Progress Rail reportedly acquiring EMD

As a matter of information:

http://news.moneycentral.msn.com/catego ... ONS&isub=1

MX

Just confirmed by CNBC at 11:30 Central time. Only took 20 years...

"Caterpillar Inc., the world’s largest maker of construction equipment, agreed to buy locomotive manufacturer Electro-Motive Diesel for $820 million to expand its rail and transit businesses."

Read more at: http://www.businessweek.com/news/2010-0 ... ate2-.html

With Caterpillar out of the on highway truck engine market they should be able to focus on getting this merger off the ground. Talks have been going on for years. I wonder if the Cat engine will help or hinder sales? Was the LaGrange plant sold or just shut down? It is in Il. where Cat is based... I have worked for a Cat dealer for 24 years and have seen them buy up plenty of businesses. They pump money into them and spin off what they don't want.They have a pretty good track record when it comes to these things. Barber Greene,CMI andPerkis to name a few.... Curious to hear what you guy think?!

As I recall, the sticking point the last time Caterpillar tried to buy EMD was that the union(s) at the London (Ont) plant didn't like them. So, have the unions been heard from this time?
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Pinewald Station--
The LaGrange plant has been... downsized? Locomotive assembly discontinued, and the main locomotive-erection building torn down, some of the land sold. But I think-- someone will correct me if I'm wrong-- that part of the plant is still active, and that locomotive components are manufactured there. ... LaGrange is a Chicago suburb, Caterpillar's hq is in Peoria, on the other side of the state.

If Progress Rail wanted to market their own CAT powered locomotive they could build it just copying what they see from the EMD's they work on and just buy what they don't make from EMD like Motive Power does. CAT does compete in the marine and power products side of things directly with EMD and I wonder what will happen to all of EMD's distributers. It doesn't make sense to pay all that money just to effectively put EMD out of business.

Thanks for the info Allen. Cat has quite a few factories around Illinois so adding another shouldn't be a problem. I wonder if they intend to refurbish LaGrange, stay in Canada, move to a Progress site or build a completely new plant? I would love to see rhe EMD initials preserved like EMD-Progress or just EMD? Somehow I think EMD will vanish in name!

RickRackstop wrote:If Progress Rail wanted to market their own CAT powered locomotive they could build it just copying what they see from the EMD's they work on and just buy what they don't make from EMD like Motive Power does. CAT does compete in the marine and power products side of things directly with EMD and I wonder what will happen to all of EMD's distributers. It doesn't make sense to pay all that money just to effectively put EMD out of business.

As far as CAT building a copy of an SD70 series locomotive or the like they would be sued silly...They are buying EMD to get into the new build freight locomotive in North America in a big way.They have desired to be in that market for some time, as evidenced by the unsuccessfully partnership with MK Rail on the MK5000C. Given that they almost bought EMD when GM put it on the auction block (the deal only failed due to Union objections) this is not even slightly surprising. Anyone who knows Cat's history knows they have bought up companies with product lines they wanted numerous times, Perkins diesel engines and DJB articulated dump trucks are two examples. Solar Gas Turbines is another.
I also suspect that the EMD name will remain due to it's Global reputation, it will just stand for the the Electromotive Division of Caterpillar rather than of General Motors..
I also expect the 710 engine to be continue to be produced, at least for the near term, as it is very popular with the Industry both here and abroad...

How could I forget DJB!? Cat throwsmoney at ventures until they work.....

About time! I'm definitely curious about the union implications too. I suspect that they'll be happier to allow the deal (or have already been happy to allow it) since they know EMD will be getting more funding and probably more business.

Also, I wonder if this merger will mean a new breath of life into the H engine? That's a niche that Cat doesn't yet fill, and EMD hasn't really had the resources available to invest in it meaningfully, not since well before the GM spinoff.

mtuandrew wrote:About time! I'm definitely curious about the union implications too. I suspect that they'll be happier to allow the deal (or have already been happy to allow it) since they know EMD will be getting more funding and probably more business.

Also, I wonder if this merger will mean a new breath of life into the H engine? That's a niche that Cat doesn't yet fill, and EMD hasn't really had the resources available to invest in it meaningfully, not since well before the GM spinoff.

The "H" engine, made only in 16 cylinder version, competes directly with the CAT 3600 series and also with the smaller MAK engines also owned by CAT.

I would think that Cat would be far more interested in the 710 series, which is something that no one else in the world other than EMD can offer -- a large, medium speed, 2-cycle diesel engine -- and a proven and time-tested one at that. The 265H really isn't very unique, and as Rick said, Cat (and others) already have similar engines in that category. The 710 is the crown jewel of EMD and is probably one of the main reasons that EMD has been able to survive up to this point in time.

hmm GE actually builds the same 710 engine, but The Cat purchase will pretty much kill any two stroke, including the 710 engine.

Are you thinking of the 645? This is the first I've heard of GE building a 710 clone...

your probably right but with tier 3 looming the 710's will be short in production.
no way to get a two stroke to comply, without massive loss of horsepower.
current units would be grandfathered but new once need something better and Caterpillar may be just the answer.