A Newport Communications
Service since 1970
|
| April 2001 A Newport Communications Service since 1970 |
1st quarter GDP growth will be only 0-1% but should be the bottom of the economic down cycle, says Newport Economist Jim Haughey. Growth should accelerate to 2-3% this spring & 3-4% later this year. Average growth will return after a year of sub-par, almost recession-level economic growth, he notes.
“Inventory is key to understanding timing of economic recovery,” Haughey says. At the end of January the whole economy had accumulated 2 days of extra, unwanted inventory & the pile may have grown since then. When production cuts reduce inventory to desired levels, production will correspond to consumption level – which translates to 2-3% economic growth as production increases.
Timing of a turning point for each industry depends on the size of excess inventory & extent of layoffs & production cutbacks, Haughey notes. Car & light truck manufacturers have already trimmed inventory to normal levels. Packaged goods manufacturers never had a big inventory problem so will likely be back at normal operating levels in April. Machinery & consumer durables have biggest inventory pile, especially electronic components & computers. Expect reduced shipment levels in those industries to continue for several months.
As always, manufacturing centers were hit hardest: Connecticut, upstate New York, outstate Pennsylvania, the Great Lakes, mid-South, Southern California & Washington. “Elsewhere, people are asking, "What slowdown?" Haughey says. Retailers in northern California & New England still have “help wanted” signs in windows, he notes. Technology manufacturers on both coasts are recruiting employees.
Lower expectations for U.S. spending coupled with winter production cutbacks slowed freight volume growth to estimated 1.6% annual rate this winter – still an improvement over last fall's 2.3% decline. Haughey expects annual growth for 2001 to be 2.5%, down significantly from 7% growth rates in 3 previous years. Volume should accelerate into 2002, briefly returning to 5-7% range late this year & early next year.
Biggest freight volume cuts: deliveries to regional warehouses that bear brunt of rebalancing inventory. Shipments to & from manufacturing plants in Mexico & Asia have also likely fallen below average, Haughey says.
February LTL freight rates were 1% below last November’s peak, their 3rd consecutive month, says Haughey, which coincides with 3 months of declining freight volume. He expects more small dips before rising freight volume starts pushing rates up later this year. Year-end LTL rates forecast: 1% above Dec. 2000.
Truckload freight rates were unchanged in Feb. after a 0.4% rise in Jan. Rates are up 3.3% in last 12 months, but expected to increase only 2.5-3% over next year due to weaker economy & steady to declining fuel prices.
February load postings started slow but finished strong, says DAT Services Market Research Analyst Michael Grant. Most of month continued the struggles seen in January, but end of month showed some strong increases in available loads leading into March. States with best combination of high volumes & outgoing/incoming ratios: Ohio, Illinois, Indiana, Missouri, Michigan, Arkansas.
Construction machinery shipments in 2000 were up 17.5% from ’99 but 3rd quarter to 4th quarter gain was only 0.2%, according to Construction Industry Manufacturers Assn. survey. “Our industry showed remarkable resiliency coming off several years of record growth,” says CIMA President Dennis Slater, “but we have definitely entered a slowdown phase in the past several months.” He says they expect business to head “in a better direction” by 4th quarter this year. Contact: CIMA, (414) 272-1170 or www.conamet.com.
Class 6-8 U.S. retail truck sales, with seasonal adjustments, 24,250 in Feb., down 1,600 from Jan. Decline in heavy truck sales was offset by similar increases in medium truck sales, says Haughey. Sales of 6-8, after seasonal adjustments, have been in 24,000-26,000 range since Sept. 2000. Modest recovery should start this spring with lower credit costs, resumed freight growth & decline in new truck inventories. Haughey forecasts 338,000 for 2001, down 13% from 2000 & about even with sales pace of summer ’98.
Cummins and Westport Innovations form 50/50 joint venture to develop natural gas engines. Venture will have design & marketing responsibility for all existing Cummins medium duty natural gas products & will offer ISX heavy duty engines using Westport’s high-pressure direct injection technology. Engines to be built by Cummins & serviced by the Cummins distribution system. New company to headquarter in Vancouver, B.C.
Oshkosh Truck buys assets of Trinity Equipment Mfg., maker of concrete mixers & parts. FedEx to provide 24/7 “vehicle down” emergency parts service for Ford truck customers. Delphi Automotive Systems buys Eaton Vehicle Switch/Electronics Div. Kemlite buys Lampro, UK-based maker of fiberglass reinforced panels.
Haldex long stroke brake products now standard on Freightliner & Sterling models. Freightliner LLC names Donaldson exclusive supplier of heavy truck replacement filtration products at TravelCenters of America service shops served by Freightliner ServicePoint parts program. International Truck & Engine selects Solid Edge & Unigraphics software for CAD systems.
Penske completes tender offer for Rollins stock, paying $13 each for 55 million shares or 94.8% of shares outstanding. Cummins West to distribute KleenAir Systems’ NOxMaster nitrous oxide reduction system. BorgWarner forms N. American Master Distributor network for Quik-Kool components. Cummins renews 5-year sales/marketing deal to endorse Valvoline’s Premium Blue engine oil for its heavy duty engines & sell it through Cummins channels. Cummins engine plants will use Valvoline products.
Marathon Ashland Petroleum & Pilot Corp. signs letter of intent to combine their travel center & truckstop operations. New joint venture, headquartered in Knoxville, TN, would have 250 travel centers nationwide. Pilot President James Haslam III would be president/CEO.
FINANCIALSMexico’s Consorcio G. Grupo Dina blames cancellation of Western Star contract for $101.3 million (980 million peso) loss last year. Company says ’99 deal to build medium trucks for U.S., Canada & Australia was important because an unreceptive Mexican financial system hampered its ability to provide financing, thus hurt domestic sales.
Dina says Mexican commercial vehicle market, including domestic & exports, fell 15% last year, to 49,747 units. Its own volume dropped 6.6%, to 2,135 units. Sales to domestic markets were down 17%, exports rose 34% to 602 units but were “substantially below” earlier projections. Dina has filed a breach of contract suit with the International Chamber of Commerce asking $110 million in damages.
Williams Controls board votes to sell company or its operating units, including Portland, OR-based Williams Controls Industries, which makes throttle controls for medium & heavy trucks. Company lost $16.7 million in its fiscal 2000, despite 10.3% increase in sales. Some of the decline in operating income is attributed to higher R&D expenses to develop automotive & truck electronic throttle control and adjustable foot pedal products.
NEW BUSINESSGE Capital I-Sim Driver Development Services opens new facility in Golden, CO. Rosedale Group to equip 400 trailers with Terion FleetView tracking/monitoring system. LiveListings.com Inc. launches online truck & automotive parts exchange. Lode Runner Transport to equip new trailers with Safe Transportation Systems’ Accident Control & Anti-jackknife Systems.
General Motors to debut new generation conventional series medium trucks in June. No details, but company says weight ratings range from 16,000-61,000 GVW with significant improvements in many areas. Freightliner to supply 1,900 Sprinter vans to FedEx.
TRANSITIONSHyundai Precision America changes name to Hyundai Translead. Purifiner changes name to Puradyn with introduction of new filter systems. BFGoodrich Co. changes name to Goodrich Corp.
Haldex Brake Systems reorganizes product centers: Braking Controls managed by Robert Else gets global responsibility for ABS/EBS product families, brake actuators, braking system valves. Air Supply & Suspension Controls headed by Gary Broda includes air compressors, air treatment, air management devices, suspension control valves. Foundation Brake Product Center under Magnus Bergstrom handles automatic & manual brake adjusters, air disc brakes. Friction Brake Center under Ron Rana has brake friction products.
TECHNOLOGYE-commerce could trim the cost of a new truck by 5.5% in 5 years, says Roland Berger Strategy Consultants. Study by the Munich, Germany-based firm says Tier One suppliers can expect to save up to $620/truck, OEMs $1,350/truck, entire industry $2,800/truck. Processes impacted: demand forecasting, sales & marketing, product development, purchasing & procurement, supply chain management, manufacturing & logistics. More info: www.rolandberger.com.
ENVIRONMENTCaterpillar negotiates 12-month extension of Oct. 2002 consent decree emissions deadline, says it won’t use cooled exhaust-gas recirculation to meet 2004/2007 standards. Company will instead focus on in-cylinder combustion developed with International & exhaust aftertreatment. Newport’s Steve Sturgess has details in April HDT.
Westport Innovation’s natural gas fuel system in Cummins ISX truck engine gets low-emissions certification from California Air Resources Board. Certification lets buyers apply for state incentive funding.
EPA Administrator Christie Whitman says the Bush administration won’t challenge 2007 emissions regs passed in last days of the Clinton administration. Announcement followed U.S. Supreme Court’s ruling that the EPA didn’t overstep its jurisdiction in setting new rules. Court also rejected trucking industry argument that EPA should have considered industry costs in emissions rulemakings.
U.S. EPA wants more tests before it will let Lubrizol sell its PuriNOx diesel fuel/water emulsion combo to the public. California Air Resources Board recently certified product as an alternative fuel, verifying a 14% NOx reduction & 63% reduction in particulate matter. Lubrizol has announced marketing plans & is putting together distribution organization. EPA tests will reportedly take another year & will cost $2.5 million.
Putting more freight on trains won’t reduce emissions, says N. American Commission for Environmental Cooperation. According to recent CEC study, rail & trucks now contribute equal amounts of dangerous emissions. Truck emissions will decrease significantly by 2020 due to strict government rules. Locomotive emissions will drop some, but at slower rate because govt. standards aren’t as strict & equipment turnover is slower. As rail trade grows, particularly in busy U.S./Canadian corridors, trains will contribute larger share of trade-related nitrous oxides (NOx) & particulate emissions.
Cummins offers electronic calibration to reduce NOx emissions from ’96-’98 M11 Plus & N14 Plus engines. San Antonio-based Southwest Research Institute forms consortium to examine how NOx reduction technologies affect particulate matter.
CORRECTIONMarch Hotline report on trucking consolidation (pg. 2, last paragraph) was in error. The information, from MacKay & Co. VP Bruce Plaxton should have read: In ’90 fleets of 500+ had 35% of Class 8 trucks & tractors, fleets of 10 or less had 42%. Today 43% are in fleets of 500+ and 32% are in fleets of 10 or less. Plaxton projects that by 2010, 45% will be in fleets of 500+, and 29% will be in fleets of 10 or under.
EVENTSAmerican Truck Dealers Convention & Expo, April 21-23, Orlando. Contact: (703) 821-7116 or www.nada.org. Automotive Parts Rebuilders Assn. Heavy Duty Brake Clinic, May 18-19, Philadelphia; Heavy Duty Transmission Clinic, June 2-4, Springfield, MO. Contact: (703) 968-2772 or www.apra.org. Automotive Aftermarket Industry Assn. eAftermarket Forum, July 31-Aug. 1, Chicago. Contact: (301) 654-6664 or www.aftermarket.org.
HONORSNewport takes top honors at annual Jesse H. Neal awards sponsored by the American Business Media. RoadStar coverage & analysis of hours-of-service issues won the Grand Neal as best entry among all 1,200 magazines. RoadStar also won Neals for Best Single Issue (June 2000) and Best Series (hours of service), and a finalist certificate for news coverage of fuel price increases.
Executive Editor Jim Winsor honored with ABM’s Crain Award for lifetime editorial excellence.
PEOPLECarsten Reinhardt to vp & operations gen. mgr., Western Star Trucks, from Freightliner corporate mfg. engineering director. He succeeds Roger Nielsen, recently promoted to president, Freightliner Specialized Vehicles Group.
Kevin Flaherty to senior VP-sales, Mack Trucks, from Vp-domestic sales. He succeeds Paul Vikner who left the company. Gus Gustafsson to Vp/customer adaptation engineer, Mack Trucks.
Sam Ferrise to president, Baldwin Filters, from president, Bandag Tire Distribution Systems. John Hardin to VP/gen. mgr., AMETEK Dixson Div., from business unit mgr. Todd Anderson to engineering Vp, Stemco, from engineering director.
Mike Tarasow to gen. sales mgr., Chelsea Products, Dana Drivetrain Service Div., from west coast regional sales mgr. Marian DeVoe to exec. Vp/COO Chardon Rubber Co.
Waltco Truck Equipment names David Heatherington field sales mgr., Bill Rector distributor & OEM development mgr., Craig Miller aftermarket parts coordinator, Joe Moran inside sales supervisor.
Ed Justis to president/CEO Arrow Truck Sales from COO. He succeeds Lewis Nerman who retired in Jan. Jim Stevenson to Vp-asset management, Arrow Truck Sales, from vp-field operations. Brian Buckham to marketing mgr., Hendrickson International Trailer Suspensions Systems, from N. American product development mgr., Kumho Tire. Jeff Lindgren to field sales dir., Horton Inc., from upper Midwest territory mgr.
Thomas Jendrowski to COO, NTE, from managing director, BAX Global. Atul Pasricha to exec. director, New Markets, Delphi Automotive Systems, from acting finance director, Electronics & Mobile Communications sector. Gary Keesling to N. American account mgr., BorgWarner Cooling Systems, from account mgr., Delco Remy.
Frank Armstrong to COO, Terion Inc., from CFO. Mike Harvey to sales & marketing vp, PuraDYN Filter Technologies, from vp-fleet services, TransMedia Group. Richard Cordivari to fleet sales VP., Fleet Master, from president, USProtect Inc. Mark Ramsaier to COO Mobile Wireless Technologies.
James Rulseh to Modine group VP from managing dir., European Automotive Div. He is succeeded by Charles Goodremote, formerly general mgr., Climate Systems Div. Rick Whitmore to chief sales officer, BestTransport.com from sales director, FreightWise. Dan Dutra to industry relations mgr., DuPont Performance Coatings, from e-business planning.
RoadStar Publisher Tom Stanford elected chairman, NATSO Foundation. Justine Ancheta to assist. editor, Newport Communications, from associate editor, Entrepreneur.com. Roxane Campbell to exec. director, National Assn. of Show Trucks. Retired: Bill Mack (Midnight Cowboy), longtime trucker radio personality on WBAP.
U.S. RETAIL TRUCK SALES REPORT
Source: Ward's Communications | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
