No More CAT Truck Engines

[Keith Browning]

Quote:

CAT to exit US on-highway truck engine marketReuters, Thursday June 12 2008 (Recasts throughout.)
By James Kelleher
CHICAGO, June 12 (Reuters) - Caterpillar Inc said on Thursday that it would stop making diesel engines for the North American commercial vehicle market after 2009, ending a nearly 50-year-long chapter in its history that made the company a part of American trucker lore.
The announcement reflected both the growing vertical integration of the global truck-making business as well as Caterpillar's unique problems in keeping up with Cummins Inc , its rival in the on-highway diesel engine space.
News of Caterpillar's exit from a market it has served since 1960 came as the Peoria, Illinois-based company said it had signed an agreement with Navistar International Corp that could result in the two U.S. companies jointly building and selling a variety of trucks worldwide.
Caterpillar, the world's largest maker of mining and construction equipment, said one product of the Navistar alliance -- a heavy-duty, CAT-branded severe service dump truck for miners and builders -- could be on North American work sites by 2010.
But the engine powering those trucks will come from Navistar, not Caterpillar.
A full line of trucks for those markets would be on sale by 2012, Doug Oberhelman, the head of Caterpillar's engine unit, said.
"We're going after a customer base we know well," he said.
Outside North America, where emission rules are generally more lenient, Caterpillar and Navistar will introduce a full line of medium and heavy duty on-highway trucks, the companies said. Early focus would be on the fast-growing vehicle markets in China, Russia, Australia and Brazil. It wasn't clear which company would supply the engines for that overseas market.
The partnership will not target India, where Navistar has a joint venture with Mahindra and Mahindra .
But in North America, Caterpillar will no longer supply truckmakers like Paccar Inc , Daimler AG's Freightliner and others with engines. Its Mossville, Illinois truck engine plant will stop producing the power plants on December 31, 2009 -- just before even tougher clean-air rules take effect.
As a result, Caterpillar's archrival in the diesel engine space, Cummins Inc , now looks poised to capture more of the North American market in coming years, analysts said.
Cummins shares ended the day up $6.25, or 9.9 percent, at $69.38. Caterpillar closed up $1.57 at $80.50 and Navistar finished up $2.50 to $74.40.
The fate of Caterpillar's on-highway diesel engine business has been uncertain for more than a year, after problems associated with power plants designed to meet 2007 U.S. environmental rules allowed Cummins to gain a big share of the North American market.
That threw a big question mark over Caterpillar's engine business at a time when North American truckmakers like Paccar and Freightliner, which traditionally bought engines from independent suppliers like Caterpillar and Cummins, began making them in-house.
A linkup of some sort with Navistar was not entirely unexpected. At the Reuters Manufacturing Summit in February, Caterpillar Chief Executive Jim Owens said a partnership with Navistar was "a potentially nice fit."
The partnership also comes as the North American big-rig truck market is in a downturn, due in part soaring fuel prices that have prompted sporadic protests by independent truckers.
Adding pressure is the slowdown in the U.S. economy. A surge in truck purchases in 2006, as long-haulers rushed to buy ahead of the implementation of the 2007 clean-air rules, now means there are too many trucks chasing too little freight.
As a result, the rebound that truckmakers were counting on in 2008 has not materialized.
Industry tracker A.C.T. Research estimates manufacturers will receive orders this year for 234,000 Class 8 trucks -- the biggest rigs. That would be up just 10 percent from last year's trough of 212,000 and down significantly from the 378,000 produced in 2006.
"Given that the independent on-highway truck engine supply business is in secular decline anyway, this cooperation, in our view, is at least better than nothing," JPMorgan analyst Ann Duignan said in a note to investors.
Separately on Thursday, Caterpillar said it would invest $1 billion in five Illinois facilities over the next three years. They make, among other things, tractors, motor graders and other earth-moving equipment.

[DwayneGorniak]

Well, I would have to say CUMMINS all the way for the F-650/750. Too bad CAT is droppin out of the race though. That meens less competition.

[Bruce Amacker]

This is not much of a surprise to me and I won't miss them a bit. I've never liked Cat due to their constant need for specialized tools and procedures, their lack of support for the aftermarket, and their obvious intentions of eliminating the independent shop from servicing their engines. The EPA has been far too lax in instituting/enforcing regulations in the HD market like they have in the automotive market. Hooray! No love lost.

 

 

http://www.bloomberg.com/apps/news?pid=20601091&sid=a6_BXKNE.BJE&refer=india

 

Mahindra has released a press statement stating they are to build a LD diesel pickup with a German engine to be built at an unnamed Ohio plant. This has to be a a Navistar facility, I'm guessing, like the Springfield assembly plant. I welcome any more LD diesel "anythings" but am skeptical at whether Mahindra's $22K diesel pickup has a place in the US market. If it was $12-14K it would be hot, but the high vehicle price, high price of fuel and the unknown overseas name will combine to give it quite a hurdle to overcome. It will be interesting....

 

 

 

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[snw blue by you]

I gave my take here...

 

Cat and Navistar

 

Indian pickups, Indian tractors, etc, etc...

 

WTF! Buy American from American companies! Honda is american made goes the argument, however the money ends up in Japan you fucktard.

[Bruce Amacker]

WTF! Buy American from American companies! Honda is American made goes the argument, however the money ends up in Japan you fucktard.

1. All major Japanese companies have assembly plants in the US.

 

2. There are some Japanese cars that are 100% built in the US with NO imported parts at all. (Accord was one a few years ago, but I don't keep statistics current)

 

3.This is a global economy and you are sadly mistaken if you don't think so. If you think buying a Ford or Harley is buying a 100% American vehicle, you are incorrect.

 

So what do you think is supporting the US economy more?

 

A. Buying a Big Three vehicle built in Mexico or Canada.

B. Buying a Toyota, Honda, or Nissan built in the US.

 

 

Keep in mind that labor accounts for approximately 60% of a vehicle's production cost. If a Jap car is built in the US of US components, only the net profit goes to Japan- probably about 2-3%. What percentage of a Big Three vehicle (built in US) is imported? Certainly more than 2-3%. Have you walked the showroom recently and read the window sticker stating the orgins of Ford engines and transmissions?

 

Your answer is?

 

 

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[LARRY BRUDZYNSKI]

Quote:

Well, I would have to say CUMMINS all the way for the F-650/750. Too bad CAT is droppin out of the race though. That meens less competition.

Here's the scary thought...Less Cats but more 6.4's /forums/images/%%GRAEMLIN_URL%%/banghead.gif

[snw blue by you]

BTW Bruce, I was not calling you a fucktard.

 

I understand the global economy. That being said, Honda, Toyota, and Nissan are not american companies, neither is VW, KIA, Hyundai, and so on.

 

Net profits or not, the money to keep these companies thriving has been supplied by americans who choose to buy foriegn, and for decades I have said, shame on them, that included my father when he purchased a new Peugeot 505 turbodiesel in the '80s.

His following purchases have all been Fords, and all have been virtually problem free.

 

Many people have used the quality argument but outside of our beloved 6 Liter, that has never flown with me, of the 10 Fords I've owned there has been but 2 warranty claims and they have been minor.

 

My moto has been, keep the money home, the best you can, if you can.

It really seems to be an academic argument in these times, however I have not, nor will I purchase any new vehicle from a foriegn manufacturer, and over the years the only non american vehicle I've ever owned was a '73 Bettle BAJA Bug.

 

BTW, I ride Indian not Harley-Davidson.

 

 

 

[LARRY BRUDZYNSKI]

SWEET RIDE /forums/images/%%GRAEMLIN_URL%%/rockon.gif

[dieseldoc]

Well it is definitely an interesting turn of events. I have to be honset though I am a little sad my blood runs yellow with little blue ovals. It will be the end of an era. There is definitely a learning curve with the new engines this time around, but they arent to bad. The bad part about this whole deal is the chassis I absolutely hate working on the most is an Intersmashemall. However I am curious as to what will happen to my job???? Obviously we will have to support the product we currently have out there. The question is will my shirt say cat or international in a couple years? Will cat dealers begin to buy truck dealerships? Questions that we will have to wait for answers too.