PEORIA, IL—Caterpillar Inc. announced it has selected the city of Victoria, TX, as the location for the company's new state-of-the-art hydraulic excavator manufacturing facility. Ground breaking for the 600,000-square-foot manufacturing operation is scheduled to take place in September 2010. The facility is expected to begin production in mid-2012. Once fully operational, it will triple the current capacity of hydraulic excavators produced by the company in the United States, and would double the number of Caterpillar employees in the U.S. making excavators. The decision to increase manufacturing capacity and employment in the United States is part of Caterpillar's long-term strategic initiative to develop the appropriate global footprint to competitively produce hydraulic excavators.

"Based on our comprehensive review of possible locations, Victoria's proximity to our supply base, access to ports and other transportation, as well as the positive business climate in Texas made this the ideal site for this project," said Gary Stampanato, Caterpillar vice president with responsibility for excavators. "Caterpillar is committed to maintaining its global leadership position in the excavator industry, and this new facility in Texas will play an important role in our long-term plans to provide customers in every region of the world with the products and solutions they need to help them with their businesses."

"Texas is the best place in the nation to grow your business, and nobody knows that better than the companies that are already here in the Lone Star State," Texas Governor Rick Perry said. "This Texas Enterprise Fund investment in Caterpillar will help create good jobs to Texans, and this expansion is proof that our combination of low taxes, reasonable regulations, fair legal system and world-class workforce is working to attract and retain the best employers in the world."

Victoria Mayor Will Armstrong said, "Victoria is proud to play a role in Caterpillar's plans to expand its hydraulic excavator manufacturing in the United States, while at the same time Caterpillar will be an important part of the work to reinvent Victoria."

Victoria County Judge Don Pozzi added, "I am excited that a company with the global stature of Caterpillar has selected our community and in these economic times, I am certainly happy that Victoria County is positioned to help a project that will put local people to work."

Currently in the U.S., Caterpillar produces two excavator models at a facility in Aurora, IL, where it also produces wheel loaders, soil and landfill compactors, wheel dozers and components. In addition, Caterpillar produces excavators in Belgium, Brazil, China, France, Indonesia, Japan and Russia. The new facility will manufacture the two models now made in Aurora, as well as several additional excavator models now produced in Akashi, Japan, and exported to the United States. The expansion of excavator production in the U.S. will allow the Caterpillar facility in Japan to better serve the growing demand for excavators in Asia. Caterpillar has also recently announced plans to quadruple excavator capacity at its manufacturing facility in Xuzhou, China, primarily in support of growing demand in the Chinese market.

"We are making a number of these long-term investments in our global excavator business so that we are appropriately positioned to support Caterpillar's corporate strategy," said Rich Lavin, Caterpillar group president with responsibility for construction industries. "This will enable us to maintain our global leadership position while delivering superior products to our customers and results for stockholders."