Cat Sinks Its Claws Into Services

Jennifer South aims her needle gun at a busted-down engine and blasts away. The giant 12-cylinder motor had powered a mining truck until a few weeks earlier, when it was carted off to Caterpillar Inc.'s (CAT ) remanufacturing plant in Corinth, Miss., to be salvaged. Over its brutal life, the engine had become caked with dust that had hardened like concrete. Now, wearing safety glasses, earplugs, gloves, and a protective apron, South must chisel away the years of buildup to unearth a bolt so she can further dismantle the 17,800-pound carcass of iron and steel. The air-driven gun pecks, with rods that look like knitting needles, until the calcification is gone.

"It's oily, greasy, heavy work," says South, who joined the company nine years ago as a 19-year-old college student. And progress is slow. The plant's 600 employees disassemble and rebuild an average of just two diesel engines per eight-hour shift, cleaning, inspecting, and repairing 20,000 parts along the way. But multiply that output by Caterpillar's other remanufacturing plants -- the company will start up its 14th, in Shanghai, in early 2006 -- and then multiply that by the five-figure price of these reclaimed products, and it gets easier to see why the division has become Caterpillar's fastest-growing unit this decade. Annual revenue tops $1 billion and is estimated to grow 20% a year.