(Adds details throughout on Oberhelman.)
By Bob Tita
Of DOW JONES NEWSWIRES
CHICAGO -(Dow Jones)- Caterpillar Inc. (CAT) said Thursday that Douglas Oberhelman, president of its engine and services business, would replace Chairman and Chief Executive James Owens next year.
The heavy-equipment maker has been eyeing a successor since last year, when Owens signalled that he planned to step down, and was expected to make an internal promotion.
Oberhelman, 56, will take on the CEO-elect role on Jan. 1, overseeing a company forced to throttle back after an extended period of growth fuelled by the global commodities boom.
Demand for its construction and mining equipment collapsed in the wake of the global economic slowdown, forcing deep cost and workforce cuts.
Owens, 63, is a trained economist and one of the most vocal U.S. executives on the issue of free trade.
He will pass the chairman's job to Oberhelman in October 2010, and formally retire under the company's age-limit policy for chief executives.
"Jim informed us in 2008 that he was planning to retire in the fall of 2010 and has worked extensively with the Governance Committee and the Board of Directors over the last 12 months to develop a succession plan to smoothly transition the company into its next phase of executive leadership," said W. Frank Blount, presiding director and chairman of the governance committee in a statement.
Oberhelman joined Caterpillar in 1975 and has held a variety of executive roles, including chief financial officer and management positions for the company's operations in Latin America and Asia. He was elected a group president in 2002.
As president of the engine business, Oberhelman guided the Caterpillar's expansion into sideline businesses that the company considers complementary to its core operations, particularly the acquisition of Progress Rail Services in 2006, a railroad equipment remanufacturing business.
He also oversees the gas turbine engine business, another market the company considers attractive for expansion.
Oberhelman helped broker the company's joint venture with truck maker Navistar International Corp. (NAV) after the two companies had spent years embroiled in patent litigation over engines. He is chairman of venture, NC2 Global LLC, which will build and market Caterpillar-branded commercial trucks and engines in overseas markets that will be sold through Caterpillar's dealers.
Oberhelman was behind Caterpillar's decision to exit the North American truck engine business at the end of this year, rather than face a costly emissions upgrade of its engines to comply with tougher federal regulations on diesel engine exhaust.
-By Bob Tita, Dow Jones Newswires; 312-750-4129; robert.tita@dowjones.com