Photo courtesy Caterpillar Inc.

Concluding that "the business no longer represents a strategic growth opportunity," Caterpillar Inc. says it will shut down its tunnel-boring-machine business by mid-2014.

Caterpillar first entered the TBM market in 2008 with its purchase of Toronto-based TBM manufacturer Lovat. The machines have been used in tunneling jobs around the globe, from the Brightwater tunnel in Washington state to extensions of the Shanghai subway system.

"We continuously evaluate our strategic portfolio to ensure alignment with our long-term strategy and have concluded the tunneling business no longer fits that strategy," said Stu Levenick, Caterpillar vice president for customer and dealer support, in a press release.

"Lovat was an excellence company, made great machines, and we had high hopes Cat would hold to that," says Gregory Hauser, a tunneling and TBM expert with Dragados SA. Hauser worked closely with Lovat and Caterpillar to resolve issues on the Brightwater tunnel. "Lovat filled that [TBM maker] niche in North America, and they will be hard to replace," he says. "There was a lot of experience and technical knowledge there that will just be dispersed."

Caterpillar says it will honor current contractual obligations and continue to provide parts and service support through 2016. "When we get toward the end of 2016, we will evaluate what our existing customers need [and] decide if we need to go further with support," says Rachel Potts, Caterpillar spokeswoman.

Caterpillar still has orders to fill, including multiple TBMs for the Eglinton Crosstown LRT Project, a light-rail line in Toronto. The first machine was delivered in March. The four TBMs, named Yorkie, Torkie, Holey and Moley, were purchased in 2010 for $54 million.