September 1996 A Newport Communications Service since 1970

Rockwell's sale of its aerospace & defense businesses won't directly affect its trucking related operations, but will mean more money for expansion & investment. Deal leaves the company debt-free with $4 billion in borrowing power. Official word: It will be looking at acquisitions, market development investments & global growth.

Automotive components account for $3 billion of Rockwell's $10 billion annual sales. Group includes Heavy Vehicle Systems. Avionics & communications has $1.4 billion in sales, includes Collins Commercial Avionics' Land Transportation Electronics. Unit designs & builds communications systems, on-board computing and monitoring systems for trucks & trains. Other Rockwell businesses: industrial automation products, semiconductors for personal communications equipment.

In the year 2004 trucking will haul 19% more freight, travel 29% more miles & earn 21% more revenue than in '94, according to new DRI/McGraw-Hill study marketed by the ATA Foundation. "21st Century Trucking, Volume II" looks at the domestic freight market, demand for new vehicles, growth of other modes, financial performance, trends ahead. Price: $195/copy. Call (800) ATA-LINE.

Nissan Diesel America takes aim at the #2 Japanese import slot. NDA sold 3,038 Class 3-8 trucks in the U.S. in '94 and 1,989 in '95 -- putting it #3 behind American Isuzu & Mitsubishi Fuso. Weaker performance was due to "dramatic change in Yen exchange, high cost of '94 emissions compliance & introduction of totally new products for '95 model year -- one year ahead of its Japanese competitors, says Tetsuma Nieda. But, despite rumors to the contrary, parent Nissan Diesel is committed to enlarging the U.S. presence of UD trucks, he says.

NDA is targeting sales of 2,400 trucks in '96 -- despite a slow first half & its own prediction of a 5% industry-wide slump. Goal for '97 is 3,000 units; 3,600 in '98. It cut dealer net prices of its UD trucks on '96 & '97 model years which, says Nieda, comes from cost reduction programs and weaker Yen. NDA plans to increase its dealer count from 90 to 130 by the end of '97 and 150 by '98.

New east coast parts center planned for '97. NDA has tripled capacity at its Dallas center & moved its Ontario, CA, center to a new facility with double the space. Nieda says they're "aggressively studying" integration of U.S.-made components -- as aftermarket parts for now, possibly as production parts later. NDA is "negotiating" with Nissan Diesel to expand U.S. product offerings but Nieda admits that isn't likely until '98. Meantime, they've added new rear axle ratios, straight frame rails & ceramic clutches to current lineup.

Cummins posts 2nd quarter '96 net earnings of $44 million on sales of $1.3 billion vs. net earnings of $69 million on sales of $1.4 billion 2nd quarter '95. First half sales were $2.6 billion vs. $2.7 billion in '95, earnings were $93 million vs. $136 million. Heavy truck engine sales were down 22% for the quarter, midrange engine sales were down 5%. Cummins expects further declines in the 2nd half as truck manufacturers' backlogs diminish.

Detroit Diesel's $23.6 million costs for "product coverage" is more an accounting issue than anything else, says Treasurer Dan McEnroe. The company included the charge in its 2nd quarter '96 financial results along with a $1.3 million write-down of its Mexican investments. Result: a $16.2 million loss for the quarter -- and plenty of speculation regarding the product problem. McEnroe says it involved "variability in component machining" on its Series 60 engine. But only about 5% of engines built between '93 & '95 were affected and then only under "very specific" circumstances involving extreme cold weather, heavy loads, high RPM and other conditions.

Through manufacturing records, Detroit Diesel was able to pinpoint specific engines likely to have problems and is working with customers who may be affected. McEnroe emphasizes that this was not a recall and could have been handled under normal warranty channels. "We decided to put the money aside so we could be proactive instead of reactive," he says. The company's 2nd quarter revenues were $491 million vs. $552 million last year. Revenues from on-highway truck engines were down 22%, due primarily to the decline in North American heavy truck sales.

Detroit Diesel buys 400,000-sq.-ft. remanufacturing facility at the U.S. Army Depot in Tooele City, UT. Company will move reman operations from Salt Lake City & Sugerland, TX, & will headquarter Detroit Diesel Remanufacturing at the new site. State will kick in $1 million to help with relocation and hiring.

Trailer shipments totaled 95,199 through May '96, down 22.7% from same period '95. By type: vans, 72,639, down 25.7%; tanks, 1,807, down 15.4%; bulk commodity, 270, up 29.2%; pole & logging, 513, down 9.4%; platform, 7,097, down 30.8%; low bed heavy haulers, 4,383, up 1.3%; dump trailers, 4,104, up 4%; auto transporters, 328, down 18.6%; containers & chassis, 11,570, down 39.5%. Source: U.S. Census Bureau/TTMA.

After 4 years of earnings growth, trucking's net income fell from 2.9% in '94 to 2.01% in '95, according to Transportation Technical Services. Problems: a sluggish economy in the latter part of the year plus rate discounting to hold market share, says Ron Roth, executive vp. Revenue per ton fell 1.5%, revenue per shipment was off 6.1%. Operating ratio rose from 94.58 to 96.37. Carrier assets increased 10% with new equipment purchases, but long-term debt rose 32%. Data comes from 1,541 for-hire carriers in the 1996/97 TTS Blue Book of Trucking Companies. For information: (800) 666-4TTS.

Fleet revenue miles in June were an average 5.2% higher than June '95 in MacKay & Co.'s monthly survey, but participating fleets say that's market share growth, not overall business gains. The parts market is in a "mild slump" says MacKay. Dealer sales were up an average 1.4% from a year ago. Dealer service business is "in a tailspin" -- down 3.4% from the previous June. Fleets are more interested in outsourcing if it will save money, and they're shopping more. It's "the aggressive companies with aggressive pricing that get the business," MacKay says.

The average dealership's sales in '95 hit $27.3 million, new truck sales averaged $14.5 million; used truck sales, $3.8 million; parts & service, $5.1 million, according to the American Truck Dealers & Automotive Executive magazine. The number of medium & heavy duty truck dealerships fell from 3,000 in 1985 to less than 2,600 in '96.

Echlin Heavy Duty Group buys Moto Mirror. UPS signs 3-year contract with Detroit Diesel for up to 10,500 Turbotronic 638 6-cylinder, 3.8-liter engines to retrofit UPS "package cars." UPS buys 3,000 Mack trucks. Company won't give details but deal is reportedly for CH models to be delivered over the next 3 years. Timpte makes Rockwell WABCO its standard antilock system. Federal Express expands tire supply agreement with Goodyear to include 100% of FedEx retreads. Safety-Kleen buys assets of United Drain Oil Co. Dana buys Australian filter manufacturing business of James N. Kirby Pty.

Oshkosh buys fire truck maker Pierce Mfg., adding pumpers, aerial units & rescue trucks to its line. Freightliner, which owns American LaFrance, says Pierce product is not included in its distribution deal with Oshkosh.

Cummins Engine & Chinese truck builder Dongfeng Motor form joint venture to build Cummins C Series engines in China. New company expects to produce 25,000 engines/year within 10 years. Cummins also has a joint venture with China National Heavy Duty Truck Corp. to build L10, NT, K19 & KV engines. Shanghai Fleetguard, another Cummins/Dongfeng venture, makes engine filters. Recently opened Cummins Engine (Beijing), a wholly owned subsidiary, assembles generator sets for Chinese market. Cummins subsidiaries also have joint ventures to make Holset turbochargers & Newage alternators.

Domestic intermodal fleet has 3.1% fewer vehicles than '95, mainly due to "housecleaning" of intermodal trailers, says Intermodal Association of North America. Its 1996 Intermodal Equipment Inventory shows 98,344 intermodal trailers in service vs. 109,789 in '95; 70,856 containers vs. 64,831. Big boxes are in: 95% of the fleet consists of 45' & 48' by 102" trailers & containers. Forty and 45' by 96' trailers have all but disappeared from the intermodal fleet," says Michael Arendes, director of research & policy. Contact: IANA (301) 982-3400.

Ryder System puts Consumer Truck Rental business on the block, will focus on businesses "in which we have long term contractual arrangements with our customers," says Tony Burns, chairman/president/CEO. That includes full-service leasing, public transportation services & integrated logistics.

Eaton Truck Component 2nd quarter sales were off 15% from '95 due to 22% decline in North American factory sales of Class 8 trucks, a 30% drop in the Latin American market, and a 4% decline in European production, the company says. It will spend $9 million to restructure the business in '96, looking for $15 million annual savings by '97.

Council of Fleet Specialists forms Industry Relations Study Group to "aggressively communicate" benefits of an independent heavy duty aftermarket. Group chairmen: Bill Diggory, Chicago Rawhide; Dale Dawson, TruckPro.

Per Lindquist steps down as Volvo GM president/CEO to take a senior management job at Volvo Truck Corp. in Sweden. Karl-Erling Trogen, Volvo Truck president & chairman, takes over until a new president is named.

Todd Bluedorn to vp-North America, Carrier Transicold Truck & Trailer North American Operations, from strategic planning director of Carrier Transicold parent, United Technologies. Ron Ranheim to treasurer, Paccar Inc., from treasurer, Paccar Financial Corp.

James Jenkins II to director-business planning, Rockwell Heavy Vehicle Systems, from manager-manufacturing & vehicle practices, Deloitte and Touche Consulting Group. Bob Melum to marketing director, Oliver Rubber Co. from general manager-marketing, Atlantic Steel Industries. Chuck Mulder to vp-national accounts, Index Industries.

Sen. Kay Bailey Hutchison (R-TX) named chairman of Commerce Subcommittee on Surface Transportation & Merchant Marine. She succeeds Senate Majority Leader Trent Lott (R-MS) who remains on the subcommittee. Hutchison is a former vice chairman of the National Transportation Safety Board.

U.S. RETAIL TRUCK SALES REPORT

CLASS 8 - 33,000 LB & OVER GVW MANUFACTURER JUL SALES YTD SALES YTD SHARE Ford 1,555 9,373 9.13% Freightliner 4,519 30,322 29.53% Kenworth 1,550 10,945 10.66% Mack 1,278 11,968 11.66% Navistar 2,286 17,438 16.98% Peterbilt 1,743 11,503 11.20% Volvo GM Heavy Truck 875 9,272 9.03% Western Star 145 1,129 1.10% Other 90 726 0.71% Totals 14,041 102,676 100.00% CLASS 7 - 26,001-33,000 LB. GVW MANUFACTURER JUL SALES YTD SALES YTD SHARE Chevrolet 355 3,145 4.88% Ford 2,612 16,446 25.50% Freightliner 685 5,202 8.07% GMC 824 7,334 11.37% Hino 6 41 0.06% Isuzu 6 47 0.07% Kenworth 66 424 0.66% Mack (Renault) 71 427 0.66% Mitsubishi-Fuso 9 94 0.15% Navistar 4,581 30,609 47.46% Nissan Diesel (UD Trucks) 0 30 0.05% Peterbilt 43 317 0.49% Volvo GM Heavy Truck 70 376 0.58% Other 0 0 0.00% Totals 9,328 64,492 100.00% CLASS 6 - 19,501-26,000 LB. GVW MANUFACTURER JUL SALES YTD SALES YTD SHARE Chevrolet 137 1,093 9.28% Ford 537 2,695 22.88% Freightliner 266 2,369 20.11% GMC 213 1,689 14.34% Hino 33 176 1.49% Isuzu 47 374 3.18% Mack (Renault) 86 501 4.25% Mitsubishi-Fuso 39 360 3.06% Navistar 178 2,306 19.58% Nissan Diesel (UD Trucks) 31 215 1.83% Other 0 0 0.00% Totals 1,567 11,778 100.00% 1996 RETAIL TRUCK SALES Class 6 Class 7 Class 8 TOTALS July 1,567 9,328 14,041 24,936 Year to Date 11,778 64,492 102,676 178,946 95 YTD 15,030 66,167 119,597 200,794 Change -3,252 -1,675 -16,921 -21,848 Percent -21.6% -2.5% -14.1% -10.9%

Compiled by Heavy Duty Trucking Magazine
Source: American Automobile Manufacturers Assn.