I was right,
not out of the game at all;
Navistar International Corp. and Caterpillar Inc. said Thursday they will produce Cat-branded trucks for the construction industry beginning in 2010.
Cat also said it plans to end production of engines for the trucking industry by 2010.
The new truck will be targeted at road building and other uses in large infrastructure jobs where Cat’s bulldozers, excavators and other construction equipment are used. Navistar already builds trucks that are used as platforms for dump trucks and cement mixers. This part of the truck market, however, has long been dominated by Volvo’s Mack truck brand.
Peoria-based Caterpillar, the world’s largest maker of construction equipment also said it will spend $1 billion over the next two years to expand capacity in five of its Illinois factories. The company did not specify how many jobs, if any, would be affected by the changes.
The investment plan will include capacity increases in its East Peoria plant for bulldozers, pipelayers and for off-highway transmissions; large off-highway truck production expansion in Decatur; wheel loaders and excavators manufacturing increases in Aurora and components production increases in Joliet.
Warrenville-based Navistar and Cat also will work together on designing, manufacturing and distributing commercial trucks for overseas markets. The product offering would include a full line of medium and heavy duty trucks.
“The combination of Navistar’s truck design, development and manufacturing expertise and Caterpillar’s unparalleled worldwide distribution creates a significant advantage for global customers,” said Dee Kapur, president of Navistar’s truck group in a written statement.
Caterpillar, however, said it will no longer supply North American truck builders with engines after 2010 because the company’s engines will not be able to meet tighter federal emissions standards for commercial trucks beginning that take effect in 2010. The new Cat-branded trucks will be powered with a Navistar-built engine.
“With nearly 90 percent of our engine business being off-highway, we’ll continue to concentrate on our substantial and growing opportunities to supply engines in the petroleum, marine, electric power generation and industrial markets — as well as produce engines for our own construction and mining equipment,” said Douglas R. Oberhelman, Caterpillar group president, in a written statement.
North American truck builders, including Navistar, have increasingly opted to use their own engines in their heavy-duty and medium-duty trucks, reducing the demand for Cat-built engines. Cat's North American truck engine sales totaled about $1.30 billion in 2007, down 59% from 2006, when buyers loaded up in advance of higher prices and new emissions standards for 2007 models. Truck engine sales accounted for 3% of Cat's $45 billion in total revenue last year.
Truckmakers installed about 93,000 of the Cat engines last year, a 47% reduction from 2006 Executives from the two companies have been negotiating for months on a truck-making alliance. Financial terms were not disclosed. The companies also did not provide details on where the new trucks will be built. Industry observers has speculated the trucks could be assembled at a Navistar plant in Mexico where the company currently produces commercial trucks for Ford Motor Co. The Ford-Navistar joint venture is expected to dissolve after 2010.
http://www.chicagobusiness.com/cgi-bin/news.pl?id=29796&seenIt=1
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