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March 2004 A Newport Communications Service since 1970 |
Sales Trends
Seasonally adjusted annual N. American Class 8 truck order rate topped 404,000, highest since Sept. '98, according to Merrill Lynch. Citing preliminary data from ACT Research, analysts note that the orders appeared to be well distributed across OEMs with some strength coming from dealers looking to replenish inventories. They continue to forecast '04 heavy truck production at 220,000 units, up 25% from '03 – but say that could prove conservative if recent order levels continue.
Medium truck order rate in Jan. was 179,500, lower than expected after gains in 2nd half of '03. Merrill Lynch forecast, medium truck N. American production: 215,000 units, up 10% from '03.
'04 is already shaping up to be a very good year in commercial vehicles," says Frank Sheehan, vp, sales, marketing & product planning, Dana Commercial Vehicle Systems. "Production will start to increase in Mar. as the customers start to replace aging fleets." Jan. NAFTA Class 8 net order intake totaled 31,400, topping December's strong 27,000 units. Sheehan sees backlogs rising as OEMs start ratcheting up production. Dana's '04 production forecast: 241,000 Class 8, up 36% from '03; 211,000 Class 6/7, up 9%.
68% of fleets responding to CK Marketing & Communications' 1st Fleet Sentiment questionnaire say they plan to purchase power units in next 6 months; 60% plan to buy trailer equipment. Study queries 25 fleets with average 380 power units in for-hire, private & utility operations. Contact: Chris Kemmer, (614) 261-6400 or chris@ckkemmercomm.com.
Freight Trends
American Trucking Assns.' seasonally adjusted Truck Tonnage Index reaches all-time high of 164.2 (1993=100) in Dec. Freight volume rose 14.6% from Nov. to Dec. after 6.5% dip in Nov. Unadjusted index was 7.2% above Dec. '02 – largest year/year growth since Dec. '02. From 2002 to 2003 truck tonnage grew 3%. ATA Chief Economist Bob Costello credits inventory rebuilding & improving economy.
Freight coming through TransCore's load posting & matching services in Jan. was up 116% from year earlier. Company says improving economy combined with tightening equipment capacity continues to boost availability of freight not booked directly between brokers or carriers & shippers. Jan. loads were down 7% from Dec. TransCore says the drop is typical for this time of year but is the smallest Jan. decline in 4 years. Looking to April, best combinations of high freight volumes & favorable inbound/outbound load ratios have traditionally come from Illinois, Ohio, Arkansas, Texas, Pennsylvania, Georgia, Tennessee, Indiana, Alabama, Michigan.
Resources
Business people now have a new number to watch: the Transportation Services Index. The new monthly indicator, comprised of reports on for-hire freight and passenger volumes, aims to help predict business activity and clarify relationship between transportation & other sectors of national economy. It joins other economic indicators, such as Gross National Product & Gross Domestic Product, as tool for economists, policymakers, business planners, investors.
TSI will debut in March. At a New York Stock Exchange briefing in late January, Transportation Secretary Norman Mineta said the for-hire transportation industry has not been well represented in economic indicators. "The TSI will fill that huge void and give us a solid reading where the economy is headed," he said.
The index, prepared by DOT's Bureau of Transportation Statistics, includes five freight indexes and three passenger indexes, says BTS Chief Economist Jack Wells. For-hire trucking is represented by the ATA's monthly truck tonnage report. Other freight indexes are rail & air freight ton-miles, pipeline volume & inland waterway tonnage. Passenger side is covered by airline revenue passenger miles, intercity rail passenger miles & transit ridership.
The bureau weights these indexes by economic value, then combines them. "The freight index is particularly useful in indicating future changes in overall economic activity," Wells said.
The index will quantify the increase or decrease of transportation services from one month to the next, according to BTS. Transportation represents about 11% of the gross domestic product, the total value of the nation's goods and services, and provides more than 11.6 million jobs.
Alliances & Acquisitions
FWD/Seagrave Holdings buys Schmidt Engineering & Equipment (SEE). Purchase of the Wis.-based maker of snow equipment "fits strategically into our plan to build a diversified vocational truck manufacturing company," says Seagrave President/CEO Jim Hebe. Company plans to reintroduce the Wis.-built FWD heavy duty chassis line which Hebe says is well known in heavy duty snow removal chassis market. SEE will be a sister company to Seagrave. Rod Winter will be president/COO. Hebe will be chairman & CEO.
ChevronTexaco Global Lubricants' Chevron brand selected as preferred coolant by TravelCenters of America. Quick Fuel Fleet Services buys Solar Fuels' mobile refueling business in Kansas City, Mo. & Des Moines, Iowa.
Cendant subsidiary PHH Arval buys First Fleet Corp. First Fleet will continue marketing asset management & financial services under its own brand. Two companies manage combined N. American fleet of 58,000 medium & heavy trucks & equipment.
AmeriQuest Transportation & Logistics Resources buys Complete Fleet Management Inc. Complete Fleet President Jim Guice joins AMeriQuest as vp-asset services.
New Business
U.S. Army's next generation 2.5 – and 5-ton Medium Tactical Vehicles to have new automated "kneeling feature" modification to Dana Spicer Central Tire Inflation Systems.Technology depressurizes tires to reduce vehicle 387, 378 & 357 models. Penske Truck Leasing to offer Sirius satellite radios in Class 5-8 lease & rental trucks.
Oshkosh Truck awarded $185.9 million order to build 700 trucks for U.S. Marine Corps. Contract includes 274 Medium Tactical Vehicle Replacement wreckers & 436 MTVR dump trucks.
Enova Systems gets contract from Mack Truck to develop advanced heavy duty hybrid drive system, funded by U.S. Air Force for its diesel electric hybrid R11 refueler vehicle. Program is led by Southwest Research Institute.
Financials
Paccar posts $159.1 million 4th quarter profit, up 30% from fourth quarter '02. Sales & financial services revenues were $2.2 billion vs. $1.9 billion. Full year revenues were $8.2 billion, up 14% from '02. Net income was $526.5 million, up 42% Chairman/CEO Mark Pigott says this was the 2nd best year in Paccar's 98-year history & the 65th consecutive profitable quarter.
Company says over half its revenues were generated outside the U.S. Kenworth is market share leader in Mexico & Australia. DAF's '03 share of the European 15-ton market is a record 12.8%, 6-15 ton share was 8.9%. Combined Kenworth/Peterbilt share of Class 8 U.S. & Canadian retail sales was 23.5% in '03. Paccar had 9.5% of U.S. & Canadian Class 6-7 registrations. Pigott expects N. American Class 8 market to improve 10-15% this year due to improving economy & replacement of aging trucks. European 15 ton-plus truck market expected to be slightly better than last year.
Oshkosh Truck net income was up 163% to $29.7 million for fiscal quarter ending Dec. 31. Sales were $493.2 million vs. $426.3 million a year earlier. Commercial sales were up 9.7%, to $183 million due to higher refuse product sales & higher mix of package chassis/body sales. Segment operating income was down 4.6%. Defense segment sales increased 28.1% to $190.4 million; operating income was up 287%, to $37.2 million. Fires & emergency segment sales rose 8.8%, to $122.9 million. Operating income was up 15.8%, to $11.6 million.
Wabash National records 4th quarter loss of $1.7 million on $219.8 million sales vs. $11.6 million loss on $205.9 million sales same period 2002. Full year loss was $57.2 million on $887.9 million sales vs. $56.2 million loss on $819.6 million for '02. President/CEO William Gruebel says company's financial crisis "has been fixed" and operations have been improved. Company received orders for over 8,000 trailers in Dec., or 26% of industry orders as reported by ACT. It recently announced plans to increase 1st quarter production.
Cummins posts $47 million 4th quarter profit before one-time charges on $1.74 billion sales vs. $46 million on $1.41 billion year earlier. Full year profit was $54 million on $6.3 billion sales vs. $79 million on $5.85 billion for 2002. Q4 engine sales were $984 million, up 27% from Q4 '02. Segment earnings before interest & taxes was $32 million vs. $1 million loss a year earlier. Sales of heavy truck engines were up 55%, medium truck engines up 39%. Automotive market sales were up 32%.
Caterpillar 4th quarter revenues were $6.47 billion, up 20% from year earlier. Profit was $349 million, up 14%. Full year revenues were $22.7 billion, up 13% from 2002. Profit was $1.1 billion, up 38%. 4th quarter engine sales totaled $2.18 billion, up 15%. Company says N. American truck engine sales were double 4th quarter '02, which was negatively impacted by Oct. '02 pre-buy. Operating profit from engine sales was $70 million, up 169%.
ArvinMeritor reports $19 million income on $2.2 billion sales for first fiscal quarter ended Dec. 31, compared to $32 million on $1.7 billion. Operating income was $49 million vs. $73 million. Commercial Vehicle Systems sales were $685 million, up 20% from year earlier. Operating income was $32 million, up 33%. Company forecasts N. American Class 8 truck production at 220,000.
Dana posts $56 million 4th quarter profit from continuing operations on sales of $2.05 billion vs. $1 million loss on $1.79 billion year earlier. Full year income from continuing operations was $175 million on $7.92 billion sales vs. $6 million on $7.5 billion for '02. Company expects to benefit from favorable market conditions this year, particularly in N. American heavy truck segment, and from its restructuring program.
Eaton posts $114 million 4th quarter income, up 70% from year earlier. Sales totaled $2.08 billion, up 17%. Full year sales were $8.06 billion, up 12% from '02. Income was $386 million, up 37%. Truck segment had 4th quarter sales of $345 million, up 26% from year earlier, & operating profits more than doubled, to $54 million. Company forecasts '04 NAFTA heavy duty production at 240,000 units.
Minorplanet Systems USA files for Chapter 11 reorganization. Former GTE exec. Dennis Casey named president/CEO.
Expansion
Clean Air Power forms Clean Air Power Ltd. in Leyland, UK, to produce & market its Dual-FuelT system to UK & Europe. System was designed for Foden's Alpha Range trucks & will be sold & serviced through Foden dealers. Link Manufacturing expands Sioux Center, Iowa, plant; adds new hi-tech equipment. Bell Equipment opens plant in Eisenach, Germany.
Environment
New family of Volvo engines built for N. America will use exhaust gas recirculation (EGR) & diesel particulate filters (DPF) to meet '07 emissions regs. Volvo now uses EGR to meet current standards. Another Volvo Group company, Mack Trucks, says its engines will use EGR technology & DPF systems. Mack says decision to concentrate on EGR reflects experience with similar technology in its current ASET engine lineup. Mack & Volvo Trucks N. America both expect to have '07 engines in field testing with selected customers in 2005.
Caterpillar joins U.S. Environmental Protection Agency's Climate Leaders. Companies participating in the program set corporate-wide goals to reduce greenhouse gas, then inventory & report emissions to EPA.
Freightliner, Webasto Products & Schneider National launch joint study to measure effects of cab heaters on idling & fuel consumption. U.S. Energy Dept. provided $105,000 for project. Companies will match DOE funds.
Associations
National Truck Equipment Assn. establishes Louis V. Kleinstiver Institute for Multi-State Vehicle Safety in honor of NTEA Technical Services Director Louis Kleinstiver. Institute will conduct cooperative testing, develop performance standards & advance safety of vehicles built in multiple stages. Contact: NTEA Executive Director Jim Carney, (800) 441-6832.
National Private Truck Council adds leadership strategies to learning tracks offered at Annual Education Management Conference & Exhibition, May 2-4, Omni Hotel, Atlanta. Other tracks: safety & compliance, equipment & maintenance, finance, human resources, professional development, & third-party logistics. Keynote speaker is Sgt. Matt Eversman, featured in the book and movie Black Hawk Down. Contact: NPTC, (703) 683-1300 or www.nptc.org.
Society of Automotive Engineers & Delphi Corp. to expand Delphi Tsinghau Institute with full-time staff person, SAE books, technical papers & technical training programs. Institute, started in 1999 on campus of Tsinghau University, now called DTI-SAE Global Knowledge Center.
Marketing
ChevronTexaco Global Lubricants launches Caltex Delo Truck to promote Delo product line in Asia Pacific market. N. American Delo Truck to display Olympic rings tied to ChevronTexaco's sponsorship of 2004 U.S. Summer Olympic Team.
Great Dane customer newsletter, Evolving Trailer Technology, now available electronically. JDM & Assoc. celebrates 20 years as logistics/transportation PR, advertising & web development firm. Pana-Pacific hires pr firm LaunchIt, owned by Susan Fall, formerly of Qualcomm.
Unimog N. America to demonstrate on/off highway capabilities of its U500 vocational vehicle with promotional tour across U.S. & Canada. Three vehicles, each pulling a trailer full of implements, will visit participating dealers. Unimog is sold through selected Freightliner Trucks, Sterling, Western Star & American LaFrance dealerships.
People
Michael Burns to president/CEO Dana Corp., from president, General Motors Europe. Glen Hiner, who has been acting chairman since death of Chairman/President/COO Joe Magliochetti last Sept., continues in that role. Bill Carroll, who has been acting president/COO, to retire Mar. 1.
Kishor Pendse to vp/general mgr., Bendix Commercial Vehicle Systems wheel end & business process groups, from vp/general mgr., charging business team. Terry Mennen to sales director, vocational accounts, Hendrickson Intn'l; Sean Coleman to sales director, OEM truck products. David Mihalick to product planning director, Workhorse Custom Chassis, from mgr., RV product planning.
Pamela Turbeville to senior vp/CEO Navistar Financial from senior vp, human resources & administration, International Truck & Engine. She succeeds Phyllis Cochran who was recently named head of International's parts operation. J.R. Dabasinkas to Autocar product distribution director. Phil Oliver to northeast regional mgr.
John Camp to senior adviser, Denso International America, from sr. vp, marketing. He is succeeded by Terry Helgesen, formerly assistant general mgr, international sales. Rob Lindenfelser to heavy duty products mgr., Amalie Oil Co., from Mid-Atlantic district mgr.
Vipar Heavy Duty President Stephen Crowley gets added responsibilities as CEO. Reflexite Americas names Ken Delegan sales mgr.; John Harvey, industry mgr.; Lauren Maston, marketing associate.
Steve Zaborowski to sr. vp, XTRALease, from operations vp. Stacey Bright to marketing vp, Fleet One, from marketing director. Melissa Kornova-Feeck to Fleet One merchant marketing mgr., from sales & marketing coordinator.
Retiring: Great Dane President Kit Hammond steps down from current position & day-to-day responsibilities but remains on Board of Directors & will be active in customer relations. ArvinMeritor launches search for successor to Chairman/CEO Larry Yost. Yost, 66, announced plans to retire last year.
Died: Gary Sherrard, 65, head of management firm that produced International Trucking Show for over 3 decades. Sherrard had retired from full-time service at Independent Trade Show Management. Son Roger is now company president & will produce a new show, The Truck Show, next June in Las Vegas.
U.S. RETAIL TRUCK SALES REPORT
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