February 1999 A Newport Communications Service since 1970

After weeks of rumor, Associate Administrator for Motor Carriers George Reagle accepts reassignment as senior adviser to Federal Highway Administrator Kenneth Wykle. Reagle to be succeeded by Julie Anna Cirillo, whose title will be program manager for motor carrier & highway safety — once FHWA’s Office of Motor Carriers is restructured. OMC, FHWA & Reagle have been under fire from consumer advocates claiming their truck safety efforts have been weak because they’ve been too close to the industry.

Volvo reaches decision with UAW on $148 million expansion at Dublin, VA, plant that will hike capacity to 50,000 units/year, making it largest Volvo truck plant in world. Expansion will create 1,277 jobs & reduce Pulaski County unemployment by 17%. Virginia Gov. Jim Gilmore wants state to provide $50 million in incentives. Plant will build entire Volvo line, & units for Mexico, S. America & Australia.

Volvo sales are up 80% in past two years; passed 30,000 units for first time in 1998. “We’ve accelerated our product plan,” says President Marc Gustafson. Launches planned for next 24 months include low-cab-forward to replace Xpeditor, conventional cab vocational model, & availability of Volvo Powertronic automatic transmission & hub-reduction axles in vocational models. Every Volvo selling by 2001 will be less than 5 years old.

Volvo is “absolutely committed” to N. American engine market, says Gustafson. “We’re very confident we can make the 2002 emissions.” Fuel penalty on ’99 engines will be 2% at worst compared to ’98 models, zero if fleet is trading older engines. Volvo won’t need to upgrade cooling capacity since VN models were designed with extra capacity. Company doesn’t expect to raise engine prices soon. “Customers don’t see development costs as value-added,” he says. “We have to find ways to self-fund those costs.”

’98 was record year for truck sales. Class 8 total of 209,483 was up 17.3% over ’97 & 4% better than previous all-time record set in 1995. December sales of 20,568 set single-month record, exceeding 20,000 for the first time. Class 7 continued strong, rising 1% over ’97 to 114,665 units, & Class 6 made huge recovery, jumping 74% over ’97 to 31,556 units.

Subject to member approval in May, National Private Truck Council will restructure into 6 divisions, 3 serving fleet interests & 3 for suppliers. Board to downsize to 20 from current 58. NPTC name will not change. Details in HDT February.

General Motors ups ownership in Isuzu Motors from 37.5% to 49%. GM says Isuzu “plays an important role” in its global commercial vehicle strategy. Relationship that started in 1971 has seen joint development of a low-cab-forward truck built at GM’s Janesville, WI, plant. In ’97 Isuzu was given lead development responsibility for GM diesels & in ’98 the companies formed joint venture to build diesels in Moraine, OH. GM says future efforts will include use of an Isuzu-based platform to commonize cab, chassis & vehicle design.

AB Volvo opts out of the car business with sale of Volvo Car unit to Ford Motor Co. The $6.5 billion deal, which must be okayed by shareholders, includes 3 assembly & 3 powertrain plants in Europe, a product development center in Goteborg, Sweden, and use of the Volvo name for cars, minivans, sport utility vehicles & light trucks. Ford says Volvo Car will continue to be managed from Sweden, but with access to Ford engineering, purchasing, distribution & marketing. Fiat reportedly made a bid for Volvo but wanted the entire company.

Volvo will now beef up its position as a global truck & commercial products company. It recently bought a 12.5% stake in Swedish truck maker Scania AB for $660 million & says it’s considering a merger or “other combinations” with its longtime rival. Scania’s owner isn’t interested now so Volvo likely won’t make a public offer yet. Joining the companies would create Europe’s largest truck maker and the world’s 2nd largest — behind DaimlerChrysler AG.

New Mack FCM series front-discharge concrete mixer will have Mack E-Tech engine on Oshkosh front-discharge carrier with McNeilus mixer drum. Vehicle will be built by Oshkosh, sold through Mack dealers & McNeilus sales/service. Mack will discontinue production of its FDM mixer, close the plant in Pleasant Grove, UT, and dissolve its subsidiary, Mack Trucks of Utah.

Cummins Engine & Sweden’s Scania form Cummins-Scania to assemble electronically controlled fuel system developed by the two companies. System already available on Cummins Signature 600 engines. Joint venture will be based in Columbus, IN; 70% owned by Cummins. Navistar International to consolidate suburban offices into one 260,000-sq.-ft. facility in Warrenville, IL. Construction starts March ’99, move-in for 850 employees expected late 2000.

British shareholders turn down LucasVarity’s plan to reincorporate as U.S. company. CEO Norman Rice, still eager to increase company’s U.S. presence, reportedly looking at merger partners here. Trico Products to provide wiper blade systems for Freightliner ’99 Argosy, Navistar International Next Generation Vehicle, Sterling A & L Series, all Dina models. Eaton Vorad & Hitachi to jointly develop microelectronics for next-generation cruise control system. Ohtsu Tire & Rubber Co. transfers sales of its Ohtsu tires from Chantani Enterprises to subsidiary Falken Tire Corp.

U.S. RETAIL TRUCK SALES REPORT
CLASS 8 - 33,000 LB. & OVER GVW   MANUFACTURER  DEC SALES  YTD SALES   YTD SHARE    Ford 28 3,263 1.56%   Freightliner 6,142 64,307 30.70%   Kenworth 2,546 22,347 10.67%   Mack 3,778 26,801 12.79%   Navistar 3,347 38,583 18.42%   Peterbilt 1,852 21,168 10.10%   Sterling 774 5,055 2.41%   Volvo 1,801 24,064 11.49%   Western Star 269 3,017 1.44%   Other 31 878 0.42%   Totals 20,568 209,483 100.00%    CLASS 7 - 26,001-33,000 LB. GVW   MANUFACTURER  DEC SALES  YTD SALES   YTD SHARE    Chevrolet 615 5,888 5.13%   Ford 627 10,858 9.47%   Freightliner 1,820 17,701 15.44%   GMC 1,155 13,930 12.15%   Hino 31 162 0.14%   Isuzu 147 587 0.51%   Kenworth 151 1,269 1.11%   Mack (Renault) 57 703 0.61%   Mitsubishi-Fuso 17 250 0.22%   Navistar 4,541 61,242 53.41%   Nissan Diesel (UD Trucks) 3 39 0.03%   Peterbilt 59 911 0.79%   Sterling 261 1,110 0.97%   Volvo 0 15 0.01%   Other 0 0 0.00%   Totals 9,484 114,665 100.00%    CLASS 6 - 19,501-26,000 LB. GVW   MANUFACTURER  DEC SALES  YTD SALES   YTD SHARE    Chevrolet 217 2,040 6.46%   Ford 1,259 10,686 33.83%   Freightliner 858 9,671 30.62%   GMC 269 3,001 9.50%   Hino 82 614 1.94%   Isuzu 31 635 2.01%   Mack (Renault) 70 842 2.67%   Mitsubishi-Fuso 73 819 2.59%   Navistar 159 2,384 7.55%   Nissan Diesel (UD Trucks) 59 894 2.83%   Other 0 0 0.00%   Totals 3,077 31,586 100.00%  1998 FINAL RETAIL TRUCK SALES   Class 6 Class 7 Class 8 TOTALS   December 3,077 9,484 20,568 33,129   Year to Date 31,586 114,665 209,483 355,734   97 YTD 18,111 113,689 178,551 310,351   Change 13,475 976 30,932 45,383   Percent 74.4% 0.9% 17.3% 14.6%  Compiled by Heavy Duty Trucking Magazine Source: Ward’s Communications