Milton CAT, Inc.

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Milton CAT, Inc.

100 Quarry Drive
Milford, Massachusetts 01757
U.S.A.
Telephone: (508) 634-3400
Fax: (508) 634-5575
Web site: http://www.miltoncat.com

Private Company
Founded: 1944
Employees: 1,100
Sales: $605 million (2005 est.)
NAIC: 423810 Construction and Mining (Except Petroleum) Machinery and Equipment Merchant Wholesalers

Milton CAT, Inc., is a Milford, Massachusetts-based company that built its business as an authorized Caterpillar Inc. dealer, selling new and used earthmoving equipment, such as trucks, tractors, graders, excavators, scrapers, and other heavy machinery. It served the construction, light construction, governmental, demolition, scrap, forestry, farming and dairy, waste, material processing, and quarry industries.

Milton has broadened its product offerings to include the Challenger line of tractors; Timberking forestry machinery; Erin mobile screeners for recycling, construction, and demolition uses; Powercrusher and Metso mobile crushers; Genie telescopic- and scissor-lifts, articulated booms, and portable aerial platforms, and Sullair air compressors.

In addition, Milton sells attachments and work tools, such as shears, landscape rakes and buckets, forks, hammers, and thumbs, to help customers take full advantage of their equipment, and it provides parts and services at 15 locations in Massachusetts, Rhode Island, Vermont, New Hampshire, Maine, and New York. The company also sells and rents generators, industrial engines, and marine power engines. Furthermore, Milton rents heavy equipment, both on a short- and long-term basis, through 130 independent dealers in the Milton CAT Rental Alliance. The company is privately owned by the Milton family and headed by chief executive Jack Milton.

CATERPILLAR’S 19TH-CENTURY ORIGINS

The fortunes of Milton CAT and its predecessors were tied to the success of Caterpillar Inc., the world’s largest manufacturer of earthmoving equipment. The roots of that company date to the late 1880s when Benjamin Holt and Daniel Best both developed steam tractors for farming. In 1904 Holt unveiled a tractor that relied on continuously looped tracks instead of wheels, developed to cope with boggy land conditions. During the test run of this “crawler,” an anonymous observer, at least the story goes, commented that it moved like a caterpillar. The name stuck and was applied to the steam-powered crawler when it reached the market in 1906, and the gas-powered Cats that were introduced two years later. In the meantime Daniel Best developed grain-cleaning harvesting equipment. He sold his business to Holt Manufacturing in 1908, and his son soon formed C.L. Best Gas Tractor Company, which became an industry innovator. In 1925, this company merged with Holt Manufacturing to form Caterpillar Tractor Company. In the 1940s the company applied its track-type system to earthmoving equipment: motor graders, blade graders, elevating graders, and terracers. It also added generating sets during this period.

The Milton family’s ties to Caterpillar are traced to Jack Milton’s father, Milt Milton, who was a Caterpillar employee. In 1944 he struck out on his own, becoming a partner with Henry Hale to form Milton-Hale in the Albany, New York, area to serve as an equipment dealer for International Harvester. The company served the construction industry, which in the post–World War II years thrived. Not only were returning servicemen buying homes at an incredible rate in the new suburbs, and dams were being constructed to generate the electricity to provide power to those developments and the industries that employed the veterans and their wives, the federal government was investing millions of dollars to build a major highway system. Because of the Cold War with the Soviet Union, highways were deemed a defense priority for the nation. Milton-Hale supported the construction of the New York Thruway, which ran from the northeastern corner of Pennsylvania connecting Buffalo, Albany, and all the other major Upstate New York cities before ending in the Bronx in New York City. Growing up in Albany, Jack Milton worked for his father during high school summers. As a college student at Syracuse University, he took summer employment at the company’s Syracuse outlet.

JORDAN-MILTON MACHINERY FORMED: 1960

In 1950 Milt Milton sold his International Harvester dealership in order to relocate to Boston to represent Caterpillar in Massachusetts. He took on another partner to form Perkins-Milton Machinery. After serving a stint in the military his son Jack joined the company, becoming a salesman. When his father died, he continued to work for what was then known as Perkins Machinery until 1960. He became partners with Bill Jordan to acquire the Caterpillar sales territory for Vermont and New Hampshire. Jordan-Milton Machinery operated out of a pair of modest facilities, one in Barrie, Vermont, and another in Concord, New Hampshire, that featured a dirt floor. The operation offered a meager supply of machinery, a single service truck, and no parts in stock.

In 1961 Jordan-Milton sold fewer than 20 pieces of equipment, but the partners persevered. By the start of the 1970s the company was selling more than 100 machines. Having outgrown its locations in Concord and Barrie, Jordan-Milton moved into larger facilities in Montpelier, Vermont, and Hopkinton, New Hampshire. Hopkinton would also serve as the company’s new headquarters. The dealership began to rent equipment to further expand the business and meet the needs of its customers.

Jordan-Milton moved into the state of Maine in 1982 through the acquisition of Arnold Machinery Company, which had Caterpillar dealerships in Portland and Bangor. These sites were then replaced by more modern facilities in Brewer, Maine, and Scarborough, Massachusetts, giving Jordan-Milton operations in four New England states. Also in the 1980s Jordan chose to retire and sold his interest in the company to Jack Milton.

Milton elected to keep the Jordan-Milton name, but that changed in late 1990 when Caterpillar agreed to a merger between Jordan-Milton and Milford, Massachusetts-based Southworth Machinery Inc., a well-established Caterpillar dealer with operations in Milford, Tewksbury, Springfield, and Wareham, Massachusetts; Menards, New Hampshire; Cranston, Rhode Island; and Albany, New York (for which the company served 13 eastern counties of New York). Southworth was founded in Menards in 1940 by Ted Southworth, Sr. He took a partner, Alan Foresman, in the 1940s, and the Foresman family eventually acquired control. Alan Foresman’s son, Charles, now owned the business and brokered the deal with Jack Milton. The combined company took the name Southworth-Milton, with Foresman taking over as president and Milton assuming the chairmanship.

COMPANY PERSPECTIVES

Across the board, the people at Milton CAT are dedicated to proactive sales, responsive product support, and focused customer service. We stand behind our customers by maintaining a solid understanding of your long-term goals and day-to-day needs and by offering more value than anyone else in the industry.

Southworth’s old headquarters at its Milford site became the home of Southworth-Milton, which operated 11 stores throughout the New England states, with the exception of Connecticut, employing some 600 people, and generating more than $200 million a year in revenues. The deal made sense for both companies because they operated in contiguous territories and sold virtually the same items—construction and logging equipment, as well as engines and generator sets—to the same kind of customers. The only exception was that Jordan-Milton’s Portland office sold Caterpillar lift trucks, a line that was sold in upstate New York by another dealer.

By joining forces, Jordan-Milton and Southworth were able to create a more efficient distribution network, which combined with the company’s economies of scale would hopefully lead to greater profitability than either party could achieve separately. The success of this plan was quickly borne out by the results of SouthworthMilton’s first year of operation in 1992, when it became the top-selling Caterpillar dealer in the United States. A year later the company sold more Caterpillar machines than any dealer in North America.

Caterpillar experienced a turbulent period in the 1990s, a situation that had an effect on Southworth-Milton. The company battled with the United Auto Workers for most of the decade, resulting in a pair of strikes and a lockout of employees. The 1994 strike lingered into 1995 and began to hurt inventories when the two sides agreed to federal mediation and the workers returned to the assembly lines. Earlier in the 1990s Caterpillar completed a plant modernization program and revamped its product development process. As a result, Southworth-Milton received an increasing number of new products to sell. As Caterpillar and its employees worked toward labor peace, Caterpillar completed a significant acquisition in 1998, picking up the Perkins Engines unit of LucasVarity plc to add a line of small diesel engines, which were being used in compact construction equipment and helped Caterpillar as it launched its own line of compact machines. Southworth-Milton was one of a handful of dealers to pilot the launch of this new line, allowing the company to separate itself from all other dealers in the sales it generated. Also in the late 1990s Southworth-Milton built up its rental business by establishing the Rental Alliance, supplying Caterpillar equipment to independent rental houses for daily and weekly use.

As the new century dawned, Jack Milton, now in his early 70s, was in semiretirement, and his son Chris served as president, in charge of day-to-day responsibilities. He had worked his way up through the ranks and learned all facets of the business. Starting out in the parts department, he became a salesman, then worked in product support and in the finance department before succeeding his father. Southworth-Milton now looked to expand beyond Caterpillar equipment to essentially become a one-stop resource for its customers. The company began adding complimentary lines of equipment, such as crushing and screening equipment, Genie Personnel Lifts, and Challenger utility and farming tractors. In 2002 the Precision Husky line of grinders was added to Southworth-Milton’s forestry products. In that same year, the company opened a new state-of-the-art facility in Clifton Park in Albany County, New York, to replace the old Albany location, providing more space to carry an increasing inventory of equipment and provide support to customers.

SYRACUSE SUPPLY ACQUIRED: 2004

The new facility would also find greater use in early 2004 when Southworth-Milton expanded into western New York by acquiring Syracuse Supply Company. Ironically, the Syracuse operation was located less than a half-mile from the International Harvester dealership where Jack Milton worked during his summer vacations a half-century earlier. In many respects the Syracuse Supply deal mirrored the Southworth merger. Again, the company moved into contiguous territories. Previously there was an undeclared border between the operations of the two companies, extending from Albany to the borders of New York’s Dutchess, Sullivan, and Ulster borders. Southworth-Milton served customers east of that line, and Syracuse Supply everyone to the west.

KEY DATES

1944:: Milt Milton and Henry Hale launch International Harvester dealership.
1950:: Milton forms Perkins-Milton Machinery to sell Caterpillar machinery in Boston.
1960:: Milton and Bill Jordan acquire Caterpillar territories in New Hampshire and Vermont.
1982:: Arnold Machinery Company acquisition adds Maine territory.
1990:: Merger with Southworth Machinery Inc. results in Southworth-Milton.
2004:: Syracuse Supply acquired; company renamed Milton CAT.

As a result of the acquisition, Southworth-Milton extended its reach across the length of New York’s southern border with Pennsylvania and as far west as the shores of the Great Lakes. In addition to a Syracuse store, Southworth-Milton received outlets in Binghamton, Rochester, and Buffalo, New York. The total number of outlets serving customers reached 14 in 6 states, and the company’s employment increased from 800 to 1,100 employees. Commenting on the deal, Chris Milton told New England Construction, “The strengths that the two companies bring to the table will allow us to improve business to all parties. This is a good match, and we look forward to a seamless transition. Southworth-Milton is experienced in the same weather, building seasons, industry needs, demands, and construction challenges that are dealt with everyday in upstate New York.” Moreover, Syracuse Supply customers would benefit from Southworth-Milton’s size, its ability to offer a broader, deeper inventory of machinery, both new and used, financing programs, a much larger rental fleet, and improved customer service.

Soon after the Syracuse supply acquisition, Southworth-Milton shortened its name to Milton Cat. Much of the company’s focus was to grow the business in its New York territories, which offered a great deal of potential for new sales. To support expansion, the company opened a new parts warehouse at its main Mil-ford site in 2005. It also made plans to consolidate the Buffalo and Rochester dealerships it inherited from Syracuse Supply. Both sites were less than four acres in size, making them much smaller than the other Milton Cat locations, which were at least ten acres in size. A 60-acre parcel of land was purchased in Batavia, New York, midway between Buffalo and Rochester, and conveniently located near the New York Thruway. In August 2006, the company broke ground on the new facility, which was scheduled to open in September 2007.

Ed Dinger