Caterpillar to exit TBM business
By Chris Sleight07 May 2013
Caterpillar is to exit the tunnel boring machine (TBM) business with the closure of the former Lovat factory in Toronto, Canada. The company said it did not plan to relocate production to another facility. The closure of the Caterpillar Tunneling Canada Corporation (CTCC) plant will affect 330 people.
Caterpillar has only been in the TBM business for five years, having acquired Lovat in mid-2008 for an undisclosed sum. At the time Caterpillar group president Stu Levenick said, “This acquisition is Caterpillar’s entry into the rapidly expanding tunnel boring machine business, and it represents an excellent strategic fit for our companies and customers we serve around the world.”
However, a statement from Caterpillar announcing the factory closure said, "The company has since determined the business no longer represents a strategic growth opportunity."
Mr Levenick added, "We continuously evaluate our strategic portfolio to ensure alignment with our long-term strategy and have concluded the tunnelling business no longer fits that strategy. As a result, we have elected to exit the business. We know this is difficult news for our employees and their families. We acquired a great team when we bought this company, and while they have demonstrated an ability to build quality products, the future prospects of this business no longer align with our expectations."
The plant is expected to cease production in mid-2014, with parts and technical support remaining available until the end of 2016.