Cat sees sales boost from delay of lower-emissions engines

Diesel Fuel News, Nov 25, 2002

Cat reports "improved fourth-quarter customer demand" for its "bridge" heavy-duty highway diesel engines that fall a little short of U.S. EPA's 2.5 grams/bhp-hr NOx HC limits that began in October. Cat says the boost means it "will reduce the number of temporary manufacturing shutdowns and employee layoffs." Cat aims to comply with those lower EPA emissions limits with its 'Acert' engines coming next year, and pay "non-conformance penalties" on its intermediate-emissions "bridge" engines until then.

Meantime, Cat's glowing over positive Wall Street analyst reports that cite the clever "bridge" strategy and the upcoming "Acert" engine (which avoids exhaust gas recirculation) as boosting demand for Cat engines over those of competitors. The company also should benefit from construction and agriculture rebounds seen coming in 2003, according to one analyst.