Caterpillar CEO Doug Oberhelman to Retire in March

Caterpillar Inc. said Chairman and Chief Executive Doug Oberhelman is slated to retire next year after leading the equipment maker to its highest annual sales ever before overseeing the longest sales decline in the company's history.

The board selected Caterpillar executive Jim Umpleby, a company veteran and current head of the company's energy and transportation business, to succeed Mr. Oberhelman in the CEO role, effective Jan. 1.

Mr. Oberhelman will remain as executive chairman of Caterpillar until March 31, when he will retire. After that, board member Dave Calhoun will assume the role of nonexecutive chairman. Mr. Calhoun is senior managing director and head of private equity portfolio operations of Blackstone Group L.P.

Mr. Oberhelman has led Caterpillar since 2010. He spent his first years as CEO putting billions of dollars into factories to build more of its familiar yellow machines and move the company deeper into mining equipment, which would prove to be a risky bet, The Wall Street Journal reported Sunday.

The year 2012 turned out to be a peak for Caterpillar, but soon after, miners began shelving equipment-buying plans as commodity prices fell, China's growth slowed and then oil prices fell, along with demand for related equipment. Caterpillar now faces its fourth straight year of falling sales, the longest decline in its history.

Shares slipped 0.6% to $87.12 in premarket trading. Its stock is up 29% this year-the best-performing in the Dow Jones Industrial Average-but trades 25% below its 2012 peak.

Write to Joshua Jamerson at joshua.jamerson@wsj.com