the building.

“The plant has been divided into a series of self-contained units running in parallel rows, each one equipped for the complete processing of major parts of the engine, such as crankshafts, cylinder blocks, cylinder heads, connecting rods, pistons and liners. Raw materials are fed in at one end and all operations for each of the lines start at this end. With this arrangement, finished parts of the engine wind up at one major bay in the heart of the building within easy reach of the engine assembly lines.

“When it comes to engine assembly, Caterpillar has created an innovation of more than passing interest. The entire floor area occupied by the three major final assembly lines, engine block testing and industrial engine erection, is completely isolated from the manufacturing area by a solid wall. Except for proximity, the assembly area is a separate plant to all intents and purposes, insulated from the activity and effects of metal cutting.

“Because Caterpillar moves large tonnages of heavy parts rather than a heavy volume of small parts, reliance is placed primarily upon a special arrangement of heavy-duty gravity roller conveyors for each unit. Heavy lifting is done by overhead cranes and hoists.

“Interdepartmental movement of raw materials and finished parts is handled by means of an industrial railroad system within the plant, with long trains of small flat cars hauled by rubber-tired tractors. In other cases, such as the crankshaft drilling lines, the long process machine is fitted with its own table built-in conveyor for moving work from one station to another.

“The plant has 18,000 feet of gravity roller conveyor lines, one metal belt running 80 feet, one fabric belt 80 feet long…and a 750-foot overhead line. In the assembly department, they have three power-driven assembly lines totaling 600 feet, 4,000 feet of gravity roller conveyors and an extensive installation of overhead monorails for electric hoist movement.

“Engine assembly lines are skillfully organized for the integration of engines on a power-driven floor conveyor….At the start, the block is mounted on a special stand on the conveyor in an inclined position with the crankcase end up to facilitate the installation of the crankshaft, connecting rods, pistons and fastenings.

“At about mid-point along the line, the subassembly is lifted off the stand, turned upright and moved to another assembly stand for the final operations. At this point, the stand used for the initial subassembly is lifted off the conveyor by a hoist and hooked onto an overhead rail which returns it to the start of the line by gravity.”

By the early 1950s, Caterpillar’s production process was fine-tuned. “Like a huge funnel, the Peoria plant pours its resources into its assembly lines,” boasted Fifty Years on Track. “To the lines are channeled forgings, castings, weldments, the pieces and parts that are bolted, pressed and set in place.” For instance, the final drive assembly of the D8 tractor was assembled with 26 large bolts and a pneumatic air tool.

“The [machine] is the product of two lines—one for its engine and another for the tractor itself. First of these is one of three in the company’s new engine factory….Eighty men work along the engine line…they lower the D8’s 336-pound crankshaft to the block and bolt it between seven pairs of aluminum bearings…then add pistons, crankcase, cylinder heads and starting engine…142 men work on tractor assembly and add steering clutches, sprockets, fuel tank and floor plates. At the end of the 504-foot tractor line, dozens of machines (two other models in addition to the D8) roll out onto their own tracks each day.”

New Conveyor Technology

To keep up with growing demand, Caterpillar opened a state-of-the-art 550,000-square-foot diesel engine assembly plant in Mossville, IL, in 1959. It produced a wide variety of engines in 13 size ranges for various industrial applications.

“There are about 25 basic types and within this group are about 125 configurations, and options in such variety as to make the output practically custom-built to the purchaser’s specifications,” explained an article in the June 15, 1960, issue of Automotive Industries.

“All engines at the Mossville plant are built on moving assembly lines. The lines [are 5-feet and 7-feet wide]. Both are steel plate-type conveyors flush with the floor. Assemblers can walk about the engines or ride the conveyors.

“Parts and assemblies are stored in bins along both sides of the conveyors. Pneumatic and electric torque wrenches, and [other] assembly tools, are suspended overhead so that they can be pulled down to working position as needed.

“Another device installed on the assembly floors is the transfer car, to carry engines or equipment from one bay to the next, and therefore from the range of one travelling overhead crane to the next. These cars, flat bed and of steel sheet, run on recessed tracks, each track just long enough to carry the engines to the next bay—about 15 feet. They are electrically driven, remote-controlled transfer cars. One man can move engines from one crane reach to the next.”

Several years later, the Mossville plant built a new assembly line to mass-produce the 1676 truck engine. It featured carousel and monorail conveyors to address ergonomic issues, improve material flow and increase productivity.

“Manufacturing has used conveyors, new ideas, new techniques and new machines to cut down handling time, make jobs easier and make the line efficient and continuous,” noted an article in the August-September 1966 issue of Caterpillar World. “As the truck market grows, this new line will permit the industrial division to produce the great number of engines required. Already, it has had another important effect—the men who assemble, paint and test the engines are finding their jobs more interesting, safer and less tiring.

“The unique carousel makes a nonstop trip around the engine test area. Each plate on the 385-foot floor conveyor is crescent-shaped to turn corners. Each plate carries one engine.

“Once on the carousel, an engine moves around the test cell block until one of the cells is open. After testing, the engine is lifted again onto the carousel, and moved on until it reaches the next destination—the adjustment floor or the paint line.

“The overhead monorail system permits an assembler to move engines easily onto the carousel…or from the carousel into a test cell.

“On still another part of the conveyor system is an overhead carousel monorail. This carries engines from the end of the first section to the second section of the assembly line. This line is 450-feet long—half again as long as the normal engine line.

“When engine assembly begins, the engine block is set in a vertical position. This permits quicker and easier installation of the crankshaft, pistons and rods…and reduces the possibility of crankshaft damage.

“In the test area, each of 14 test cells is soundproof and receives a constant supply of fresh air. Controls are located in a dual console outside the cells. One assembler is in charge of two test cells.

“The console reduces the need for the test assembler to work inside the test cell after he has connected the engine to a dynamometer….[This] has made the job of testing engines cleaner, safer and considerably easier on the ears….”

Welding Wonders

Caterpillar has long been regarded as a leader in welding technology. Various metal fabrication techniques were honed by generations of engineers and operators using the latest tools available.

As tractors became bigger and more powerful in the 1930s, Caterpillar engineers were forced to develop new assembly techniques and production processes. That required a change in thinking from just nuts and bolts to brazing and welding.

“Typical bolted joints included all engine and frame mounts, drivetrain components, the undercarriage, fenders, seats, fuel tanks, hoods, exhausts, and even the ‘pony’ motors (twin-cylinder gasoline engines used to start large diesel engines for decades, until they were replaced with direct electric starting in the late 1960s),” says Kurth, whose organization has restored a variety of vintage Caterpillar tractors.

“The only subassemblies and parts that were welded were the swing arms on the undercarriage of the tractors,” explains Kurth. “There really wasn’t any welding added on the tractors. That came more with the equipment they pulled and attachments, such as the framework for the front blades. The joints were complimentary and parts could be used on models for several years, even as new units were introduced.

“Many welding techniques in the earthmoving industry were pioneered by Robert G. LeTourneau, who played a significant role in developing machinery and items for Caterpillar,” says Kurth. “He experimented with welding different types of metals and he developed techniques for fabricating large subassemblies.

“It wasn’t until 1931 that welding was introduced on heavy machinery,” notes Kurth. “This was largely credited to LeTourneau’s lowboy scraper.”

According to the Antique Caterpillar Machinery Owners Club, the first fully welded Caterpillar tractor didn’t appear until the D6 machine in 1941.

Before the arrival of robots in the early 1980s, all welding at Caterpillar was performed manually. That meant workforce development and training was critical, especially during the early days of World War II. 

The February 1942 issue of Factory Management and Maintenance described a training program “that is being used with great success at Caterpillar Tractor Co. to speed the training of welders. A transmitter is installed in the instructor’s helmet, a receiver in the learner’s. The one-way telephone permits the instructor to point out the learner’s possible mistakes and discuss problems as they occur under actual welding conditions.”

Caterpillar’s postwar factory expansion in East Peoria included a new 875,000-square-foot steel fabrication factory that was equipped with state-of the-art manual and semiautomatic welding tools.

“One of the outstanding production lines in the steel fabrication factory is employed in manufacturing steering-clutch and bevel-gear housings for huge diesel-powered tractors,” explained an article in the November 1949 issue of Machinery magazine. “The housings are fabricated by welding together blanked and formed steel plates from ¼- to 5/8-inch thick and large steel castings. The weldments, weighing approximately 1,800 pounds each, are machined to precision tolerances.

“The steering-clutch cases were previously of one-piece cast-iron construction. By adopting welded steel construction, a lighter, stronger and better quality housing was obtained. Also, maintenance in the field is facilitated, since repairs can be made by welding.

“Another advantage of the new design is that the case can be attached directly to the main frame arms of the tractor, making an integral assembly. Stub arms, welded to the case prior to machining, permit welding the case to the tractor frame at assembly without distorting the accurately machined surfaces.

“As is often the case in improving the design of a product, many difficulties were encountered in manufacturing. In determining the sizes of the component parts of the weldment, allowance had to be made for warpage, shrinkage and expansion occasioned by welding. The need for oil compartments in the intricate-shaped weldment necessitated pressure-tight welding. The sequence followed in welding the various components was determined by trial.

“Blanked and formed steel plates, welded subassemblies and cast-steel members flow to assembly and tack-welding fixtures….Originally, all parts of the steering-clutch case assembly were tack-welded together in such fixtures. However, dimensional accuracies could not be maintained with this method because of the distortion encountered.

“Now, only the box section of the assembly is formed in the first tack-welding fixture, and the cast steel end plates, stub frames and end bosses are tack-welded to the assembly later….Even with this procedure, the subassemblies must be made to a predetermined size and shape to obtain the desired size after welding….

“After the tack-welding operations, the assembly is progressively moved from station to station on the welding line. Welding positioners, provided at each station, permit rotating the assembly to the desired position. Approximately 20 pounds of electrodes are used in welding the subassemblies for each steering-clutch case, while 50 pounds more are consumed in the final welding of the assembly…using from 320 to 370 amperes for the metal arc-welding operations.”

Quality Control

During the 1950s, Caterpillar engineers also pioneered a variety of quality control initiatives, such as portable weld inspection equipment. 

“The [nondestructive test] units are used daily [by] some 700 welders [who] work three shifts a day fabricating tractors,” noted an article in the April 1957 issue of Welding Engineer. “Because of the importance of their operation, the welders…are tested regularly for proficiency. Each man makes monthly test welds which are fully inspected, evaluated and stress-tested by the plant inspector’s staff.

“However, the firm realizes that proficiency tests cannot constitute a control system—even the best welder can have a bad day. The company investigated several inspection techniques—including X-ray and coring—before deciding on the magnetic flux method. Other methods were rejected, because tests reportedly did not permit inspection of more than a very low percentage of welds at reasonable cost.

“The inspection staff dismissed simple visual examination because, particularly with modern, semiautomatic submerged-arc welding, welds looked sufficiently sound to fool even the best inspector more often than standards would permit.

“After a careful study of the magnetic particle technique, Caterpillar’s inspection staff concluded it was an effective, accurate weld testing tool. Its speed permitted it to be used economically on a relatively high percentage of total weld production. Surface cracks were accurately located. Further testing indicated that the system offered sufficient sensitivity to find even sub-surface weld defects….

“The Peoria firm’s inspection system calls for regular examination of about 30 percent of all welds. It is geared for 100 percent inspection whenever the need arises…. It is continued until inspectors locate the source of the problem, eliminate and receive satisfactory test reports for a reasonable period of time.

“Each unit is portable, and is rolled from one location to the next. A unit is powered from outlets installed in various examination areas. A small prod permits one man to handle the complete process. This unique gadget also helps standardize the inspection process. Prods are designed so that contacts are either 3- or 6-inches apart….

“With the procedure standardized, Caterpillar claims it is difficult to miss any indication of voids, slag or inclusions. All such indications are noted and plotted on a master quality control chart. A defect found in a critical area, regardless of how slight, is marked and immediately removed. The firm feels this ability to spot slight flaws, especially in critical areas, has prevented a great deal of trouble in the two years since nondestructive testing was installed….

“Scientific inspection brought intelligent control to what once was merely an educated guess on a critical [brake anchor plate] weld. Results show up in low cost of the program and the high quality level which is maintained. The firm feels it is getting as sensitive and reliable an inspection as its product demands, without incurring costs of either over- or under-inspection.”

In the late 1950s, Caterpillar was one of the first companies of its size to make extensive use of computers. It also built a state-of-the-art tech center to develop new products and production processes. In 1962, those investments paid off when the R&D department made an important welding breakthrough.

Inertia friction welding enabled the forging of many previously difficult-to-weld materials, such as super alloys used in turbochargers. It produced high-strength bonds in dissimilar materials, while welds also exhibited excellent fatigue properties. Caterpillar commercialized the technology in 1965.

According to an article in the March 1994 issue of Welding Journal, “Caterpillar made its first machine…to weld its own precombustion chambers for diesel engines….[The system] used flywheels as a capacitor to store all or part of the energy for welding.”

Adams Engineering Die & Tool Inc. acquired the patents, rights and manufacturing knowledge from Caterpillar in the 1970s and formed Manufacturing Technology Inc. (MTI). Today, the inertia friction welding process has evolved into other joining methods, such as friction stir spot welding and spin welding.

NOTE: Part 2 of this article will appear in the May issue of ASSEMBLY.

For more information on the history of other major U.S. manufacturers, read these articles:
GM Centennial—Manufacturing Innovation.
IBM—Big Blue Turns 100.
Whirlpool—From Humble Roots to Global Production Power.