Caterpillar warns of supply chain disruptions

By Dow Jones Newswires
Posted March 18 at 9:48 a.m.

Caterpillar Inc. said disruptions in its supply chain in Japan could sporadically affect the company’s assembly plants elsewhere in the world.

The Peoria-based manufacturer of construction equipment said Friday it is attempting to secure alternative sources for components produced by Japanese-based suppliers in case they aren’t able to provide sufficient volumes of components in the aftermath of last week’s earthquake and tsunami in northeast Japan.

Caterpillar said its plants Sagami and Akashi, Japan, remain open, but production levels have varied from day to day.

“The disruption to the supply chain in Japan has not stopped production at other Caterpillar facilities around the world,” the company said in a written statement. “Moving forward, it is possible those facilities may be sporadically impacted as a result of the situation in Japan.”

On Monday, Caterpillar said it could provide up to $3 million in cash and machinery to support relief operations in Japan. Caterpillar Foundation, the company’s philanthropic arm, will donate $1 million to the American Red Cross for disaster aid. The foundation also will match up to $500,000 in Red Cross donations from employees, retirees and Caterpillar dealers. Caterpillar Japan Ltd., the company’s business unit in Japan, will provide $1 million of in-kind donations of construction equipment and engines to generate power.

Caterpillar also said Friday that world-wide sales of its construction machinery rose 59 percent in the three months to the end February, as strong sales growth occurred across all the company’s geographic markets, according to dealer sales figures released Friday.


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