Marmon Highway Technologies (MHT) companies announced they will no longer sign multi-year supply agreements with OE customers that call for annual mandatory price reductions or "cost downs"
and prevent full recovery of unavoidable cost increases.

MHT companies must maintain reasonable margins in order to continue to develop innovative, high-quality products for the trucking industry, said MHT President Kelly Dier.

"Unfortunately, a number of the predictions that some of us made in early 2009 regarding political instability, global sourcing, logistics costs and diesel fuel prices have come to pass," Dier said. "In addition, currency valuations and domestic demand, particularly in China, exacerbate the problem. These significant shifts are fundamentally affecting the way we do business. The ability to continually curtail costs by chasing lower-cost labor around the globe is fading fast."

MHT companies, under brands such as Fontaine, Webb Wheel, TSE Brakes, Triangle, Fleetline and others, engineer, manufacture and supply a broad range of products to the highway transportation industry. Products include brake systems, platform trailers, fifth wheels, leaf springs, spray suppression equipment, specialty drive axles, truck modifications and more.

"Our businesses are not immune to the rapid escalation of energy costs and commodity prices," Dier said. "Inflation fears in operating costs are becoming an everyday reality, and we have to recover unavoidable cost increases. To do otherwise would not only weaken our businesses, but also would ultimately undermine the level of R&D, innovation, quality and reliability that our customers absolutely expect and depend on from MHT companies."

Dier said the companies have passed along a great deal of cost savings MHT has generated from actions such as new product designs that drive down material costs and require less labor to produce, and more efficient manufacturing processes that have reduced labor content by up to 50 percent.