Do not know if anyone will read this as this is an old thread - but the ANSWER to CAT out of the on ROAD engine business is here =>
Strategic Positioning in the North American Truck Manufacturing Market
LONG story short - when Mercedes-Benz (Benz) (Diamler is Mercedes Benz) - bought Chrysler they gallivanted and bought Freightliner and CAT lost 40% of their engine business because the Germans - (Benz) declared an end to the contract engine purchasing and that all engines in future Freightliners - Western Stars - Thomas Built buses, and Sterlings - were soon to be Benz Diesels ONLY. They also declared death to Detroit Diesel to relegate it to parts company only - which they also owned in the Ioccoca build of Chyrsler to fatten it to sell to them
For Caterpillar - basically a heavy industrial diesel engine manufacturer rooted in end to end Bulldozers and heavy equipment manufacturing who never really had to deal with emissions issues in their engines - after loosing 40 percent of your business - it was a no-brainer it was never going to be profitable anymore as Benz is a 800 pound gorilla who had just bought effectively 80 percent of the non-consumer transportation sector. The Germans - Benz - know Diesels and let us not forget who and where Robert Bosch and Rudolph Diesel were and where they ended up "working"
So to salvage their "brand name" they were really out in the "cold" as an on road engine manufacturer - because Navistar is much bigger - HUGE - in fact and if you read the article also partially in bed with the Germans in its ownership too - you know they make the Power Stroke for FORD (DT 466's are everywhere else too) The truth is CAT just did not have the right diesel engine design and fueling engineers - as a few of the guys have said here with how they thought they could make an ON Road engine emission compliant. their simple mistake with ECM's trying to do direct injection HEUI and the like that had dependability problems made bad mistakes in the market place and pissed off consumers (truckers)
Post number 67 of this thread had most of it right.
CAT cut a page from the Ioccoca book - make the whole product - as a specialty product - and farm implement equipment and other places International harvester is - is nowhere CAT has ever been. It made since to jump into the agricultural engine business with them.
They still have brand name and it has value the name "CAT" just like heavy equipment by the name "CAT"
And that is why the CAT is not longer in the on the road engine business.
I am a fueling systems engineer.