Caterpillar to restructure Mapleton facility, likely to enter joint venture with Grupo Industrial Saltillo.

As part of a $40 million investment, Caterpillar Inc., Peoria, Ill., will restructure its global metalcasting operations through its Mapleton, Ill., facility and could create a new joint venture metalcating facility with Grupo Industrial Saltillo S.A. de C.V. (GIS), Saltillo, Coahuila, Mexico. GIS is the parent firm of Cifunsa, Saltillo, one of Mexico's largest metalcasting facilities, and has existing joint ventures with Metal Technologies Inc., Auburn, Ind., and Norsk Hydro ASA (Castech), Oslo, Norway.

The investment will be used to improve quality and efficiency at the Mapleton plant while lowering costs and restructuring the facility to focus exclusively on large engine castings and liners.

"After a comprehensive study of the Mapleton foundry's performance and capabilities, it became clear that the facility's survival depends on leveraging its ability to produce large castings--an area of proven strength--while shedding the smaller, high-volume castings business where extreme cost pressure makes the facility uncompetitive," said Gary Stroup, Caterpillar's vice president-Large Power Systems Div. "If finalized, the restructuring would enable us to improve the Mapleton facility's competitiveness, maintain critical foundry technology and also achieve a significant cost reduction in castings provided by the joint venture."

The company expects to make a final decision on the new joint venture metalcasting facility in early 2005, pending discussions with the workers' union and final approval by the boards of directors of both companies. If completed, Mapleton would remain the base of Caterpillar's global metalcasting business and the company would hold minority ownership in the joint venture, supporting casting design, quality control and engineering. GIS would manage the day-to-day operations of the new Mexican facility, supplying engine blocks and heads to Caterpillar facilities in Mossville Ill., and Greenville, S.C., beginning in 2007.