When a company has to write off $580 million in goodwill from a deal that cost $650 million, the CEO is going to have some explaining to do. That was the position in which Caterpillar Inc. chairman and CEO Doug Oberhelman found himself Monday.
Caterpillar in June paid that much to buy the parent company of Zhengzhou Siwei, which makes roof supports for coal mines in China. Caterpillar said that it found systematic accounting misconduct at the company and it announced a write-down on Jan. 18.
Oberhelman talked about it when Caterpillar reported fourth-quarter results on Monday.
"Our announcement of accounting misconduct and impairment is something that no CEO wants to make. It's disappointing, one we'd rather not have had to deal with. But, when faced with challenges like this, it's how we respond that defines us.
"We talk a lot about accountability at Caterpillar, and I sure have preached that in the last three years as CEO. I recognize the decision to acquire Siwei happened on my watch, and the buck stops at my desk. I am accountable for that acquisition.
"There's been a tremendous amount of time, energy and resources dedicated to this investigation up to this point, and we're not done. We're putting in more effort to finish our investigation. ... We will apply what we learn from this as we go forward."