Oberhelman to analysts: 'no drama' behind decision to retire
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- Published on Tuesday, 25 October 2016 15:35
- Written by Paul Gordon
Seeking to debunk the notion he is being forced out at Caterpillar Inc., Doug Oberhelman on Tuesday told stock analysts there was “no drama” surrounding his decision to retire at the end of March 2017.
In a conference call with the analysts that coincided with Caterpillar’s third quarter financial release, Oberhelman was adamant that the decision to go before his 65th birthday, when company bylaws would require he retire, was his alone.
“There was no drama here, contrary to a lot of the stuff that’s been going around. I picked the timing,” Oberhelman said at the outset of the conference call.
He said there also have been questions about the Caterpillar board of directors’ decision to split the duties of chairman and CEO for the first time since 1990. The board decided to do it now since company leadership will be in transition, he added.
Jim Umpleby, currently a group president, was named to replace Oberhelman as CEO effective Jan. 1. David Calhoun, a director since 2011, will became the non-executive chairman of the board on April 1, 2017. “I am very much supportive of Jim and the process,” Oberhelman said.
“Jim will run the company as usual and Dave will coordinate the board as executive chairman. Again, no drama, just a different way of doing thing and I think we’ll carry on without missing a beat,” he added. “I am excited to move into the next phase and I am very excited for Jim and the executive team. We’ve been through an awful rough period the last four years but I do think we’re set up for the future.”
Umpleby was introduced into the conference call and told the analysts, “I have great respect for Doug and I am proud to be part of this team that has kept Caterpillar strong through some of the most difficult market conditions we have ever faced. I will pull together a team of leaders that will refresh our enterprise strategy in the coming months.”
Oberhelman’s retirement after 41 years with Caterpillar was announced last week and it was immediately met with thoughts that it was a board decision because of the fact Caterpillar is in the fourth consecutive year of decreasing sales and profits. The company has remained profitable in that time but mostly because of cost cutting measures the last few years that have included a 20 percent reduction in workforce and the closure of more than 10 facilities.
This after Caterpillar reached its peak in sales and revenues as well as profits in 2012.
Oberhelman has been chairman and CEO since 2009. He replaced Jim Owens, who retired when he was 64, as well, and after a long transition period between him and Oberhelman. The company noted that in its announcement about Oberhelman’s retirement.
However, the announcement came only one day after the Wall Street Journal published an extensive article about some of the moves Caterpillar made under Oberhelman – including the acquisition of Bucyrus Mining Inc. -- that did not turn out well because the bottom dropped out of the mining and energy markets shortly thereafter. That further fueled speculation, particularly by television commentators, that Oberhelman’s decision to retire wasn’t entirely his.
