Caterpillar to stay in truck engine business

The top executive at Caterpillar Inc., which has acknowledged facing an important decision regarding its on-highway truck engines, said Tuesday the company has no plans to exit the business.

"We've been giving it a lot of strategic thought," Jim Owens, Peoria-based Caterpillar's chairman and chief executive officer, told the Reuters Manufacturing Summit in Chicago.

"My expectation certainly at the moment is that we will stay in the on-highway truck engine segment. We are working on exactly how we are going to do that."

Asked if a partnership with truck-maker Navistar International Corp. might be a good fit for Caterpillar's engine unit, Owens said: "A potentially nice fit? Sure." But he quickly added: "Obviously I can't comment. If we had something to announce, we'd announce it."

The North American truck-making industry, which traditionally sourced its engines from independent suppliers like Caterpillar and Cummins Inc., is rapidly changing as more manufacturers move engine-making in-house. That's thrown a big question mark over Caterpillar's diesel engine business and raised speculation the company, best known for its earth-moving equipment, might exit the business altogether.