Manufacturing Depression Enters Uncharted Territory: Caterpillar Retail Sales Have Never Been Worse

Tyler Durden's picture

Moments ago Caterpillar reported its latest monthly retail sales statistics and the numbers have never been worse.

Not only is the fourth, feeble and final dead CAT bounce in US sales officially over, with December US retail sales tumbling -10% Y/Y, after "only" a -5% decline in November and hugging the flatline for the past few months, but sales elsewhere around the globe were a complete debacle: Asia/Pacific (mostly China) was down -21%, EAME dropping -12%, and Latin America (i.e. Brazil) continuing its free fall dropping by -36%, but global retail sales just posted a massive -16% drop in the past month, tied for the worst annual decline since the financial crisis.

Putting the annual drop in context, CAT sales dropped 12% a year ago, another 9% in 2013, and -1% in 2012, or four consecutive years of declines!

But where the manufacturing depression as seen from the perspective of heavy indsutrial machinery operator has never been worse is shown in the chart below: CAT has now suffered a record 37 months, or over 3 years, of consecutive declining annual retail sales - something unprecedented in company history, and set to surpass the "only" 19 months of decling during the great financial crisis by a factor of two in January!

 

Perhaps while debating whether the US is or is not in a recession, one should also ask how much worse the global industrial depression will get?

Sourece: Caterpillar

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slaughterer's picture

Maybe it is not a manufacturing recession.  MAybe CAT just sucks at building heavy machinery.  

hedgeless_horseman's picture

 

 

Once the assembly lines are converted to armored personnel carriers, MRAPs, tanks, the stock should really bounce.

ParkAveFlasher's picture

They should shift focus to their Trucker Hat division. 

Looney's picture

CAT has been un-dead for a long time.

They can’t sell their overpriced products anymore ($2.5 Million for a freaking tractor???)

The bloated CAT cannot cut prices and it deserves to die. Tesla and Apple are next in line. I think? ;-)

Looney

http://www.zerohedge.com/news/2015-11-19/caterpillar-depression-has-neve...

Shocker's picture

Who needs Manufacturing anymore....... joking sad sad times

Layoff List: http://www.dailyjobcuts.com

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Uchtdorf's picture

To make this article even better, we should be looking at the sales trends of all major competitors of CAT.

NoDebt's picture

Komatsu:  http://www.komatsu.com/CompanyInfo/ir/segment/

Doesn't look as bad as Cat, but not stellar.

Bloodstock's picture

All of their (Cat, Komatsu, etc) shit is too expensive. It's an iron skillet with a motor, some hydraulics, a suspension and a cheap computer. WTF!

Government needs you to pay taxes's picture

thanks QE!  16 is likely the year we see the bust in the used market for these equipment types.  Looking forward to picking up a tracked skid steer for less than $10k!

57-71's picture

Actually the used market will boom.

People will buy used and repair that equipment in order to lower capital costs.

Cash (preservation) is king!

Kprime's picture

you forgot about management's 7 figure salaries and retirements.  let's don't even think about the CEO.

El Oregonian's picture

Couldn't happen to a nicer an early Barry cheerleader. Once they endorsed him I gave up on CAT.

MeetTozter's picture

Bring in Bankruptcy Specialist Trump to "Make CAT Great Again!", at least it will boost cap sales.

DeadFred's picture

The clear solution to this problem is to remove CAT from the DOW. To follow in the footsteps of so many others before them... It won't turn around the economy or help Caterpillar but it helps the DOW index!

Hongcha's picture

Yes, replaced with NFLX.

Kayman's picture

Come on now kids- Cat's sales followed the Fed's free money policy. Reduce interest rates to near zero and financing machiney to build new mines, oil sands, etc. becomes easy. Once capacity is overbuilt but Cat's production lines are built to produce more product, then you slide down the slippery hill.

And for those that have never had to buy so-called "expensive" equipment- you know not of which you speak.  It is the operating life of the equipment on an hourly basis, over the life of the equipment, that is your yardstick- not up front purchase price.

Do you want your oats before the bull eats them, of after he processes them.

PTR's picture

CAT has been un-dead for a long time.

 

They can’t sell their overpriced products anymore ($2.5 Million for a freaking tractor???)

 

But a victory against fiat finance.

booboo's picture

Obama needs to visit the Peoria Plant again, they can slap smiley wax lips on all the background workers, put party hats on them and the CEO can come out with a SS Agent behind him and say great things about the "Obama Recovery" OR ELSE!!

Hongcha's picture

I'm from Peoria.  Peoria has been in a recessionary permafrost since the decline of the Rust Belt in the 1980s.  I shudder to think what will become of my hometown if CAT continues on this trend.  Peoria should go back to being a distillery/beermaking Mecca like it was when I was a kid; when you could smell the hops from the Hiram Walker distillery on the river :)

booboo's picture

Did they ever complete that rusting shell across the interstate from the plant that was started in the 80's

onacho's picture

Yes, it's building LC now; it's been completed since the 90s.  They write manuals and do technician training there.

onacho's picture

A large issue is that Caterpillar, and all companies, converted to Tier IV emissions around 2012.  This means much higher maintenance costs, much lower reliability, lower fuel economy, lower power, and a terrible reputation.  All to get rid of diesel smoke (which falls out of the air in almost no time by itself) and a few parts per million more of oxides of nitrogen, which were lowered severely in Tier III already.

Huh Reeeally's picture

I expect that's true, however if you're on a motorcycle behind one of those big diesel buses then the black diesel smoke doesn't disperse nearly fast enough.

g'kar's picture

time for caterpillar to pupate

E.F. Mutton's picture

I thought will.i.am settled this at Davos? 

_ConanTheLibertarian_'s picture

Slow motion Caterpillar equipment wreck.

Hohum's picture

Caterpillar needs a government contract to move dirt from Point A to Point B.

FrankieGoesToHollywood's picture

And then again from Point B toPoint A.

economessed's picture

Who needs heavy equipment to move the earth when you have millions and millions of unemployed people that are happy to operate a shovel for a few bucks?

WonderDawg's picture

What country do you live in? The unemployed in the USA don't want to pick up anything heavier than an EBT card.

Kayman's picture

"when you have millions and millions of unemployed people"

New China program- dismantle unused buildings and factories by hand and walk the pieces back to the steel plant. 

yrad's picture

How many legs does a Caterpillar have?

JoeTurner's picture

So does this mean that CAT has an overhang of inventory ? Wouldn't slashing prices be the right move ? It looks like they did something between 2010-2013 that boosted sales dramatically.

Doesn't CAT lease the majority of its heavy earth moving machinery ?

I'm thinking that cutting prices will hurt margins but they can't do anything else at this point...

booboo's picture

Jewish Lighting works too.

Iam_Silverman's picture

"Jewish Lighting works too."

How's a menorah going to save them?

Kayman's picture

Yes, there is a lot of Cat inventory, especially at the big dealers. And Cat Financial finances lots of stuff for the smaller/midsize market, but most expensive iron is bought by those that have/had deep pockets.

K

ps  Cat woud rather give you free financing, no down payments, etc before they start slashing and hacking prices.  Knocking down prices is knocking down the brand- that Cat retains its value better than the competition.

DCon's picture

Maybe they should stick to making footwear :)

 

 

actionjacksonbrownie's picture

I've got a couple CAT beer mugs - they are so well made... I don't think they will ever wear out!

 

They do cost more than other beer mugs though.

orangegeek's picture

You don't know what a write off is.

 

 

No, I don't.  But they do and they're the ones writing it off.

Kayman's picture

"You don't know what a "write off" is."

As I always tell the fools that gab on  about "write-offs"- Write me a check for $1 million (that will clear the bank) and I will invoice you for consulting fees, and you will have a $1 million "write-off" for the rest of your life.

moonmac's picture

And the #1 excuse for devaluing our dollar with trillions in Fed Easy Money was so Cat could sell more tractors to China.

Kayman's picture

Cat makes stuff in China.  As usual China wants outside Western technology so they can reverse engineer it.

When they bought and paid for the Clintons, they expect a return on their investment. 

youngman's picture

Lots of Asian Copies now..and much cheaper

hound dog vigilante's picture

do these CAT 'sales' numbers include new leases?

most of CAT revenue comes from leasing, not retail sales... it's been that way since at least 2004.

 

Government needs you to pay taxes's picture

CAT is gonna need to lease some space in the desert to keep all its unleased inventory . . .