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BILLION-DOLLAR TRAIN TRIP FOR CAT; CEO Owens' big diversification play pleases Wall St., puzzles rail industry.

Publication: Crain's Chicago Business
Publication Date: 16-OCT-06 		Format: Online
Delivery: Immediate Online Access
Full Article Title: BILLION-DOLLAR TRAIN TRIP FOR CAT; CEO Owens' big diversification play pleases Wall St., puzzles rail industry.(Caterpillar Inc.)(James W. Owens)

Article Excerpt
Byline: BOB TITA

There are no shining yellow bulldozers rolling out of Caterpillar Inc.'s newest plant in East Chicago, Ind.

Instead, workers are busy repairing train wheels; up to 200 worn-down wheel-and-axle sets roll into the plant every day. The wheels, measuring up to 3 feet in diameter, are dunked in a hot bath and taken apart. Some components are replaced, while others are ground smooth again on giant lathes.

It's the type of grimy, old-school industrial work that's fallen out of favor with much of Corporate America-but it's the cutting edge of Cat CEO James W. Owens' diversification strategy. That's why Mr. Owens acquired Progress Rail Services Inc., owner of the East Chicago plant, for $1 billion in May. And while it went over well on Wall Street, railroad industry insiders question whether acquiring the remanufacturer will boost Cat's bottom line much.

"The railroad repair business is...

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