Caterpillar Expands Remanufacturing Business with Purchase of Automotive Transmission Remanufacturing Company

PEORIA, Illinois, August 18 --

- Growth Opportunity Will Leverage Remanufacturing Competency

Caterpillar Inc. and Remy International, Inc. have announced that Caterpillar Remanufacturing Services ("Cat Reman") will acquire Williams Technologies, Inc. ("WTI"), a leading remanufacturer of automatic transmissions, torque converters, and engines for automotive and medium and heavy duty truck applications. Williams Technologies currently remanufactures over 40 transmission models for a variety of automotive Original Equipment Manufacturers ("OEM") and vehicle platforms. This acquisition represents an expansion of Caterpillar Remanufacturing Services into the automotive powertrain remanufacturing business.

Caterpillar is one of the world's largest remanufacturers, recycling more than 100 million pounds of used iron every year into remanufactured engine, transmission and hydraulic components. The acquisition also builds on relationships already established in the automotive industry by Caterpillar subsidiary Caterpillar Logistics Services, Inc., which is one of the world's largest third party logistics providers.

"This acquisition is an excellent strategic fit, providing an opportunity to leverage Caterpillar's core remanufacturing strengths (core management, reverse logistics, machining of rough castings, salvage technology, etc.) to provide remanufacturing services to original equipment manufacturers in the automotive industry," commented Steve Fisher, general manager of Caterpillar's Remanufactured Products Group. "We are excited about the opportunity to broaden the portfolio of services Williams will offer to current and future OEM customers. We intend to expand our customer base and serve the market in an even greater capacity. Remanufactured components provide Williams' clients with a reliable, lower cost product to offer their dealers and end users, along with the added environmental benefit of returning the iron to a useful life," Fisher said.

Williams Technologies is located in Summerville, South Carolina and employs approximately 500 personnel. Williams will join seven other Caterpillar remanufacturing facilities located in the United States, Mexico and Europe.

"This business has performed very well for us. We believe, however, that it is a very strong strategic fit with Cat's reman business and that as part of Caterpillar, WTI's customers, employees and other stakeholders will realize even more value," said Thomas J. Snyder, president and chief executive officer of Remy International.

Caterpillar and Remy recently signed the definitive agreement for the sale of Williams Technologies. The acquisition agreement will be effective September 1, 2004 subject to the completion of legal and regulatory requirements.

For more than 75 years, Caterpillar Inc. has been building the world's infrastructure and, in partnership with its worldwide dealer network, is driving positive and sustainable change on every continent. With 2003 sales and revenues of US$22.76 billion, Caterpillar is a technology leader and the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. More information is available at http://www.cat.com .

Rusty L. Dunn, Corporate Public Affairs of Caterpillar Inc., +1-309-675-4803, Dunn_Rusty_L@cat.com FCMN Contact: dunn_rusty_l@cat.com