While the recent acquisition closure announcement was comprehensive in some areas, there were still a number of unanswered questions with regard to particular points going forward, especially with regard to product integration; and synergies between existing product markets and componentry. International Mining Editor Paul Moore sought the answers to some of these questions in a scheduled conference call with Chris Curfman, CAT VP and Head of the Mining Sales and Marketing Division; Luis de Leon, previously Chief Operating Officer for Bucyrus, who will now lead the new Mining Products Division; and Caterpillar Vice President Dave Bozeman who will lead the Integrated Manufacturing Operations Division.

First was the issue of the existing Bucyrus truck range and how it is to be integrated into the CAT organisation as there is some degree of overlap between larger Bucyrus trucks and the new CAT electric drive truck range, while both ranges of trucks have different component suppliers on the whole (with CAT making many of its own components where Bucyrus does not), and there are some strategic facilities such as the North Hauler JV in China that have proved very useful to the Bucyrus truck business (and as part of Terex Mining before that) in terms of marketing mining haul trucks to China, an area where CAT has not been hugely successful to date. It was confirmed in the call that CAT would continue to work with North Hauler. In terms of the products, the Bucyrus range will keep the Unit Rig brand as an interim brand for those trucks, while a process of integrating more CAT components such as engines, transmissions, hydraulics and drives into the Bucyrus trucks is ongoing. As the truck business is one area where there is overlap, this integration has not been explored as much to date as some other product areas due to DoJ restrictions, so it is early days. Crucially, however, the Bucyrus factory in Acuna, Mexico, where most of its trucks are built, is to stay open for the moment, while the VPs stated that they believed there was a “home and a place” for both the Bucyrus and CAT mining haul truck lines in the market; partly due to the high level of demand for both mechanical and electric drive products, and partly due to the fact that to some extent they have been successful in different markets. Both will continue to be marketed and Bucyrus trucks will continue to be serviced and supported as they are today. Additionally, the point was made that the Bucyrus truck line will benefit from the better pricing structure that CAT gets for some components due to economies of scale. It was clear, however, that this process of sorting out the final truck line will take some time. For other products such as the former O&K excavators, this process is much further advanced; with these products already being sold and serviced by CAT dealers in many regions anyway.

In the dealership area, it has already been outlined that the Bucyrus owned dealerships will be offered for sale to the CAT network of independent dealerships, of which about 45 out of some 188 have a key mining focus. This process will occur over the next 18 months, when it is expected that many CAT dealerships will absorb some of the key Bucyrus sales/service assets around the world, especially those where Bucyrus has had a better penetration to date on the mining side – thereby enhancing the existing CAT dealer reach to new parts of the world. In addition, it is expected that a number of Bucyrus field engineers will join CAT dealerships, if anything due to the significant skills shortages for these types of people in the industry generally.

Finally, on the underground products, the question was asked about synergies between existing CAT underground products with LHDs and trucks; the Bucyrus coal ranges including longwalls; as well as other projects such as the Bucyrus hard rock cutting plans. The team seemed bullish about possibilities there in the future, from seeing how the boost of higher CAT investment levels can help to grow the former Bucyrus underground business both in hard rock and coal; to how new focus areas in underground drilling and hard rock cutting underground can be addressed by the unified CAT and Bucyrus ranges. Interestingly it was mentioned specifically that areas of the Bucyrus product range in coal could enhance the existing CAT range for hard rock, even down to utility vehicles and people carriers. CAT is already investing in its own underground lines through new facilities, such as the factory in Thailand, so it will be interesting to see how aspects of the Bucyrus offering can be included in these plans going forward.