In addition to the new operational direction, Schaefer also began to revamp the organization by changing the corporate culture, creating employee involvement programs and leveraging the power of many individuals versus a select few as done in the past. .
George Schefer and Donald Fites faced and overcame many obstacles during their terms. During George Schefer's term 1985 - 1990 he to face 1). a global recession, 2). a costly strike, 3). lower mark-ups on light construction equipment, 4). high production costs, 5). outdated plants and equipment, 6). low demand for heavy equipment for highway construction, and 7). the value of the dollar rose steeply. Throughout Donald Fites term 1990 - 1999 he faced costly labor strikes as well, but also had to overcome 1). a decrease in the company's earnings as well as 2). lower industry-wide demands in both the domestic and international markets, and 3). Fite's management style.
In February of 1999 Donald Fites retired, leaving newly elected CEO, Glen Barton, to face many challenges. .
1). Barton could not count on Caterpillar's continual success due to the downturn of the North American construction industry. .
2). During Barton's first year (2000), the company's sales declined by 6 percent and earnings by 37 percent. Also, Caterpillar's share price traded close to its 52 week low in March.
3). An accelerated change over from diesel generators manufacturing to natural gas generators for manufacturing. .
Caterpillar needed a strategy implemented that would allow it to withstand the forecasted grind of our economy and the construction industry as a whole. Barton needed to decide whether the strategies of the previous CEOs needed to be refined, reversed, or totally restructured.
Caterpillar needs to recognize that global competition is increasing and that in order for it to maintain its role as the industry leader; it must diversify and expand its product line of parts and components as well at its" services, into other areas without straying from its high quality of standards.