by US correspondent Roger Renstrom

In a blockbuster deal for its telehandler business, JLG Industries Inc has signed wide-ranging definitive agreements with global giant Caterpillar Inc.

JLG chairman Bill Lasky said the arrangement was the first time Caterpillar had established that type of global strategic alliance with any company.

Under a 20-year pact, JLG will design and produce a full line-up of Caterpillar-branded telehandlers for distribution exclusively through Caterpillar dealers. JLG agreed to acquire certain equipment, tooling and intellectual property for USD51.4 million.

JLG plans to invest an additional USD30 million over a transition year to develop the North American Caterpillar line and adjust two facilities for additional production. McConnellsburg will supply markets in North America and Latin America. Maasmechelen, Belgium, will supply Europe and elsewhere.

Rusty Dunn, Caterpillar corporate spokesman, said the markets differed. "We tried to serve the world with one design when there are regional differences."

Unlike units in North American use, European telehandlers have outriggers that must be put down and European telehandlers are smaller, Lasky said.

JLG will move relevant equipment to Maasmechelen from Caterpillar's Leicester, England, plant. Dunn said Caterpillar began manufacturing telehandlers in Leicester in 1994, but telehandlers did not fit Caterpillar's application profile.

"We see this alliance as a success of taking a much more disciplined view of where Caterpillar has core competencies and where we don't," Dunn said. "We excel at products that run through aggressive application profiles in the earthmoving business. JLG excels at the precision placement of men and materials in the air."

Among its lines, JLG produces and markets telehandlers under the JLG, Gradall, Sky Trak and Lull trademarks. After the transition, JLG anticipates its Caterpillar-branded telehandler line should have first-year sales of at least USD325 million.

McConnellsburg-based JLG employs 3,927 people and had sales of USD1.74 billion for the fiscal year ended July 31. Caterpillar, based in Peoria, Illinois, USA, reported 2004 sales of USD30.25 billion and, as of December 31, 2004, employed 76,920 people.

The deal should close by year's end.