Bombardier Aerospace Outsources Logistics

Signs up Caterpillar Logistics Services for warehousing services, inventory management, restructuring of parts logistics

Morton, IL — January 20, 2004 — Bombardier Aerospace has signed a long-term logistics services agreement with Caterpillar Logistics Services to provide supply chain execution services and to help restructure the company's parts logistics network.

Headquartered in Canada, Bombardier is a $16.4 billion manufacturer of regional aircraft, business jets and rail transportation equipment.

Under the deal, Cat Logistics, a wholly owned subsidiary of Caterpillar Inc., will provide an array of warehousing services, information systems and inventory management services to Bombardier. Cat Logistics will manage the distribution of aerospace components at distribution centers in Chicago and in Frankfurt, Germany.

In addition, Cat Logistics will assist Bombardier in restructuring its parts logistics network with the goal of improving availability and service to its customers.

"We are relying on Cat Logistics bringing together its warehouse management and materials planning expertise and systems into a fully integrated systems environment, enabling us to deliver aircraft-on-the-ground orders faster and improve our off-the-shelf fill rates," said Pierre Beaudoin, president and chief operating officer of Bombardier.

Mary Bell, chairman and president of Caterpillar Logistics, predicted, "I am confident that Bombardier's customers will see a significant improvement for years to come as a result of this agreement between our two companies."

The logistics services agreement recently signed will be implemented during 2004 and 2005. It will include the potential implementation of the new service parts management system currently being developed by SAP in conjunction with Cat Logistics.