Caterpillar Inc. Chairman and Chief Executive Doug Oberhelman will retire earlier than expected, after ill-timed bets on China and mining tipped the equipment maker into its longest-ever sales decline.
The Peoria, Ill.-based maker of hulking yellow excavators and bulldozers said Monday that Mr. Oberhelman would step down as chief executive on Dec. 31 and as executive chairman at the end of March.
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Caterpillar's next chief executive will be Jim Umpleby, a 35-year company veteran who runs the engine business. Dave Calhoun, a former General Electric Co. executive and head of private-equity portfolio operations at Blackstone Group LP, will become nonexecutive chairman, the first time Caterpillar has split the CEO and board leadership roles.
Caterpillar's board has rejected investor calls in the past to split the chairman and chief executive jobs, saying "unified leadership and direction" was critical to wrangling the company's sprawling business. All but one of Caterpillar's 12 directors -- the chief executive -- are independent.
A Caterpillar spokeswoman declined to make Messrs. Oberhelman, Umpleby and Calhoun available for comment. She wouldn't elaborate on why Caterpillar's board decided to split up the top jobs.
Mr. Oberhelman, 63 years old, will be stepping down ahead of Caterpillar's traditional CEO retirement target of 65. A regulatory filing showed that Caterpillar's board made the appointments on Thursday.
"The timing of the change in leadership suggests confirmation that the outlook for 2017 may be for a fifth consecutive year of revenue decline, " said J.P. Morgan analyst Ann Duignan in a client note.
After taking the top job in 2010, Mr. Oberhelman spent five years plowing billions of dollars into factories to build more machinery and move the company deeper into mining equipment. It proved a risky bet, as The Wall Street Journal reported Sunday.
In 2012, Caterpillar recorded its highest-ever annual sales. Soon after, China's economic growth began to ease and prices softened for the commodities that fueled its boom, such as copper and oil. Miners began to shelve projects and equipment orders. Caterpillar now faces its fourth straight year of falling sales, the longest decline in its history.
Mr. Umpleby, 58, faces a tall order in trying to reverse that slide while global trade remains weak and commodity prices languish. He joined Caterpillar's Solar Turbines subsidiary in 1980 and cycled through executive positions in engineering, sales, manufacturing and customer services before being named president of Solar in 2010 and group president for the company's engine business in 2013. Previous chief executives have also managed the highly profitable turbine engine unit on their way to Caterpillar's top job.
This year, Caterpillar's shares are up 28%, and other big-ticket equipment makers are also on a tear after cutting costs and production.
But Caterpillar's shares are still down 25% from their 2012 peak, and were 0.8% lower in midday trading Monday.
Write to Bob Tita at email@example.com and Andrew Tangel at Andrew.Tangel@wsj.com