Caterpillar announces a new global strategy ...

The focus will be on global truck opportunities including North American heavy duty on-highway vocational trucks, as well as technology development for engines worldwide.

Caterpillar and Navistar have signed a non-binding Memorandum of Understanding to pursue the On-Highway truck market jointly. Their plan is to:

• Develop a line of Caterpillar heavy-duty on-highway vocational trucks (i.e. bottom dumps, cement mixers, transfer trucks) for the North American market with product offerings targeted for 2010 introduction.

• Design and manufacture a line of medium and heavy-duty commercial trucks outside of North America, leveraging the two companies' existing distribution capabilities.

• Cooperate on engine development, using best-in-class technology from both companies.

• Develop mid-range engines for light-duty diesel applications such as school buses and utility vehicles.

• Expand an existing manufacturing relationship to include Navistar's MaxxForce on-highway engines and additional REMAN opportunities.

Caterpillar and Navistar bring complementary strengths to the alliance: Caterpillar's unparalleled worldwide distribution capabilitiles, and Navistar's expertise in truck design, development and manufacturing. The alliance supports Caterpillar's commitment to extend its core business and be a total solutions provider, and Navistar's strategy of growing by leveraging its own assets with those of others. What are they going to do to be successful? Simply put, Cat is going to change the way they do business. This collaboration will be a key factor in helping Caterpillar to become a leading global truck supplier.

Caterpillar's 2010 Engine Strategy ...

• Concurrent with this new strategic direction, Caterpillar has decided independently to not supply EPA compliant engines to truck and other on-highway OEMs (original equipment manufacturers).

• Caterpillar and its dealers will continue to provide product support and service well beyond 2010 for all customers who operate Caterpillar on-highway engines regardless of truck brand.

• Caterpillar plans to work together with Navistar to develop best-in-class diesel engine technology for medium and heavy-duty truck engine markets worldwide.

• Caterpillar will continue to concentrate on substantial and growing opportunities to supply engines in the petroleum, marine, electric power generation and industrial markets, as well as to produce engines for our own construciton and mining equipment.