As an ex-Caterpillar employee I've long been aware that Cat dozers were the bulldozer of choice for the Israelis. You don't have to look for very long to find a photo of a Cat D9 bulldozer sitting next to a pile of rubble that was formally a residence in Gaza or Palestine. In 2003 a Caterpillar bulldozer crushed US activist Rachel Corrie in the southern Gaza Strip as she tried to prevent it toppling a home. Recent Cat annual meetings have debated the issue repeatedly and various Cat facilities have seen protests.
Caterpillar claims that it does not sell armored tractors directly to the Israeli military. The bulldozers are sold to the US government which then resells them to Israel for military use. Cat further claims that to focus solely on the destruction is disingenuous as Cat machines are also use extensively in building and infrastructure projects in the territories. Like it or not however the company has become a poster child for the occupation and requests to divorce politics from the issue have fallen on deaf ears.
The move will have minimal economic impact to Caterpillar but it has had a least one concrete effect - leading mutual fund TIAA-CREF has divested $72 million of Cat stock from its "Social Choice" fund. A TIAA-CREF official said its decision was not influenced by any outside pressure saying "Literally the only reason that (Caterpillar) car off our list was because it came off MSCI's index."