Money Talk

Episode 9

George A. Schaefer

Host Ed Sutkowski interviews the CEOs of Caterpillar Inc. who led the company out of its most difficult financial years to help it become one of the most successful companies in the world. In this episode, Ed talks with George Schaefer, Chairman and CEO from 1985-1990.

George served as Caterpillar Inc.’s Chairman and CEO from February 1985 to mid-1990. Born in Cincinnati, Ohio, he earned an accounting degree from Washington University and joined Caterpillar at age 27 in 1960. George rose from a Decatur, Illinois, plant manager to Chairman and CEO. He also served as a board member of Aon Corporation, Helmerich & Payne, Inc., McDonnell Douglas, and Morton International.

During George’s tenure, he orchestrated a de-centralized business structure, emphasized return on investments, closed Cat’s plant in Glasgow, England, faced a strike in global recession, higher production costs, outdated plants and equipment and low heavy equipment demand. In 1987, he oversaw $1.8 billion plant modernization program, the termination of 6,000 Cat employees in fewer than 30 days (total company-wide reduction of 32,000 employees), reduced manufacturing space by 6.7 square feet, and implemented a new product design strategy which decreased design time from 10 years to as little as 27 months.

George characterizes himself as “not the most charismatic person” but prides himself on being a good listener and his philosophy that “a lot of people can do a lot of things better than I and so let them do it.” He oversaw Cat’s entry into the capital venture area and compared and contrasted the tragedy of General Motors and Ford. His most difficult decision related to the sea of change in Cat’s direction from a $600 million loss to a profitable organization. He views bad news as an opportunity.

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