kscarbel2

Part number is correct. Did you call Chicago Mack? http://chicagomackinfo.tripod.com/emblems.htm

Q4 2018 Navistar International Corp Earnings Call WARRENVILLE Dec 19, 2018 (Thomson StreetEvents) -- Edited Transcript of Navistar International Corp earnings conference call or presentation Tuesday, December 18, 2018 at 2:00:00pm GMT ================================================================================ Corporate Participants ================================================================================ * Martin P. Ketelaar Navistar International Corporation - VP of IR * Michael Cancelliere Navistar International Corporation - President of Truck & Parts * Persio V. Lisboa Navistar International Corporation - Executive VP & COO * Philip J. Christman Navistar International Corporation - President of Operations * Troy A. Clarke Navistar International Corporation - Chairman, President & CEO * Walter G. Borst Navistar International Corporation - Executive VP & CFO ================================================================================ Conference Call Participants ================================================================================ * Abdulrahman S. Tambal JP Morgan Chase & Co, Research Division - Analyst * Brian C. Sponheimer G. Research, LLC - Research Analyst * Chirag M. Patel Jefferies LLC, Research Division - Equity Associate * Christopher G. Laserinko Wells Fargo Securities, LLC, Research Division - Associate Analyst * David Jon Leiker Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst * Emily Gretchen McLaughlin RBC Capital Markets, LLC, Research Division - Associate VP * Erika Mary Jackson UBS Investment Bank, Research Division - Equity Research Associate and Generalist * Jerry David Revich Goldman Sachs Group Inc., Research Division - VP * John Sykes Nomura Securities Co. Ltd., Research Division - Analyst * Michael James Baudendistel Stifel, Nicolaus & Company, Incorporated, Research Division - VP & Analyst * Robert Hudson Salmon Wolfe Research, LLC - Research Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good day, ladies and gentlemen, and welcome to the Navistar's Fourth Quarter 2018 Earnings Results Conference Call. (Operator Instructions) And as a reminder, today's conference call is being recorded. And now I'd turn the conference over to Marty Ketelaar, Vice President, Investor Relations. Please go ahead. -------------------------------------------------------------------------------- Martin P. Ketelaar, Navistar International Corporation - VP of IR [2] -------------------------------------------------------------------------------- Thanks, Candace. Good morning, everyone, and thank you for joining us for Navistar's Fourth Quarter and Year-End 2018 Conference Call. Today, we'll discuss the financial performance of Navistar International Corporation for the fiscal period ended October 31, 2018. With me today are Troy Clarke, our Chairman, President and Chief Executive Officer; and Walter Borst, our Executive Vice President and Chief Financial Officer. After concluding our prepared remarks, we'll take questions from participants. In addition to Troy and Walter, joining us today, for the Q&A session, are Persio Lisboa, Executive Vice President and Chief Operating Officer; Michael Cancelliere, President of Truck and Parts; and Phil Christman, President of Operations. Before we begin, I'd like to cover a few items. A copy of this morning's press release and the presentation slides has been posted to the Investor Relations page of our website for reference. The non-GAAP financial measures discussed in this call are reconciled to the U.S. GAAP equivalent and can be found in the press release that we issued this morning, as well as in the appendix of the presentation slide deck. Today's presentation includes some forward-looking statements about our expectations for future performance, and the company expressly disclaims any obligation to update these statements. Actual results could differ materially from those suggested by our comments made here. For additional information concerning factors that could cause actual results to differ materially from those included in today's presentation, please refer to our most recent SEC filings. We also refer you to the safe harbor statement and other cautionary notes disclaimer presented in today's material for more information on the subject. With that, I'll turn the call over to Troy Clarke for opening comments. Troy? -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [3] -------------------------------------------------------------------------------- Hey, thanks, Marty, and good morning, everyone. I'll provide a brief overview of the quarter and the full year. And then Walter will walk you through the financials and our 2019 guidance. And then we'll take your questions. Q4 was a great end to a very good year, thanks to the Navistar team and our dealer partners for their hard work and contributions. During the quarter, chargeouts increased by 45%. We also grew market share in every vehicle segment both sequentially and year-over-year. We paid off our October convertible notes with cash on hand, and we concluded 2018 with a strong cash balance, which will help us address the April 2019 convertible maturities as well. And thanks to steps taken earlier in the year, no other debt maturities are scheduled before 2025. For the full year, there was significant improvement on nearly every key metric. All 4 segments, Truck, Parts, Global and Financial, posted higher revenue for the year and also chargeouts, adjusted EBITDA and net income. Positive free cash flow was achieved on a full year basis for the first time since 2011. During the year, we also significantly reduced our pension and OPEB liabilities, warranty liability balance and gross used truck inventories. There is strong momentum on market share. Overall market share in core markets increased for this second consecutive year. Class 8 share, for the year, was 13.5% compared with 11.8% in 2017. And Navistar was the only truck OEM to grow Class 8 share during 2018. And with strong marketplace preference for the LT Series and the A26 engine, our Class 8 heavy market share increased by 2.5 percentage points. We also grew school bus share by 1.3 percentage points. The recently launched truck products, the vocational HV Series and medium MV Series helped grow backlogs in the medium-duty and vocational segments. Entering 2019, these backlogs are 3x as large as the year before. We are moving forward rapidly with our alliance with the TRATON Group, saving money through our procurement joint venture and pressing forward in a number of key areas of technology collaboration. These accomplishments position us well to enter 2019, and we anticipate this will be another year of significant progress. From an industry perspective, 2019 is shaping up as another very good year. Freight demand and carrier profit are both strong, and current forecasts indicate Class 8 sales will remain well above replacement demand through the year. Class 6 and 7 sales will also remain strong due to high replacement demand and growth in key economic sectors. Consumer confidence, a leading indicator of the consumer economy, has increased in each of the last few months. The ISM Manufacturing Index, a leading indicator for the trucking industry, still indicates expansion. Construction spending is forecast to grow by 4.5% next year. And small business optimism continues a 2-year string of record highs. We are calling the market at a range between 395,000 and 425,000 units Class 6 through 8 plus bus. Entering the year, our backlog is 3x higher than it was this time last year. In response to this demand, we have increased production, yet again, by adding a shift -- a second shift at the Escobedo plant. In addition to the strong market, we have taken a number of additional steps in building a new Navistar. In November, the new CV Series was launched, our reentry into the Class 4 and 5 market. In December, we entered into an arrangement to sell 70% of the defense business to Cerberus Capital Management. This transaction provides Navistar Defense with a well-established, long-term partner. Also this month, Navistar announced the creation of a new eMobility business unit led by Gary Horvat, formerly the Chief Technology Officer at Proterra, the industry's leading electric city bus supplier. The investment in this new business unit highlights the importance that Navistar places on emerging technologies and supports future, electric-powered product development. 2018 was special for another reason as well. It's the year when we no -- are no longer preoccupied with the past. We are facing forward, addressing the challenges and opportunities of 2019 and the years to come. And our improvements over the past 5 years have established a strong foundation, and we're in a position to generate superior shareholder value. Since shareholder value based on stock price appreciation is a function of future earnings and cash flow growth, no other truck OEM has a better opportunity to grow earnings and cash flow than Navistar. We have upside potential that's superior to that of the industry based on several factors. First, there's market share. We have only begun to regain the market share that we lost earlier in this decade, giving us greater upside opportunity. A large part of this opportunity comes from having the newest product lineup in the industry, which is part of an overall solution that emphasizes superior uptime and lower total cost of ownership for current and prospective customers. Navistar also has unique potential to benefit from Parts revenue growth. Our vehicle part will grow with market share gain. And its new proprietary powertrains developed with the TRATON Group provide improved parts opportunities in our trucks and buses. And our alliance with TRATON positions Navistar to make more progress in lowering material cost and growing margins. Leveraging the global scale of the procurement joint venture will allow Navistar to offset commodity and supplier cost increases. And there's also upside on pricing. With the legacy issues largely behind us, Navistar can increasingly take price to reflect improved quality in our products and services and higher value to our customers. And as free cash flow is available to pay down the company's debt load, interest expense will come down, and net income will improve substantially. Other OEMs do not have as significant an opportunity for relative improvement. So to recap, while we expect 2019 to be another strong year for Navistar and the industry, it's important to recognize that Navistar is an investment as much more than a cycle play. As our ongoing improvements indicate, the company also has strong opportunities to benefit by recapturing market share, growing Parts revenue, improving margins, generating free cash flow and further de-risking and delevering the balance sheet. We're very pleased with the gains that we made in 2018. 2019 is shaping up as another very strong year, and we have a clear road map to sustained future progress. And so with that, let me turn it over to Walter. -------------------------------------------------------------------------------- Walter G. Borst, Navistar International Corporation - Executive VP & CFO [4] -------------------------------------------------------------------------------- Thank you, Troy, good morning, everyone. In 2018, Navistar took another big step forward as it moved from turnaround to growth. During the year, the company grew annual revenue in all segments, increased Class 8 market share 1.7 points, generated significant free cash flow from manufacturing operations and strengthened the balance sheet. In 2019, Navistar looks to build on its successes with additional growth in revenues, market share and margins in its core Truck, bus and Parts businesses. This morning, I'll review the 2018 Q4 results and provide 2019 financial guidance. In the fourth quarter, revenue grew 28% year-over-year to $3.3 billion. The improvement was driven by a 45% increase in core truck and bus chargeouts. Moreover, Class 8 truck volumes grew 60%, greater than the industry growth rate of 36%. Gross margin for the quarter was 18.5%. During the quarter, the company continued to face higher freight costs and commodity prices, particularly for steel. The supplier constraints discussed on last quarter's call have eased, but due to the high order activity, stress in the supply chain remains. For the year, gross margin increased 100 basis points to 18.9%. Warranty expense, including preexisting, fell to 1.7% of revenue compared to 2.4% last Q4, as the strong quality and reliability of our new products continues to positively impact the financial results. Structural costs as a percentage of revenue declined to 9.4% this quarter versus 11% last year. Structural costs increased $25 million year-over-year, largely from higher investments in the development of next-generation powertrains and profit-sharing accruals. Net income for the quarter grew nearly 40% to $188 million or $1.89 versus $135 million or $1.36 per diluted share last year. Fourth quarter adjusted EBITDA increased 20% to $322 million versus $268 million in 2017. 2018 marks the sixth consecutive year of growth in adjusted EBITDA, on both a dollar and percentage basis. Full year adjusted EBITDA was up 42% year-over-year to $826 million or 8.1% of revenue. Turning to the segment results. In the Truck segment, chargeouts grew in all core product segments. Sales grew 41% in the quarter to $2.6 billion, reflecting higher volumes, particularly of Class 8 trucks. Truck segment profitability grew 76% to $197 million in the quarter from $112 million a year ago. The increase in profits resulted from growth in truck volumes and cost-savings initiatives, including those from the procurement JV with the TRATON Group. Navistar Defense profitability also grew substantially in the quarter. In addition to strong government sales, the defense business realized receipts of $26 million from 2 requests for equitable adjustment claims and prior government contracts. Headwinds in the quarter for the Truck segment included higher commodity and structural costs as well as the impact of supplier constraints. Parts segment quarterly revenues grew to $633 million as double-digit growth in Fleetrite branded components contributed to the continued shift in volumes to more private-label sales from proprietary and Blue Diamond Parts sales. Segment profits were flat year-over-year as the increase in revenues were offset by higher freight expenses and internal allocation of development, engineering and SG&A costs. In the Global Operations segment, revenue was $93 million, and this segment was profitable in the quarter. Brazilian operations benefited from prior restructuring actions and improved economic conditions. The Global Operations segment was profitable for the full year for the first time since 2011. The Financial Services segment grew average portfolio balances due to financing originations, with revenues increasing 11% to $70 million. Segment profit was $26 million this quarter comparable to last year as higher revenue was offset by higher borrowing costs driven by larger average loan originations and rising interest rates. Moving to the balance sheet. Navistar had another quarter with $1.36 billion in manufacturing cash. For the year, Navistar generated positive manufacturing free cash flow of $307 million and strong EBITDA results and net working capital performance from higher truck volumes that more than offset capital expenditures, interest payments, warranty payments and pension and OPEB funding. The company is in a strong cash position to weather its seasonal cash usage in fiscal Q1 and address the $411 million of convertible notes that mature in April 2019. In 2018, the company's balance sheet improved in several areas. In October, the company repaid its $200 million convertible notes issued in October 2013 with cash on hand. The underfunded status of the pension and OPEB liabilities declined by over $400 million to $2.1 billion due to cash contributions, an increase in the discount rate and favorable OPEB claim experience. This decline is on top of a $550 million reduction in 2017. The warranty liability balance fell to $529 million compared to $629 million at the end of 2017, well off its peak of $1.35 billion in 2013. And with inventory. Gross used-truck inventory fell to $154 million at fiscal year-end compared to $206 million in October 2017, representing 1/3 of its peak balance of nearly $450 million back in April of 2016. Earlier this month, the company entered into a definitive agreement with Cerberus Capital Management, under which they will acquire a 70% interest in Navistar Defense. Navistar expects to realize approximately $140 million of total value for the defense business including a 30% equity stake, cash and earnout proceeds and the transfer of certain liabilities. The deal is expected to close this month, subject to regulatory approval. Additionally, the company will benefit from a long-term exclusive supply agreement to build and supply chassis and parts to Navistar Defense. The proceeds from the transaction will further bolster Navistar's balance sheet, while better positioning the defense business for future growth opportunities. Now let's turn to 2019. The following guidance includes the fully consolidated financial impact of the Navistar Defense business. Once the transaction with Cerberus closes, the company will provide an update to its 2019 expectations to reflect its minority ownership in the defense business going forward. 2019 industry volumes are expected to, again, be strong, largely driven by Class 8 volumes. The company is increasing its expectations of Class 6 through 8 plus bus industry volumes by 10,000 units to 395,000 to 425,000 units. Navistar volumes in 2019 are expected to increase due to share growth and the ramp-up of Class 4/5 volumes. This should enable the company to grow 2019 revenues to $10.75 billion to $11.25 billion. Gross margins are expected to grow next year despite unfavorable profit mix from higher expected truck sales growth relative to parts sales growth. Pricing and material cost savings from the procurement joint venture are expected to more than offset the impact of tariffs and higher commodity prices. All in, gross margins are expected to increase to between 19% and 19.5% of revenue. In 2019, structural costs, defined as engineering and SG&A expenses together with certain periodic post-retirement benefit costs that will be reported in other income and expense going forward, are expected to range between $1.25 billion and $1.3 billion. This is expected to be higher than in 2018 as the company increases funding of ongoing engineering projects as part of the TRATON alliance; makes investments to upgrade IT infrastructure and funds sales and service growth initiatives. In total, the company expects 2019 adjusted EBITDA to be $850 million to $900 million. In summary, 2018 was a breakout year for Navistar and marks the end of the company's turnaround and the beginning of a new phase of long-term growth. In 2019, the company will continue to grow revenue, market share and margins and strengthen its balance sheet. These are very exciting times for Navistar, and as Troy mentioned, the company is well positioned to be the best truck OEM investment opportunity in the sector. With that, I'll turn it back to the operator to begin the Q&A. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) And our first question comes from David Leiker of Baird. -------------------------------------------------------------------------------- David Jon Leiker, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [2] -------------------------------------------------------------------------------- So I wanted to talk about high-class problems, what your balance sheet is, where the cash flow is. You're in a position now to essentially have some excess cash. What are your thoughts on what you do with that and what the structure of the balance sheet looks like going forward? -------------------------------------------------------------------------------- Walter G. Borst, Navistar International Corporation - Executive VP & CFO [3] -------------------------------------------------------------------------------- Yes, David, it's Walter. The first thing that we plan to do is to pay off the convertible notes that come due in April of next year. So that's a little over $400 million, and we're extremely well positioned to take care of that with the year-end cash balances that we have. Beyond that, we'll continue to invest in the product. We've got a number of growth initiatives, including with the TRATON Group, as we've discussed before, and that puts us in a good position to continue to invest in the business as well. -------------------------------------------------------------------------------- David Jon Leiker, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [4] -------------------------------------------------------------------------------- Okay. And then I -- a question on the margins. The Truck margin -- I guess, how much headwinds are you seeing in there right now operationally? And where do you think the upside is of that, if you got to a point of just kind of a normal manufacturing environment? -------------------------------------------------------------------------------- Walter G. Borst, Navistar International Corporation - Executive VP & CFO [5] -------------------------------------------------------------------------------- Yes. Well, we have seen headwinds because the hedges that we had on had rolled off. More recently, we've seen some commodity prices moving in the right direction for us so that potentially that provides some upside opportunity for us into the future. -------------------------------------------------------------------------------- David Jon Leiker, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [6] -------------------------------------------------------------------------------- And then just one last item. On the Global Operations. What's the strategy for that? I mean, we've spent all the time talking about the truck side of the business and bus and revitalizing that portfolio. We haven't really spent much time on that part of the business. What are your thoughts there? -------------------------------------------------------------------------------- Walter G. Borst, Navistar International Corporation - Executive VP & CFO [7] -------------------------------------------------------------------------------- Yes, I'll start and maybe some of my other colleagues want to jump in. First of all, we're back to profitability, which -- and we expect to grow profitability further in 2019 in our Global Operations, which are principally our Brazilian operations. We do -- our biggest customer there is MAN, and it's part of the TRATON Group, so we do see additional opportunities there to work together with them going forward. -------------------------------------------------------------------------------- Persio V. Lisboa, Navistar International Corporation - Executive VP & COO [8] -------------------------------------------------------------------------------- This is Persio, David. I -- just complementing what Walter said. Also there we have some new products that we are launching in the market that we will hit probably 2019. So we are continuing to invest in the business in a moderate way and make sure that we take advantage of the recovery of the local market in South America. -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [9] -------------------------------------------------------------------------------- And I think what Persio is really referencing, this is Troy, is that we need to do a better job leveraging some of the technology that we have down there into other Latin American markets to include Mexico, where those products in those power ranges really give us an opportunity to gain some incremental market share and some additional margin there as well. -------------------------------------------------------------------------------- Operator [10] -------------------------------------------------------------------------------- And our next question comes from Chirag Patel of Jefferies. -------------------------------------------------------------------------------- Chirag M. Patel, Jefferies LLC, Research Division - Equity Associate [11] -------------------------------------------------------------------------------- Just wanted to kind of talk through a little bit about the defense side of the business. I saw in the K that there is about $534 million associated with defense sales for 2018. Just trying to get a sense for how much of the EBITDA contribution was from defense? -------------------------------------------------------------------------------- Walter G. Borst, Navistar International Corporation - Executive VP & CFO [12] -------------------------------------------------------------------------------- Yes. We haven't broken that out separately. But the margins for the defense business are slightly higher than the margins that we have in the Truck segment overall. So that can probably point you in the right direction. We will provide some additional information on the defense sale once it closes. So I think you'll get a better sense of what the revenues and profits for that sector looked like in '18 at that time. -------------------------------------------------------------------------------- Chirag M. Patel, Jefferies LLC, Research Division - Equity Associate [13] -------------------------------------------------------------------------------- Okay, that's fair... -------------------------------------------------------------------------------- Walter G. Borst, Navistar International Corporation - Executive VP & CFO [14] -------------------------------------------------------------------------------- As we look forward to '19, we do expect those revenues to decline probably a little less than half of the numbers that you mentioned. So less than half of that $534 million as we -- we had a couple of big contracts in 2018 that rolled through our results, in particular a contract for UAE and another one in Pakistan that we've talked about previously on these calls. -------------------------------------------------------------------------------- Chirag M. Patel, Jefferies LLC, Research Division - Equity Associate [15] -------------------------------------------------------------------------------- Okay. And then, I guess, what I'm trying to also understand a little bit is just the margin profile of the Truck business x defense as we move forward. If I strip out a few of the items that were onetime in nature, one being the $70 million in the third quarter that was associated with a benefit there. And then the $26 million you just kind of called out here on the defense side that you kind of got there. I get to a Truck margin for the full year of 2018 that's closer to about 4% or so. Just want to get a sense for, one, how you think that moves as we go forward. What kind of volume expectations you need in order to see that kind of ramp a little bit to a higher degree? And if there is some cost initiatives that can be further taken here to kind of reduce that? -------------------------------------------------------------------------------- Walter G. Borst, Navistar International Corporation - Executive VP & CFO [16] -------------------------------------------------------------------------------- Yes. Truck margins have been increasing here with the stronger volumes and the cost initiatives that we've taken, and we expect those to improve, again, in 2019. We're surely not done on the cost initiatives side. In particular, we continue to look at product costs as we look for additional efficiencies in our material costs by working with the procurement joint venture that we have with the TRATON Group. So we continue to believe that will provide us significant opportunities into the future that will help us grow our EBITDA margins overall over the next few years. -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [17] -------------------------------------------------------------------------------- This is Troy means, I mean, maybe taking a -- maybe how I look at it, building on Walter's comments, is the couple of pieces that impact, I think, Truck margins going forward, first off, is the increase in commodity costs. But if you think about increased commodity costs, what's remaining of that should be almost a onetime 2019 type of event. And then we'll continue to kind of -- we'll continue to improve material costs largely through the procurement joint venture than we have with TRATON Group and get into global -- and getting more global scale. And then the third piece of that is then, in a couple of years, the advent or the introduction of integrated powertrains, to a much higher level than this company has ever experienced before, really powering better than some of our competitors. And so you see this in a couple of steps, I think, as we walk out over the next couple of years, you'll see a steady margin build on trucks largely due to those 3 things. -------------------------------------------------------------------------------- Chirag M. Patel, Jefferies LLC, Research Division - Equity Associate [18] -------------------------------------------------------------------------------- And the TRATON piece was -- I think we had called it out in 2016, when you guys initially signed up -- combined. Was the idea that there'll be $500 million or so in potential savings with a $200 million run rate? Is there any sort of dollar amount that we can associate with the amount that you've already kind of achieved? And some sort of a level of cadence that we can imply? -------------------------------------------------------------------------------- Walter G. Borst, Navistar International Corporation - Executive VP & CFO [19] -------------------------------------------------------------------------------- Yes. So those estimates that we had provided back then are still relevant over time. We had indicated $500 million accumulative savings with a $200 million run rate in the fifth year. For the first couple of years, we're on track or slightly better than what we had anticipated going into the JV a couple of years ago. And that -- you see that reflected in our results. I also want to come back to a comment you made earlier about the $70 million adjustment that we had in -- back in Q3. That does run through the Truck segment, but it doesn't run through the gross margins, which you tend to see on the face of our presentation deck here. -------------------------------------------------------------------------------- Chirag M. Patel, Jefferies LLC, Research Division - Equity Associate [20] -------------------------------------------------------------------------------- Right. So that'll just be on the (inaudible). -------------------------------------------------------------------------------- Walter G. Borst, Navistar International Corporation - Executive VP & CFO [21] -------------------------------------------------------------------------------- (inaudible). Other income. -------------------------------------------------------------------------------- Operator [22] -------------------------------------------------------------------------------- And our next question comes from Ann Duignan of JP Morgan. -------------------------------------------------------------------------------- Abdulrahman S. Tambal, JP Morgan Chase & Co, Research Division - Analyst [23] -------------------------------------------------------------------------------- This is Abdul Tambal on behalf of Ann. Just a quick question regarding the Cummins engine representation from your engine shipment in Q4. I notice it's up around 580 bps year-over-year. I'm just wondering if you can kind of explain what drove this increase. -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [24] -------------------------------------------------------------------------------- Yes. Michael, do you want to go head and touch that real quick? -------------------------------------------------------------------------------- Michael Cancelliere, Navistar International Corporation - President of Truck & Parts [25] -------------------------------------------------------------------------------- Yes, thank you. So this is a production mix question. And, really, it's driven by 2 things. Primarily, we had Navistar offering our N9/N10, at the same period in our vocational products, last year, which we don't have this year. That was the primary driver. And then also it's a bit of a customer mix depending upon the customer fleet mix and their engine preference during that period of time. It could swing numbers one way or the other. I really wouldn't overreact to that theory, the 90-day period. -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [26] -------------------------------------------------------------------------------- Yes. And so just in summary, we had our own 9,10 engine. We've replaced that with the Cummins ISL. So it's 100% Cummins ISL in that particular segment right now. And then Michael's comment, a handful of these large fleets that we've conquested or re-conquested, one fleet takes X15s, really starts to skew the numbers just in terms of volume. I think kind of an under-told story here is the gains we continue to make with the A26. I think that the A26 is -- we've indicated in the past, every A26 we sell is incremental market share, and that's what we've seen. It really doesn't attract from selling X15s as much as it's back into a segment in its own right, that's in that 12- and 13-liter segment. And we continue to make significant gains in both the number of A26s we sell, but in addition to that, the satisfaction and the feedback we're getting from our customers on how much they like the product. So couldn't leave that particular question without also commenting what a great job the A26 is doing for us in the market. -------------------------------------------------------------------------------- Operator [27] -------------------------------------------------------------------------------- And our next question comes from Christopher Laserinko of Wells Fargo Securities. -------------------------------------------------------------------------------- Christopher G. Laserinko, Wells Fargo Securities, LLC, Research Division - Associate Analyst [28] -------------------------------------------------------------------------------- I'm on for Andy Casey this morning. Just to kind of continue in that vein. I knew that NAV is the only OEM to gain market share for the year. But any idea what that stickiness looks like going forward once supply chain constraints start to loosen up around the industry? -------------------------------------------------------------------------------- Michael Cancelliere, Navistar International Corporation - President of Truck & Parts [29] -------------------------------------------------------------------------------- Yes, this is Michael. So -- yes, we look at our order board and the share gains we've made in 2018 and the customer preference of our products. What's important to customers is fuel economy, weight, uptime, driver preference. And that really speaks well for our LT and A26. Our order board is up significantly, and we really moved into a phase where customers went, from about a year ago or so, to trying the product to experience it firsthand to now really enjoying the performance and benefits they get. Keep in mind one of the biggest challenges the industry has is drivers. So it's important for fleets to buy a product that their drivers like, as an attraction and a recruitment retaining tool. In fact, I just got a call yesterday from a fleet with over -- he's got over 1,000 trucks and recently purchased as many of our trucks and just to quote him -- he referenced that he had a couple of veteran drivers call him and said, "Boy, these trucks are phenomenal." The LT with the A26 are the quietest trucks they've ever driven. And that he felt very positive about the impact that would have on the business. So in summary, we're optimistic about continued share gains in that segment. -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [30] -------------------------------------------------------------------------------- Yes, let me -- it's Troy. Let me just put it another way. I had Michael go back and look at some numbers. This is really only the third time in the history of the company that we have gained 2 percentage points or more in the heavy segment. And I would tell you it's the first time the company has ever done it, and they did it profitably. The previous 2 times, the company did not do it profitably for a handful of reasons. And the irony of the whole situation -- and I think you were actually pushing on this, Christopher, is if it wasn't for the supplier constraints that we ran into in the Q3, it would have been higher than 2 points of -- 2.5 points of market share gain in the heavy segment. It would have been in addition to that. So it would have been the highest single-year gain that this company has ever had. We can only read -- and again, with this anecdotal information that Michael says, which is one of dozens of comments that we get, we can only read that we really have a product that has the ability to get real traction in the market. And we're very excited about what 2019 portends for us in that regard. -------------------------------------------------------------------------------- Christopher G. Laserinko, Wells Fargo Securities, LLC, Research Division - Associate Analyst [31] -------------------------------------------------------------------------------- Okay. I wonder if I could ask a couple kind of housekeeping questions and then get back to the market share. The housekeeping questions I have: Any guidance that you're willing to provide for 2019 manufacturing cash balance? And the second one is, you're exiting this year with 30% incrementals give or take. Is it reasonable to expect that level of incremental going forward? Also anything that you're willing to share in terms of decrementals if volumes start to decrease? And then on the market share side. If you do start to see those industry downturns, is there anything to prevent market share leakage, like you've had, in the past, downturns, and really kind of cement those gains, other than kind of the understanding of new product launches, the reception of the A26, et cetera? -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [32] -------------------------------------------------------------------------------- Yes, well, -- so let me hit the last one head on. I mean, there's kind of the -- there's the quantity of backlog, and there's the quality of the backlog. And certainly, in light of the fact that this is an important subject for all of you and, I think, an important subject for the industry, I would say over the last 6 to 8 weeks, we've spent a lot more time really understanding the nature of our backlog to ensure that, number one, it's not being overstated in any way; but number two, how can we reflect to you the confidence that we have. Our cancellation rates are relatively low compared to the industry. And the fact of the matter is we can tie a name to over 85% of our backlog. And this isn't just John Doe, these are names of the -- some of the largest and most important customers in the trucking industry that we've worked hard to create a different kind of relationship with. So we have 2 things. One, we have a lot of confidence in the backlog, and we don't believe that we face massive cancellations, which could be one cause for market share erosion as you've noted. And then I think the second thing is that given the fact that the majority of the market share came from large customers, it is not impossible, as a matter of fact it is highly probable, that in any market softening, our market share would nominally strengthen, given the larger customer profile that our backlog is constructed of at this particular point in time. So that's just a comment on that. I'm looking to Michael. He's nodding his head. So I think I'm portraying it accurately. Let me pass over the incrementals to Walter. -------------------------------------------------------------------------------- Walter G. Borst, Navistar International Corporation - Executive VP & CFO [33] -------------------------------------------------------------------------------- Yes, let me start with the cash first, which is, we provided manufacturing cash guidance during the turnaround. That was appropriate at that time. With $1.36 billion of cash at year-end, this is not, I think, the most relevant metric going forward. So we've provided a fair amount of additional guidance that you'll see in the presentation deck. But we're starting to pay down debt with our cash, and we'll continue to make sure that we retain enough cash to run the business and make the investments in the future. On incrementals, just kind of stick with the comments that we made earlier, which is that we do expect our truck margins to grow again in 2019. In my prepared remarks, I mentioned that we expect price increases plus additional cost savings we'll get out from the procurement JV to more than offset the commodity headwinds and some of the other cost that we're seeing in the market right now. So I'm not going to comment on specific incrementals other than to say that both in the Truck and in the Parts segments, we expect margins to continue to be higher in '19. -------------------------------------------------------------------------------- Operator [34] -------------------------------------------------------------------------------- And our next question comes from Brian Sponheimer of Gabelli. -------------------------------------------------------------------------------- Brian C. Sponheimer, G. Research, LLC - Research Analyst [35] -------------------------------------------------------------------------------- Just a question on the defense business. It's a nice little business for you and so clearly there are some trade-offs with you selling it. I'm just curious whether this business was a hurdle in any way to increase collaboration with TRATON, either through engineering, through tech development or even through increased ownership by them above the 20% hurdle. -------------------------------------------------------------------------------- Walter G. Borst, Navistar International Corporation - Executive VP & CFO [36] -------------------------------------------------------------------------------- Yes, Brian, I mean the reason we did the transaction is we've had a very good run in defense. You see that in our 2018 results. We're really kind of at a point now where incremental investments need to be made in the defense business, and we've chosen to work together with Cerberus in that regard. And we think that portends to a very good future for NAV defense over time. But we'll split those investments with them and have additional cash that we'll take out of the transaction to put towards our core operations going forward. So we'll continue to participate in the upside of defense with a 30% interest. We continue to have a exclusive supply arrangement to that entity, and we're partnered up with, we think an excellent partner going forward. -------------------------------------------------------------------------------- Operator [37] -------------------------------------------------------------------------------- (Operator Instructions) And our next question comes from Mike Baudendistel of Stifel. -------------------------------------------------------------------------------- Michael James Baudendistel, Stifel, Nicolaus & Company, Incorporated, Research Division - VP & Analyst [38] -------------------------------------------------------------------------------- Just wanted to ask you about this Slide 14, the U.S. and dealer stock inventory and that seems to be creeping up. And I just wanted to get some context of how much of that is the Class 8 versus the medium-duty and just any other sort of context. Is that some of the newer product that dealers are stocking? Or just sort of any other context there. -------------------------------------------------------------------------------- Michael Cancelliere, Navistar International Corporation - President of Truck & Parts [39] -------------------------------------------------------------------------------- Yes -- this is Michael. So really the dealer inventory is just growing at levels that we consider more normalized levels. Throughout the year, the strength in the market demand has caused the inventory -- dealer inventories to dramatically decline. And what we've been doing throughout the year due to the challenges we had earlier in the year on supply constraints, we were prioritizing customer deliveries over dealer stock units. So they're now returning to normalized levels, as we work through the backlog, dealers are excited about our new product line. They are selling to more conquest customers than ever before, not only number of units but number of customers. And they're moving out their old inventory and stocking up with the new product. It's -- they recognize how important it is to have inventory on the ground. They look forward to a positive 2019. And you can't sell what you don't have. So they're comfortable with those inventory levels. -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [40] -------------------------------------------------------------------------------- Yes. I think the inventory levels that we're looking at, as Michael indicated, we had to short the dealers almost for a period of time to make sure we were delivering to customers who had ordered units rather than putting the units on the lot. To your point, a lot of the medium-duty stuff and some of the vocational stuff do go through dealers and so you see a very nice mix of products on their lots, not exclusively those. They do also have heavy and other Class 8 products. And you know, we're kind of looking to keep them in a range. And they're looking to keep in a range of 60 days of inventory, given the current sales rates, and that's kind of the ballpark that we're in. -------------------------------------------------------------------------------- Persio V. Lisboa, Navistar International Corporation - Executive VP & COO [41] -------------------------------------------------------------------------------- Yes. And Troy if I may add. The other important think of the quality of the inventory the dealers is that we completed a transition for the new products. So now, the inventory that is on the ground is off new -- all the new models, the new MV, the new HV with A26, all the launches that we completed in the second half of last -- of this year. -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [42] -------------------------------------------------------------------------------- Yes. So it's pretty good -- so it's a pretty good -- quite frankly, we're very pleased with where that inventory is right now. And I think the dealers are as well. -------------------------------------------------------------------------------- Operator [43] -------------------------------------------------------------------------------- And our next question comes from Erika Jackson of UBS. -------------------------------------------------------------------------------- Erika Mary Jackson, UBS Investment Bank, Research Division - Equity Research Associate and Generalist [44] -------------------------------------------------------------------------------- I was just wondering if you can touch just a little bit on the supplier constraints that you called out in Q4. I know it's a strong industry, and it's mostly (inaudible) that. But I guess, just specifically wondering, if you are able to clear all the shipments that were missed in Q3 that I think you expected to push into Q4? And I guess to what extent you expect supplier constraints continue in 2019? -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [45] -------------------------------------------------------------------------------- Yes. What happened was as we and the rest of the industry ramped up their volumes much, much earlier in the year. We, as well as our contemporaries in the industry, ran into a handful of supply issues from just a handful of suppliers. We worked very hard with those to eliminate these bottlenecks. Some of which were very structural in terms of tooling capacity and things like that. By and large, as we entered the fourth quarter those issues were resolved. Given though that the market is up, the supply chain is really just pulled very, very tight right now. And what would be traditional levels of buffers between suppliers and ourselves, they're just not there. And so any type of disruption, we had a couple of hurricanes, for instance tend, to put stress on supply chain. What that does now, we're in a mode, it's not so much that we'll lose units, it's that we have to incur premium freight so that we can expedite parts to keep the line running. So we're not in a position today where we lose units as such. We've added a second shift to one of our lines in Escobedo. Where we really are is, we are in a position where the cost, because of force majeure, so to speak, or acts of nature can be a little higher than we planned. But those costs continue to improve as the -- I think as the supply chain continues to stabilize. The holiday period would be a great time, to be very honest, for some of our suppliers to refill those buffers and make sure that the, not just ourselves, but the balance in the industry is more normal when we go forward. Phil? -------------------------------------------------------------------------------- Philip J. Christman, Navistar International Corporation - President of Operations [46] -------------------------------------------------------------------------------- No. I think that you covered exactly right. Look, we're confident in the strength of order board and supplier capacity, put on additional shift in Mexico, and we're excited to build more units for our customers. -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [47] -------------------------------------------------------------------------------- Great. -------------------------------------------------------------------------------- Erika Mary Jackson, UBS Investment Bank, Research Division - Equity Research Associate and Generalist [48] -------------------------------------------------------------------------------- Got it. And then also just wondering if you have any expectations that you can share for the Class 4/5 product. Have you given any like market share targets or how that -- you expect that to ramp up over this year? -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [49] -------------------------------------------------------------------------------- Yes. Well, you know we just introduced it in November, and it's a great product. The more I'm around it, the more I like it. And of course, I guess, I'm kind of biased. But we had a launch event where we -- I'm going to turn it over to Michael he'll give you the specific of it. But a tremendous enthusiasm around this product. It's a -- I think it's going to do very well. -------------------------------------------------------------------------------- Michael Cancelliere, Navistar International Corporation - President of Truck & Parts [50] -------------------------------------------------------------------------------- Yes. Troy, exactly right. The launch event customers -- the product was extremely well received. What they like is that there is finally a product offering by a true commercial truck manufacturer, one that that understands the business and knows how to build a robust product, give the customer flexibility and have the dealer network to support that product. So the receptivity has been really terrific by customers. -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [51] -------------------------------------------------------------------------------- Yes. We have about 300 customers there. And quite frankly, I think, we split the production with General Motors. We won't go into the details on those numbers right yet, because not fully aware of what General Motor's order profiles are. But I think we're quickly approaching that we'll be kind of, I don't want to say sold out, but we're quickly subscribing the portion of the volume that we have allocated to ourselves. We find it's a very unique product, right? I mean, it's got a 23,500 GVW, and I think a normal Class 4/5 truck in that particular segment might be a 19,500 GVW. So it definitely has some additional capability that lets it play up. And this, by the way, is a growing segment. So we haven't participated here for a while. We're really excited to get into it. And I think we're going to surprise ourselves with how well we can do. But we'll have to learn a little bit because it's a different set of customers in some cases, but we're pretty pleased. -------------------------------------------------------------------------------- Walter G. Borst, Navistar International Corporation - Executive VP & CFO [52] -------------------------------------------------------------------------------- Yes. Maybe Troy, if I can just add. Because this is a new product and kind of a reentry of a segment for us. But the Class 4/5 segment is about 85,000 units, and the part of it that we'll compete in is about half of that amount. So that's 40,000 to 45,000 units there that we can go after our fair share of. So just to kind of size the opportunity, I think, both GM and Navistar have put their pricing out. It's a little over $40,000 a unit, I think, is where the MSRPs are, $40,000 to $45,000. So that'll help you gauge this a little bit. And then for us, it's 2 things. It's one, it's the sales of our units, which our customers are relishing to, to get into their hands is -- was mentioned here. But then secondly, it's also assembling those vehicles for GM under our contract manufacturing arrangement, which will help then some of the fixed cost in our manufacturing facilities, in particular, in Springfield. -------------------------------------------------------------------------------- Operator [53] -------------------------------------------------------------------------------- And our next question comes from Seth Weber of RBC Capital Markets. -------------------------------------------------------------------------------- Emily Gretchen McLaughlin, RBC Capital Markets, LLC, Research Division - Associate VP [54] -------------------------------------------------------------------------------- This is Emily McLaughlin on for Seth. On the 1% share improvement embedded in the 2019 outlook, do you expect improvement across all core products or is there more of a pickup expected in certain vehicle classes? -------------------------------------------------------------------------------- Michael Cancelliere, Navistar International Corporation - President of Truck & Parts [55] -------------------------------------------------------------------------------- Yes. Emily, this is Michael. So it would be a combination of all the vehicle classes. Again, we have the industry's newest product line and customer receptivity has been terrific throughout the product. In fact, in November, while the industry shrunk 20% on heavy orders, our orders were up 102% year-over-year. So, yes. And on the medium side as well, we're seeing a -- we recently launched the MV Series, and our order share was up over 3 points on year-over-year basis. In fact, our chargeouts were in excess of the industry growth last year. However, we weren't able to get them all through due to delays in supply chain as well as backup at body companies. But since we've launched the MV Series, the industry's largest buyers have responded well to. And of course, a lot of customers were waiting for it because they wanted to make sure that they have the latest product and models, particularly, in the leasing industry where resale value is important. -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [56] -------------------------------------------------------------------------------- So we have a backlog that basically supports increased market share, we think, across all of our product line up. It will be a little choppy because of the fact that some of this stuff has to go through bodies -- through body manufactures, and it'll take longer for them to get registered. So the right thing to look at is basically our chargeouts and kind of year-over-year improvements in chargeouts. -------------------------------------------------------------------------------- Emily Gretchen McLaughlin, RBC Capital Markets, LLC, Research Division - Associate VP [57] -------------------------------------------------------------------------------- Okay, that make sense. And then just a follow-up. Do you have any thoughts on the spike in industry of Class 8 cancellations in recent month and new orders? Are you hearing anything from dealers in terms of the quality of new orders? -------------------------------------------------------------------------------- Michael Cancelliere, Navistar International Corporation - President of Truck & Parts [58] -------------------------------------------------------------------------------- Yes. So -- I think as we stated earlier, we believe our backlog is firm. The majority of our orders are sold. They're for -- they're by customers, we've, in many cases, done business with before, and we're confident that they'll take the product. Our dealers don't put trucks on order unless they've got firm orders from customers on it. As well as our dealers' stock orders, we believe are firm as well. We hadn't create an environment where we're asking dealers to put orders in for a 12-month period or so, they pretty much put orders in on a short-term basis. They're very bullish about the business as well as their customers are optimistic about 2019, and the need to have new fuel-efficient trucks that drivers like, that gives them -- that impacts their bottom line, helps them make -- become more profitable. So dealers want to have trucks to sell and customers are looking to buy trucks, particularly, with the safety equipment on it to protect the driver and attract drivers as well. So we don't see -- we're not overly concerned about cancellations on our order board. -------------------------------------------------------------------------------- Operator [59] -------------------------------------------------------------------------------- And our next question comes from Rob Salmon of Wolfe Research. -------------------------------------------------------------------------------- Robert Hudson Salmon, Wolfe Research, LLC - Research Analyst [60] -------------------------------------------------------------------------------- A quick follow up with regard to the long-term supply agreement you guys signed alongside the Navistar Defense kind of partial sale. How should we be thinking about the revenue impact of this agreement? And if pieces of the business are shifting from Truck into the Parts businesses as we look forward once it's completed? -------------------------------------------------------------------------------- Walter G. Borst, Navistar International Corporation - Executive VP & CFO [61] -------------------------------------------------------------------------------- Yes. So, I think what you'll see, and again, we'll provide some additional details around this after the transaction closes. But I think, you'll see 2 pieces, one, as I mentioned earlier in the call, defense revenues will be down in '19 versus '18, given the outsized year that we had in in 2018. And then secondly, once we go down to a 30% stake, we won't be reporting the revenues from NAV defense, we'll just be reporting our equity interest there. But we will continue to have the MilCOTS sales to the venture and that will run through our numbers, but that's a fraction of the $534 million of revenue that you saw in '19. -------------------------------------------------------------------------------- Robert Hudson Salmon, Wolfe Research, LLC - Research Analyst [62] -------------------------------------------------------------------------------- Right. And then Walter, just as a kind of follow-up to that. I'm assuming you guys are going to add back the 30% to the adjusted EBITDA number from the minority interest. Am I thinking about that right or will that be excluded from the EBITDA, prospectively? -------------------------------------------------------------------------------- Walter G. Borst, Navistar International Corporation - Executive VP & CFO [63] -------------------------------------------------------------------------------- No. The 30% of the future earnings will be in the adjusted EBITDA number, will be included, yes. -------------------------------------------------------------------------------- Operator [64] -------------------------------------------------------------------------------- And our next question comes from John Sykes of Nomura. -------------------------------------------------------------------------------- John Sykes, Nomura Securities Co. Ltd., Research Division - Analyst [65] -------------------------------------------------------------------------------- One question I had was, what's the contribution that Class 6 and 7 make to revenues in EBITDA? Do you guys disclose that? -------------------------------------------------------------------------------- Walter G. Borst, Navistar International Corporation - Executive VP & CFO [66] -------------------------------------------------------------------------------- I don't think we've broken that out separately. But you can, I think, you can get a good sense of what our volumes are in the back of the K. -------------------------------------------------------------------------------- John Sykes, Nomura Securities Co. Ltd., Research Division - Analyst [67] -------------------------------------------------------------------------------- Okay. The next one is electrification. When do you really see that becoming a meaningful part of the business? -------------------------------------------------------------------------------- Persio V. Lisboa, Navistar International Corporation - Executive VP & COO [68] -------------------------------------------------------------------------------- Well, John, I don't know if you saw but today we just announced that we are creating a new mobility business unit I think Troy alluded that on his remarks. We -- that is a reality right now for us. We've been working the technology for now some time. Actually, Navistar was one of the first commercial vehicle companies to introduce our eStar back in 2010. So we have a lot of experience in the field and one of the things that we decided to do right now is really to expand our reach in the business more -- beyond the technology. We are really -- we are needing to get into the what we call this procurement experience for eMobility, which is really about the specs that the customers will help specing vehicles, will help developing vehicles, will help actually with financing of vehicles and now more available brands. The idea is that we will work on infrastructure and service network to support those vehicles, that's what this business unit is about. And to lead that business unit, we just brought to the company today, now one of the most reputable executives in the market, Gary Horvat. He was the CTO for Proterra, and he really now kind of joining the team right now. So more to come. So that's the reality for us is one of our priorities for the future. -------------------------------------------------------------------------------- John Sykes, Nomura Securities Co. Ltd., Research Division - Analyst [69] -------------------------------------------------------------------------------- So what is the -- so the game plan is to sort of start with this eMobility business, get kind of an infrastructure type of business in place? And -- I mean, I'm assuming like the product itself, so it's easy for you guys to make an EV truck, right? -------------------------------------------------------------------------------- Persio V. Lisboa, Navistar International Corporation - Executive VP & COO [70] -------------------------------------------------------------------------------- Well, I think it starts with the product but no, really. I think the fact that we have the largest dealer network available in the market. And the fact that we are in contact with customers that also want to buy diesel products today. So we are really focusing on enabling the electrification in the segment beyond the product, I would say. -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [71] -------------------------------------------------------------------------------- I mean, I think, what we -- here's how we're looking at it. It really starts with the customer, right? So we're going to go out -- we -- so we have customers -- we know customers who -- they have an interest in the technology, and we believe the technology will work for them in such a way as to be manageable and/or improving their TCO at some particular point in time. And so those are the customers that we really have to kind of lean toward -- forward in our solutions. And we've indicated previously that the place where we think this most makes sense are school buses, okay, which (inaudible) and medium-duty trucks because in both cases the charging infrastructure is less significant than it is with, so to speak, an on-highway tractor. We've said previously, we'll have trucks on the road next year, and we'll have trucks in customers' hands the year after. But what Persio really referenced is, look, there's a lot of cycles of learning here, right? I mean, this is a field that you can spend a lot of money and there could be a lot of upset customers when -- they decide, "Wow, the electrical vehicle that I just spent a lot of money for really doesn't satisfy my needs." Quite frankly, we're looking to have very successful experiences for us and our customers, and we think our approach will lead us in that direction. Again, as Persio, indicated, we've been working on this stuff since much earlier in the decade. So we have some pretty developed thoughts. -------------------------------------------------------------------------------- John Sykes, Nomura Securities Co. Ltd., Research Division - Analyst [72] -------------------------------------------------------------------------------- Yes, I mean -- I guess, the kind of genesis of my question is, suppose regulations change in certain states, right? I mean, start saying you can't bring a diesel truck into the city limits, it's got to be EV at that point. So then that -- can you guys -- are you guys ready if that happens to, boom, we have a product? -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [73] -------------------------------------------------------------------------------- That's our goal. I mean, you know, that's our goal. I mean, the strategic flexibility, right? That's what -- we don't see that exact circumstance today. But if we're nothing here with Navistar, we are ready with alternatives. -------------------------------------------------------------------------------- John Sykes, Nomura Securities Co. Ltd., Research Division - Analyst [74] -------------------------------------------------------------------------------- Okay. Now that's -- And then I guess lastly, it sounds like 2019 is going to be a decent year, right? And I know, we don't want to look too far forward. But how do you sort of -- I mean, you're doing a good job with the balance sheet. So you're taking out kind of a lot of volatility in the balance sheet. But how do you really take out volatility in the business just given it's a cyclical business that -- like the parts business is never going to be enough, I don't think, to compensate for the Class 8 business, for example. So how do you really smooth that out and make it less cyclical over time? -------------------------------------------------------------------------------- Michael Cancelliere, Navistar International Corporation - President of Truck & Parts [75] -------------------------------------------------------------------------------- Yes. Well, first of all, 2019 is going to be a great year, okay? So not a good year, it's going to be another great year, and we're going to have to share -- yes, I think, you did. We're planning to put up better results as you see in our guidance. We've got the newest product lineup in the business. We've got a lot of market share that we can still grow. And so, I mean, if you look to the future, we're doing a couple of things and these are not new things. But really, we see upside on revenue growth, and then we see the ability to further improve our margins by reducing our cost, taking advantage of the alliance. Both the global scale that the alliance brings as well as the integrated powertrains that we'll be introducing into our product. So our goal as a management team continues to be profitable at all points of the cycle. And continue this positive free cash flow that we experienced here in '18 and will continue into '19 and the future so that we can continue to improve even further on those balance sheet actions that you've referenced. -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [76] -------------------------------------------------------------------------------- I mean, we think it's pretty straightforward. And we think we're very compelling, something other than a cycle play, because we've already done so much to improve our margins, okay? And we have more opportunity, again, through 2 strategies, primarily, one, is global scale through the procurement joint venture, and the second, is getting into the integrated powertrain. And then ultimately, the parts revenues that basically comes -- that basically come out of that. And then we have this tremendous opportunity for upside market share. When you look at our historical market share and the success that we're having in the market today. So we control revenue against that, okay? That -- and then that spins off cash that lets us put the balance sheet in order. And when you look at that and you say, "Wow, those are the 3 things that are really important, not the cycle." Okay? Because of the fact that we have this ability to function in a profitable range at all points of the cycle. That's the way I would tell the story, obviously. -------------------------------------------------------------------------------- John Sykes, Nomura Securities Co. Ltd., Research Division - Analyst [77] -------------------------------------------------------------------------------- Okay. Yes, I mean, it seems like 4 through 7, that never seems to be that overly cyclical versus Class 8, right? So... -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [78] -------------------------------------------------------------------------------- Yes. That's true. And we have big footprint in that 6 and 7 space. Now we have the opportunity to increase that footprint. All right, we probably should move on to the next question. But thank you, John, for your interest. -------------------------------------------------------------------------------- Operator [79] -------------------------------------------------------------------------------- And our next question comes from Jerry Revich of Goldman Sachs. -------------------------------------------------------------------------------- Jerry David Revich, Goldman Sachs Group Inc., Research Division - VP [80] -------------------------------------------------------------------------------- Walter, I'm wondering if you could just spend a little bit more time stepping through the moving pieces around the EBITDA guidance, based on the top line guidance, it looks like you're only guiding for 7% incremental margin, but earlier in the call, you folks talked about price -- cost is positive and so can you just step us through any headwinds through incremental margins in '19 or are you folks just giving yourselves room to execute? Any pieces that you want to flush out, better headwinds that we're maybe missing? -------------------------------------------------------------------------------- Walter G. Borst, Navistar International Corporation - Executive VP & CFO [81] -------------------------------------------------------------------------------- Sure. So let's just go through the pieces again. We expect gross margins to be higher in '19. We indicated 19% to 19.5%, so that's up about 0.5 point from what we saw in '18 and it's the things that you mentioned, pricing, we expect to be favorable. We expect to realize further benefits from our procurement activities, including from the JV and that will help offset some of the headwinds that we're seeing in commodity prices and freight cost. Commodity prices were to come down, as we're starting to see them decline a little bit, then that could be a positive comps. The EBITDA margins are flat, I think, this is what we've kind of guided to at the midpoint year-over-year, because we are making some investments in our future, in particular, in future product engineering investments. So we've mentioned, previously, in our calls that while our engineering spend will be more efficient going forward as part of the alliance with the TRATON Group, that doesn't necessarily mean that they will be lower going forward as we invest in these integrated powertrains, which will then drive our results in the future. So the initial guidance is relatively flat on EBITDA margins, but that's going to set us up for the success, in the future, in the few years out, we still want to be getting our EBITDA margins up to 10%. -------------------------------------------------------------------------------- Jerry David Revich, Goldman Sachs Group Inc., Research Division - VP [82] -------------------------------------------------------------------------------- Okay. And then in terms of -- I know it's not the base case, but if the market were to turn negative exiting '19, I think, typically for OEMs, we see mid-teens type decremental margins throwing out and you folks obviously have a lot of irons in the fire, in terms of what you folks are working on. What would you expect your decremental margins to look like compared to the mid-teens that we typically see once the cycle moves the other way. And I appreciate that's not your base case in '19, but would love to understand how are you thinking about the dynamic whenever the cycle does turn? -------------------------------------------------------------------------------- Walter G. Borst, Navistar International Corporation - Executive VP & CFO [83] -------------------------------------------------------------------------------- Yes. That's probably a little bit too much specificity today, maybe that's a good question for a analyst meeting or something sometime. But I think the key drivers for us, Jerry, will continue to be what we referenced a couple of times on the call. We're bullish on our ability to grow revenues. And we're bullish on our ability to continue to reduce our costs, in particular, on the -- through the procurement JV that we have. So that will help weather any downturn as well. In fact, in a downturn that you're alluding to, we probably wouldn't have some of the headwinds that we currently have on commodity prices, for example. So that wouldn't be replicated in a subsequent year after '19 as we see it as a headwind here in the current fiscal year. So our focus is going to be on those 2 things, growing our revenues, even in the down market, we should be able to grow market share and continue with our cost initiatives. And that should allow us to be profitable at all points of the cycle. -------------------------------------------------------------------------------- Operator [84] -------------------------------------------------------------------------------- And that concludes our question-and-answer session for today. I'd like to turn the conference back over to Mr. Troy Clarke for closing remarks. -------------------------------------------------------------------------------- Troy A. Clarke, Navistar International Corporation - Chairman, President & CEO [85] -------------------------------------------------------------------------------- Okay. Hey, thanks to everyone. Look, I apologize, I have a little head cold. So if it was a difficult to hear me earlier in the call, I apologize for that. Look, we have been talking to some of you, several of you, every quarter for the last 6 years. And quite frankly, we appreciate your interest and your understanding of the issues and steps that we've taken on our journey. And questions you've asked are certainly welcome and insightful. And in many ways has helped us become a better company, and we appreciate that. And I certainly hope that my nasally voice doesn't mute the enthusiasm that I have personally for not only the progress that this company has made but the progress that we can make starting with 2019. 2019 is going to be, as Walter indicated in one of the final questions there, a great year for the industry and a tremendous year for us to make additional progress. And we're very enthused about it, and again we appreciate your understanding of our industry. Want to wish all of you a happy and joyful holiday season. Look forward to talking you at least in March and as Walter indicated, maybe we'll look for an opportunity to have another communication event that we can manage somehow during the course of the year. -------------------------------------------------------------------------------- Operator [86] -------------------------------------------------------------------------------- Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a great day.

MarketWatch / December 19, 2018 Treasury Secretary Steven Mnuchin has weighed and measured the recent destruction that put the Dow Jones Industrial Average on track for its worst December since 1931, and he appears to have drawn his own conclusions as to the impetus. Mnuchin during a Tuesday interview with Bloomberg News in Washington said that the effect of the financial-crisis-era Volcker rule and high-frequency trading have combined to sap liquidity in the market and insert an unprecedented measure of volatility in assets. The Volcker rule refers to the controversial standards put in place to prohibit banks from trading for their own accounts, in the wake of the 2007-09 financial crisis, while high-frequency trading refers to super-powered computers engineered to execute transactions at lightning-quick speeds, which has become arguably the dominant force in the market over the years since its advent. Fed Gov. Lael Brainard in a speech earlier this month said computer-driven trading in the Treasury market may also be fueling erratic swings, sometimes referred to as flash crashes. Brainard, in contrast to President Donald Trump’s Treasury secretary, said the post-crisis banking laws have not contributed to liquidity problems.

Scania Group Press Release / December 18, 2018 For Scania, it’s always about the details. Even when it comes to Swedish Christmas traditions. That is why we asked one of our skilled engineers craft a new generation Scania truck out of gingerbread. Watch it happen at our research and development lab. .

Jim Park, Today's Trucking / December 11, 2018 TORONTO, Ont. — All the power in the world won’t get you anywhere if your transmission can’t manage it properly. Startability and gradeability are the two key factors in powertrain spec’ing, which means getting the power to the wheels safely — without wrecking the driveline — and having several ratios to keep the truck moving while climbing. In applications where the grades aren’t too severe, 10- and 12-speed transmissions can work even with the heaviest legal loads. When you start pulling 7, 8 and 9% grades with more than 62,500 kg in tow, you simply need more gears. In bygone days, this was the realm of the 5×4 and 6×4 duplex transmission. These were necessary before we had 2,050 lb-ft engines and 18-speed high/low splitter transmissions. The main gearbox had large steps between the gears, and the auxiliary transmission provided the incremental steps between the main gears. The modern 18-speed transmission, manual or automated, offers closer steps between the gears as well as high and low range shifts and a direct and overdrive split in each gear. The result is a transmission with fewer ratios overall — with more even steps between the gears — but much easier to operate. We can get by with fewer gears today thanks to the way engines have evolved, specifically when it comes to changes in their torque curves. Prior to 2000, most engines had distinct peaks to their torque curves, which limited peak torque to a pretty narrow range, sometimes less than 100 rpm. To allow the engine to operate at peak output, we needed lots of gears to keep the engine speed at or close to peak output. Gradually those curves flattened out and torque output increased so trucks could stay in certain gears longer. Today’s torque curves are more like plateaus — flat and broad, often extending through a range of 400 or 500 rpm and sitting way down low in the rpm range. Rather than downshifting through two or three gears when climbing a grade to stay at or close to peak torque, we now need only one or two gears. In Canada, the preferred multi-speed transmission for heavy haulers seems to the Eaton 18 speed. But of you want a high-horsepower engine, you’ll need to go with either Detroit’s DD16 or the Cummins X15 performance variant. For those engines, you’ll need something from Eaton. For years Pierre Aubin, owner of L’Express du Midi, Delson Transport, and Transport Audet of Ste-Catharine, Que., has been spec’ing Eaton 18-speeds behind his 600-hp Cummins engines. Between the three companies, he runs more than 100 B-trains and four-axle flatbeds with payloads of 41,000 and 38,000 kg, respectively. They’re all operating in northern Quebec and on that province’s notorious Cote du Nord, between Sainte-Anne-de-Beaupré and Sept-Isles. “That’s no place for an under-spec’d truck, let me tell you,” Aubin says. “You need all the gears and the close ratios on those roads. They are nothing like American highways. When you get to the top of that first hill, you’re looking into the eyes of God.” Most of his 18-speeds are manuals, by the way. He has a few UltraShift Plus automated 18’s and few automated transmissions in his straight-truck tanker fleet. “I do not see the value in spending an additional $8,000 for a less-reliable transmission,” he says. “Those automated transmissions are a pleasure to drive, I’ll admit that, but when they break down they leave you with no options but to call a tow truck.” In contrast, many other Canadian B-train fleets claim they are doing just fine with automated manuals. Winnipeg-based Paul’s Hauling is primarily a fuel hauler using B-train tankers. The company operates throughout Ontario and the four western provinces as well as on the winter roads around Thompson in northern Manitoba and Pickle Lake in northern Ontario. The company’s powertrain spec’ might seem surprising. The newer trucks in the fleet are all 13-litre engines at 1,850 lb-ft and 500 or 505 hp. The transmission spec’ includes Eaton UltraShift Plus and Mack mDrive, and the most recent delivery from Freightliner included the DT12 transmission. “The latest bunch of Cascadias we ordered from Freightliner were equipped with the DT12,” says Trent Siemens, director of maintenance at Paul’s Hauling. “We had been testing a few for about a year and Freightliner was watching them closely. They have now approved the transmission for our application with the DD13 engine at 505/1,850.” Daimler’s current brochure shows the maximum gross vehicle weight for the DT12 is 130,000 lb. (58,500 kg), so this application suggests it’s capable of even more with engineering approval. “We do not tell the OEMs specifically what we want. They give us what they feel is best for the application given our weight and terrain and the rest of our operating conditions,” Siemens says. The fleet also took recent delivery a few Peterbilts with Paccar MX13 engines at 510/1,850 and Eaton UltraShift automated 18-speeds. Later this year they will take delivery of some Mack Anthems with similarly spec’d MP8 engines and the new 13-speed mDrive HD transmissions. While smaller-displacement engines and proprietary “on-highway” transmissions keep turning up in fairly demanding applications, don’t count on seeing many of them in really heavy haul applications like the fleets that haul overweight loads with specialized equipment. For that crowd, it’s Eaton’s RT-series 18-speed manual transmissions or the Ultrashift Plus MXP automated 18-speed — or even a two-stick 5×4 or 6×4 setup. With 100-ton loads, the need for gears and tons of torque and horsepower are pretty obvious. While much of the on-road driving portion of those trips might be done with a lesser setup, it’s often the last few miles of a trip that dictate the spec’, says Rod Olyowsky, operations manager of Regina-based heavy-hauler Cara Dawn Transport. “More than half or our revenue comes from loads weighing 100,000 lb. or more,” he says. “We haul all over North America, but the most challenging jobs see us hauling into mine sites in southeastern British Columbia. They usually aren’t located a few miles from a freeway off ramp. They are often at the top of a 10- or 20-mile long 9% grade.” Cara Dawn runs mostly tri-drive tractors in the west with 600-hp/2,050 lb-ft engines mated to 18-speed transmissions, “We still have a few duplex 5×4 transmissions as well,” says Olyowsky. “Sometimes even those are barely enough.” Many of the older drivers who work in that sector are leery of the automated manual transmissions, but the UltraShifts are making their way into the business. “There’s a big difference between 140,000-lb. GVW and 280,000 to 300,000-lb. GVW on a 9% grade,” says Olyowsky. “The drivers prefer to be in control of what the equipment is doing.” Of course, a lot of drivers said that about 80,000-lb. GVW trucks when the Eaton’s AutoShift first emerged 20 years ago. It’s taken some time, but now many of those drivers won’t leave the yard with anything but an automated transmission. More options than ever Canadian fleets that operate six-and seven-axle combinations now have transmission and engine choices they may not have considered in the past. Transmission choices for really heavy applications are still quite limited, but the mid-weight market between 47,000 and 57,000 kg is now opening up to the 12-speed offerings. Gross weight may be less of a factor than it previously was, but the terrain you operate on will still be the determining factor for your transmission spec’. Along with the traditional 18-speed offerings from Eaton, we now see Volvo’s I-Shift and Mack’s mDrive HD providing additional ratios for heavy haul and severe service. These offer up to 14 forward gears with astonishingly low creeper ratios for specialty applications like pouring curbs and sidewalks by concrete mixers. They are also more than capable of handling some high-GVW on-highway applications if not 100,000-kg loads of mining equipment on the side of a mountain. Transmissions don’t care which engine is producing the torque, so with ratings mostly exceeding 2,050 lb-ft, most of the 12-speed transmissions can now handle big power. Neither Volvo or Mack offer an engine producing more than 1,860 lb-ft, so there’s obviously some redundancy in those transmissions. Daimler’s DT12 is also rated for 2,050 lb-ft, and it’s allowed in applications up to 130,000 lb. (58,500 kg) with a dual-plate clutch and approval from engineering. Here are a few choices worth considering. Allison TC10 Speeds: 10 forward / 2 reverse Torque rating: 1,850 lb-ft Gear Ratios Overdrive: 7.40 – 0.86 Dry weight: 1,074 lb. / 487 kg Detroit DT12 Speeds: 12 forward / 4 reverse Torque Rating: 2,050 lb-ft Gear Ratios Direct Drive: 14.93 – 1 Overdrive: 11.67 – 0.78 Dry Weight 518 – 639 lb. / 233 – 287 kg Eaton UltraShift Plus MXP (Multipurpose Extreme Performance) Speeds: 18 forward / 4 reverse Gear Ratios A-ratio: 16.70 – 0.73 B-ratio: 19.73 – 0.73 Torque rating: 1,650 – 2,250 lb-ft Dry weight: 978 lb. / 444 kg Eaton RT-18 Manual Speeds: 18 forward / 4 reverse Gear Ratios B-ratio: 14.4 – 0.73 Torque rating: 2,250 lb-ft Dry weight: 716 lb. / 324 kg Mack mDrive HD Speeds: 12, 13, 14 forward / 2 reverse Torque rating: 2,060 lb-ft Gear Ratios Direct Drive: 19.38 – 1 Overdrive: 17.58 – 0.78 Dry weight: 687 lb. / 312 kg Mack Maxitorque ES manual Speeds: 18 forward / 3 reverse Torque rating: 2,100 lb.-ft. Gear ratios: 16.42 – 0.71 Dry weight: 798 lb. / 359 kg Volvo I-Shift Speeds: 12, 13, 14 forward / 2-6 reverse Gear ratios: 11.73 – 0.78 Torque Rating: 2,300 lb-ft Dry weight: 720 / 324 kg

Navistar's Clarke Calls 2018 a 'Breakout Year' in Financial Results Heavy Duty Trucking (HDT) / December 18, 2018 Navistar International announced its fourth quarter 2018 financial results, reporting a net income of $188 million, up $53 million from the same quarter last year. For the whole fiscal year, Navistar reported a net income of $340 million, way up from just $30 million in net income for fiscal year 2017. Fourth quarter adjusted EBITDA increased 20% to $322 million, compared to $268 million one year ago. Fiscal year 2018 adjusted EBITDA saw a 42% increase to $826 million from $582 million in 2017. Full-year adjusted EBITDA margins increased to 8.1% up from 6.8% for 2017. This marks the sixth consecutive year of annual growth in adjusted EBITDA on both a dollar and percentage basis for the company. "2018 was a very strong year for the industry, and a breakout year for Navistar," said Troy Clarke, chairman, president and CEO. "We were the only truck OEM to grow Class 8 share during the year. With the industry's newest product lineup, superior quality, and a strong focus on customer uptime, we expect to gain market share in 2019 for the third year in a row." Revenues in the quarter increased 28%, to $3.3 billion, compared to fourth quarter 2017. The revenue increase was largely driven by a 45% increase in the company's "Core" volumes, which represent its sales of Class 6-8 trucks and buses in the United States and Canada. For the Class 8 retail market alone, Navistar’s share grew to 13.5% in fiscal year 2018 versus 11.8% in fiscal year 2017. For 2019, Navistar provided industry and financial guidance. The company expects retail deliveries of Class 6-8 trucks and buses in North America to be 295,000 to 425,000 units, with Class 8 truck deliveries making up 265,000 to 295,000 units. Revenues are expected to be between $10.75 billion and $11.25 billion and adjusted EBITDA is expected to be between $850 million and $900 million. "While we expect 2019 to be another strong year for Navistar and the industry, it's important to recognize that Navistar as an investment is much more than just a cycle play," said Clarke. "As our ongoing improvements demonstrate, the company also has strong opportunities to benefit by recapturing market share, growing parts revenue, improving margins, generating free cash flow and further de-risking the balance sheet." .

Reuters / December 18, 2018 Navistar International Corp reported a better-than-expected quarterly profit and raised its truck delivery forecast for 2019 on Tuesday, sending its shares up about 20 percent. The company has gained traction from a robust U.S. economy and is seeing strong freight demand drive sales of its high-margin, heavy trucks that haul goods across the country. The company's shares rose as much as 19.5 percent to $28.50 in morning trade, their biggest percentage gain in two years. Navistar said it plans to deliver more of its long-haul Class 8 trucks - used by the rigs that transport freight across America's highways - next year, as hauliers rush to replace older vehicles with more fuel-efficient ones. Production for these trucks is expected to rise 5 percent to 335,000 units in 2019, according to ACT Research, the industry body tracking the commercial vehicle market. Lisle, Illinois-based Navistar said it now expects to deliver between 265,000 and 295,000 of its Class 8 vehicles in 2019, from the 255,000 units to 285,000 units range it forecast earlier. The company said 2019 is shaping up as another very good year. "Class 8 sales remain well above replacement demand ... and volumes grew 60 percent, well above the industry growth rate of 36 percent," Navistar Chief Executive Officer Troy Clarke said on a post-earnings call. Navistar said volumes next year would get a boost from its recent launches in the Class 4 and Class 5 category. It expects to deliver between 395,000 and 425,000 units of Class 6-8 vehicles in 2019, from an earlier 385,000 units to 415,000 units range. The company also raised its 2019 EBITDA guidance to between $850 million and $900 million, from an earlier forecast of $775 million to $825 million. Revenue in the truck business, Navistar's biggest, rose 75.8 percent to $197 million in the fourth quarter ended Oct. 31. The company expects its 2019 revenue to be between $10.75 billion and $11.25 billion. Net income attributable to the company rose 39 percent to $188 million. Earnings per share rose to $1.89 from $1.36 per share, beating analysts' average expectation of $1.71. Navistar's revenue rose to $3.32 billion from $2.6 billion, also beating estimates.

You're correct Bob. The truck pictured is a model NO. The Mack N model indeed had the Budd cab that was also used by Ford and others. The truck pictured might be a Memphis Equipment Company conversion. Years ago, they bought many NOs and refurbed them with enclosed cabs.

Video - https://www.facebook.com/FordTrucksInternational/videos/ford-trucks-dakar-2019/168502653830105/

My understanding is, and it appears evident, Volvo doesn't want to supply parts for trucks over 15 years old. Are you working with Nextran?

Braking requirements changed significantly in 2009, resulting in the major introduction of European disc brakes in the US market, as well as larger drum configurations. https://www.iihs.org/iihs/sr/statusreport/article/44/8/4 https://www.nhtsa.gov/sites/nhtsa.dot.gov/files/fmvss/121_Stopping_Distance_FR.pdf https://www.bigmacktrucks.com/topic/42362-air-disc-brakes-the-next-stage/?tab=comments#comment-308910

Reuters / December 18, 2018 Truck maker Navistar International Corp on Tuesday reported a 39.3 percent rise in quarterly profit, driven by robust demand for its trucks. Net income attributable to the company rose to $188 million in the fourth quarter ended Oct. 31, from $135 million a year earlier. Earnings per share rose to $1.89 from $1.36 cents per share. The results surpassed Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of $1.68 per share. Revenue rose 28 percent to $3.32 billion from $2.6 billion. Navistar also raised its fiscal 2019 delivery forecast of Class 6-8 trucks and buses in the United States and Canada to between 395,000 units and 425,000 units, from the 385,000 units to 415,000 units range it forecast earlier. "2018 was a very strong year for the industry, and a breakout year for Navistar," said Troy Clarke, Chairman, President and Chief Executive Officer. "We were the only truck OEM to grow Class 8 share during the year. With the industry's newest product line-up, superior quality and a strong focus on customer uptime, we expect to gain market share in 2019 for the third year in a row."

Jim Park, Today's Trucking / December 13, 2018 TORONTO, Ontario — Big is a relative concept when talking about truck engines. Within the span of my career in the industry, “big” has crept upward from 350 hp back in the early 1980s to 600 hp today. The first trucks I drove in the late 1970s and early 1980s were sub-300 hp models like the Mack ENDT-676 I learned on — it generated 285 hp and a dizzying 1,080 lb-ft of torque — and the “Shiny 290s” I drove at Liquid Cargo Lines. We hauled three- and four-axle tankers with those Cummins NTC 290 engines. Some of the senior drivers at the company had 350-hp engines, but other than bragging rights, there wasn’t much difference between the two. There were bigger engines around at the time, like Caterpillar’s 3408, which was actually a marine and industrial engine. Some owner-operators managed to shoehorn those V8s under their hoods and went down the road with up to 800 horsepower under foot — at little more than two or three miles per US gallon. Mack’s E9 V8 engine was also around at the time, officially cranking out up to 500 hp, but there are accounts of some of these putting 650 hp or more to the wheels … after a few adjustments. Driving back then on hilly Interstate 81 between Syracuse, N.Y., and Scranton, Penn., I spent a lot of time behind a 290 staring at the four-way flashers of other guys with their 290s and 318s. The big dogs with their 500- and 600-hp Cats and Macks would roar by out in the hammer lane, leaving us under clouds of black smoke, wishing we had a little more juice. Wishing we had a little more and actually needing a little more are two different things. It would be hard to argue than any 40-ton American load needs 600 hp. You can build a better case for Canadian trucks that weigh 55,000 kg and more. The debate over big power has been raging for years. Do big engines burn more fuel? Is 600 hp and 2,050 lb-ft more efficient or productive than 500 hp and 1850 lb-ft? Do big engines improve productivity? Are they necessary? We have asked numerous engineers these questions over the years, and the consensus seems to be that the laws of physics demand a certain amount of power to move a certain load at a certain speed. Cruising along a flat section of road at 100 km/h will require X horsepower, let’s say 200, but it’s probably less with today’s advanced aerodynamics. If you travel at 110 km/h you might need 225 horsepower. At 90 km/h, you’ll need only 175. It doesn’t matter how big the engine is, it will still produce only what’s needed to maintain the desired speed. If you increase the weight, you’ll need more power to maintain that speed. If you’re pulling a hill, you’ll need more power to keep the truck moving at that speed. At some point, after dialing in several variables, you run up against the limits of the engine’s ability to maintain road speed on a hill. That’s when the 450s and 500s start losing ground to the 600s. You only pay for the extra power when you use it. Maintaining 100 km/h on a hill with 600 hp will require more fuel than a 450 that can maintain only 80 km/h. Engine power in the real world So much for physics. In the real world, if you have the power, you’ll use it, and yes, fuel economy will suffer. On the other hand, underpowered trucks are frustrating to drive, and might even be dangerous if they impede the flow of traffic. “Try running Hwy. 138 between Sainte-Anne-de-Beaupré and Sept-Isles on Quebec’s “Cote du Nord” with a B-train and a 475 engine,” observes Pierre Aubin, owner of L’Express du Midi, Delson Transport, and Transport Audet, of Ste-Catharine, Que. “You’ll be crying.” All of Aubin’s highway trucks are 600 hp and 2,050 lb-ft Cummins X15s, and he make no apologies for his choice of powertrain. “If it wasn’t working for me, I wouldn’t be doing it,” he says emphatically. “We haul heavy loads here in Quebec and you need that power. Do we need 600/2,050 in the U.S.? Of course not, but for equipment utilization, I’m not going to buy two separate fleets of trucks, one for Canada and another for the States.” Next, consider his business case. Overall, his spec’ – a Kenworth W900L with 86-inch studio sleeper, 600/2,050 X15, Eaton 18-speed manual transmission. and generally beefed up frame, crossmembers, driveline, for the heavy work — costs him about $25,000 more up front than a more “typical” spec’. But he claims that comes back two-fold on resale. “I have people calling me from all over Canada wanting to buy my used trucks,” he says. “I never have any problems getting my price because they know the trucks will last 20 years. And drivers love them, which is pretty important today.” In the same vein, Rod Olyowsky, operations manager of Regina-based heavy-hauler Cara Dawn Transport, runs a fleet of 30 heavy-haul trucks, mostly tri-drives, powered by Cummins X15 600/2,050 engines. While about half the work the company does is in the 50-ton range, the rest of it involves big loads, 100- and 150-ton loads into mine sites. For that work, big power is an absolute necessity. “We don’t even worry about weight or fuel economy,” he says. “This business is the polar opposite of the freight business. They fret about things like that, we buy the trucks we need to do a job.” Like Aubin, Cara Dawn could maintain a fleet of lighter trucks for the less-demanding jobs, but it’s hard to make that work on paper. Olyowsky says fuel costs are always a concern, so the company focuses on things they can manage, like idle reduction. “There’s no point worrying about fuel efficiency when you’re pulling 200,000 lb.,” he says. “We can attack that in other ways.” Added truck revenue Meanwhile, at Winnipeg-based Paul’s Hauling, the engine spec’ is very important for a different reason. That company hauls petroleum products in B-trains, and every liter in the tank is money in the bank. They run 13-liter Mack and Detroit engines at 505/1,850 rather than the 600/2,050 Cummins engines because of the weight savings. “We load to gross and every 100 lb. is worth so much in revenue at the end of the year,” says maintenance director Trent Siemens. “Every pound counts. We’d be giving up 400-500 lb. on every load with the bigger engines.” Over the past few years, the company has upped the ratings on its 13-liter engines, going from 485 to 505 hp on some models. Later this year they’ll take delivery of a few Peterbilts with MX13 engines at 510/1,850. That said, Pauls’ spec’ now includes 70-inch sleepers, fridges, and other amenities that drivers crave, and everyone knows how difficult it is to find drivers. “We do consult our drivers on future truck spec’s, and of course they’d love an 550 X15. But they understand the weight issues,” Siemens says. “Given a choice between the bigger sleeper and a bigger engine, they’ll take the sleeper every time.” On the owner-operator front, has anyone ever met one who didn’t want more power? That may not be a fair assessment, but sensible ones will match their equipment to the job, like former highwaySTAR of the Year Rene Robert. He recently spec’d a new Peterbilt 587 for a job hauling magnesium chloride in B-train tanks around Manitoba and Western Canada. His spec’ included a 605/2,050 X15 and an UltraShift MXP automated 18-speed. “There wasn’t much to talk about when I bought the truck. I knew I needed the 605/1,850,” he says. “I have been hauling trains for years and I know what works. I still have a 20-year-old Freightliner with a Cat C15 550 engine. It worked well for me all those years on trains and it’s still in good enough shape to keep and put a driver on. That work is hard on an engine, so you need a big block that will stay together.” He says all things being equal, the fuel economy on the truck is decent, 4.5 mpg (52.3 L/100 km) at 62,500 kg, and the truck does the job well. “I’m not sure what advantage there would be in spec’ing something smaller, even an X15 at 550/1,850. I’d always be wishing I had ordered the bigger one.” Engine Spec'ing Philosophies Thankfully, there are many different philosophies on how best to spec’ a truck and run a trucking company. Some are steeped in the full-aero fuel economy mindset, while others see trucks strictly as a means to an end and will buy whichever model and powertrain makes the most money. Somewhere in all that is the need to match the spec’ to the job. And if the job requires 600 hp, so be it. If a 700-hp engine were available, they’d probably eschew the 600 and buy the bigger one. “Not many fleets spec’ trucks the way I do, and believe me, they should be free to spec’ their trucks anyway they want,” says Aubin. “But I have been doing it this way for 38 years. If it’s the wrong way then I should have gone bankrupt a long time ago.” The line separating big engines from the others is blurring. When you can get more than 500 hp and 1,850 lb-ft from a 13-liter block, there’s not much space between those and the big-block engines delivering 100 additional horses and 200 extra pound-feet. All the newer 13-liter engines on the market now deliver Super-B pulling power, and a surprising number of fleets are successfully using them in just such applications. But as some are fond of saying, “there’s no replacement for displacement.” Currently only two engines deliver the extra power heavy-haulers need, the Performance variant of Cummins’ X15 and Detroit’s DD16. Once you exceed 62,500 kg, as most heavy-haulers do, the need for the addition torque and horsepower is legitimate. It’s no longer a luxury like it might be for the Texas bull-haulers who just like the left lane. Here’s a list of some of the big power options currently available: Engine Disp. HP Torque Dry weight (lb./kg) Cummins X15 Perf 15.0L 485 – 605 1,650 – 2,050 3,152 / 1,430 Cummins X15 Econ 15.0L 400 – 500 1,450 – 1,850 3,152 / 1,430 Detroit DD16 15.6L 500 – 600 1,850 – 2,050 2,837 / 1,287 Detroit DD15 14.8L 400 – 505 1,250 – 1,750 2,718 / 1,233 Detroit DD13 12.8L 350 – 505 1,250 – 1,850 2,487 / 1,128 Mack MP8 13.0L 425 – 505 1,560 – 1,860 2,597 / 1,177 Volvo D13 12.8L 375 – 500 1,450 – 1,850 2,605 / 1,182 Paccar MX13 12.9L 405 – 510 1,450 – 1,850 2,600 / 1,179

Limited run of suicide-door Lincoln Continentals coming next summer Michael Martinez, Automotive News / December 17, 2018 DETROIT — Nine months after promising dealers it would bring back suicide doors on its Continental sedan, Lincoln on Monday confirmed the vehicles will be in showrooms next summer as part of a very limited run for the nameplate's 80th anniversary. The 2019 "Continental Coach Door Edition" will have a wheelbase 6 inches longer than the standard sedan to accommodate the same type of rear-hinged doors that were first offered on the vehicle in 1961. It's an effort by executives to leverage the brand's glory years and spark interest in a vehicle whose U.S. sales have fallen dramatically since re-entering the market only a little more than two years ago. Lincoln said it would make just 80 suicide-door Continentals for the 2019 model year. It will also make a "limited" number of 2020 model year vehicles, although it declined to provide a number. Lincoln plans to sell the suicide-door models for more than $100,000 each, but specific pricing wasn't announced. The base model starts at $47,140 ($46,145 plus $995 destination and delivery). "This Lincoln Continental echoes a design that captured the hearts of car enthusiasts around the world," Joy Falotico, Lincoln Motor Co. president, said in a statement. "It's something bespoke or unique only Lincoln can offer in a thoroughly modern way." Coach doors, also known as suicide doors, date back to many pre-World War II vehicles. Lincoln was considering them as recently as 2007, Automotive News reported at the time. It was a source of tension among designers then. Conventional rear doors won out during the process because they were deemed more feasible for a production vehicle. Now, though, designers say the doors help show off the vehicle's lush interior, which will include a pass-through console features a stowable tray table with a tablet holder and wireless charging pad. "People appreciate elegance and glamor," Lincoln's design director, David Woodhouse, said in a statement. "And they want the easiest way to get in and out of a vehicle. These doors answer to both." The vehicle will be powered by a 3.0-liter twin-turbocharged V-6 engine and will be available only in a high-end Black Label trim. Continental sales have plummeted 30 percent this year through November, and its U.S. future may be in doubt, although it continues to be a hot seller in China. Lincoln produces the vehicle alongside the Ford Mustang in Flat Rock, Mich., where it plans to eliminate one of two daily shifts in the spring. Photo gallery - https://www.autonews.com/gallery/cars-concepts/lincoln-continental-suicide-doors .

Steering gears no longer available for a model year 2000 truck? Incredible. The Volvo 15-year parts rule rings true. Are reman units still available from the OEM manufacturer - Sheppard? (https://www.rhsheppard.com/contact/) For example, your 392 series Sheppard (20QC4328M), what did the folks at Sheppard technical support say? ..........1-800-274-7437 20QC378AM Sheppard 292SP6 20QC4328AM Sheppard 392SBX

As the F-150 got bigger and pricier, Ford saw an opening Michael Martinez, Automotive News / December 17, 2017 DETROIT — To understand why Ford is reviving the Ranger mid-size pickup after an eight-year hiatus in the U.S., look no further than its big brother, the full-size F-150. Executives say there was no eureka moment that spurred the Ranger’s return, but the business case became obvious when the first aluminum-bodied F-150 was built in November 2014. The 13th- generation pickup was 2 inches wider than its predecessor, and it came with a bigger price tag, too. For years, Ford used the F-150 as the rationale for not selling the Ranger in this country, arguing it didn’t want to cannibalize sales of the best-selling F series, which generates the bulk of its global profits. But by the time the latest generation debuted, the F-150 had simply grown too large and too expensive for some buyers, and Ford would much prefer they get behind the wheel of a Ranger than go to the Chevrolet dealer down the street. “It was pretty clear to us there was a price band and a size that would fit under the F-150,” says Ford’s president of global operations Joe Hinrichs. “We knew we needed to work to make the business case.” That work got going in earnest in 2015, when company officials identified an opportunity to convert the Ford Focus plant in Wayne, Mich., to build body-on-frame pickups and utilities instead of low-margin cars. Since the Ranger alone wouldn’t fill the sprawling Michigan Assembly Plant, executives chose to bring back another storied nameplate to pair with it: the Bronco SUV. The desire to build the Ranger and Bronco in a renovated Michigan Assembly became a key bargaining chip that fall in negotiations with the UAW. Days before Thanksgiving, union members ratified the agreement and secured the Ranger’s return. Different billing Three years later, the Ranger, due in showrooms next month, is joining a suddenly crowded midsize segment. Ford is billing the Ranger as a rugged lifestyle vehicle that’s comfortable on sand, dirt or rocks and can ferry buyers — and their gear — on weekend camping trips or excursions to the beach. It’s a big shift from the yeomanlike F-150 that’s more suited for construction sites or lumberyards. “Our research says the buyer isn’t someone who wants an F-150 and can only afford a Ranger; they want something different,” Mark LaNeve, Ford’s vice president of U.S. marketing, sales and service, said in an interview. “We felt Ranger would be much more of a personal-use, adventure product. It became a relatively easy decision.” The midsize pickup segment has rebounded drastically since Ford closed its Ranger plant in St. Paul, Minn., in December 2011. It has more than doubled in size since 2014, to more than half a million vehicles this year, and is up 16 percent this year through November after rising less than 1 percent in 2017. The long-dominant Toyota Tacoma is closing out its fourth consecutive year of gains, and General Motors, which bowed out only for a brief period, has sold some 600,000 Chevy Colorados and GMC Canyons in the Ranger’s absence. Ford also will face competition from the upcoming Jeep Gladiator, which is similarly aimed at adventure-ready buyers. “We’re about to enter a golden era for lifestyle trucks,” Chase Disher, chief analyst at Autolist, said in a November study about the segment. IHS Markit predicts only modest growth in the segment into the next decade to just over 600,000 vehicles, according to analyst Stephanie Brinley, which means the players would be fighting over existing buyers more than attracting new ones. “The majority of the growth has already happened,” Brinley said. “Organic growth is not going to be easy at this point.” The previous Ranger was regularly among the segment’s top sellers and No. 1 as recently as 2004. Ranger sales routinely totaled more than 300,000 a year in the 1990s before fading in the early 2000s. Ford says it built 7 million Rangers from 1982 through 2011 and will lean on the nameplate’s history to help sell the new model. Autolist says the Ranger is still the second-most recognized midsize pickup behind the Tacoma, despite being out of the market for so long. If the new Ranger is to be successful, Brinley says, it likely will have to steal share largely from the Tacoma, the oldest product in the segment. Ford believes it has a good chance of conquest, saying that nearly 80 percent of early hand-raisers for the Ranger don’t own a Ford vehicle today. LaNeve said he’s not concerned about Ford’s late re-entry relative to GM and is confident the arrival of the Ranger and Gladiator should drive more growth. “You are going to continue to see proliferation in this segment,” LaNeve said. “This won’t be the end.” Watching GM LaNeve, a sales executive at GM before coming to Ford in 2015, said the decision to bring back the Ranger was further cemented by looking at what his former employer did with the Colorado and Canyon. LaNeve said the prior-generation pickups significantly ate into sales of the full-size Chevy Silverado, but that hasn’t been the case with the revived versions. “When they came back in, what was affirming to us is that we didn’t see in the data cannibalization of their full-size truck nearly to the degree before,” he said. “That was affirmation of our own market data.” The F series has been the nation’s best-selling truck for 41 straight years, and the price of the F-150 has been steadily inching up. Ford sold more than 72,000 F-series pickups in November at an average transaction price of roughly $42,000, LaNeve said. The upcoming Ranger, meanwhile, will start at $25,395 and top out at over $40,000. That’s about the same as the segment-leading Toyota Tacoma, which starts at $26,595 for the 2019 model, but more than GM’s midsize duo. Pricing starts at $21,495 for the 2019 Colorado and $22,095 for the Canyon. All prices include shipping. Although consumers are receptive to the high-priced vehicles — Lariat, King Ranch, Platinum, Limited and Raptor account for roughly one-third of F-150 sales — rising prices overall for the vehicle have pushed some buyers out of the market, Hinrichs admitted. And then there was the issue of size. Some pickups are so massive, they barely fit in standard parking spaces. “Customers want something that’s ‘garage-able,’?” Hinrichs said. “We feel really confident the Ranger buyer is different than the F-150 buyer.” That buyer, Ford believes, craves off-road performance and capability. The Ranger’s turbocharged 2.3-liter four-cylinder engine will be able to tow and haul more than the V-6 gasoline offerings from its rivals, Ford says. Simpler configurations It will come in just three trim levels: XL, XLT and Lariat. Ford will sell two-door SuperCab and four-door SuperCrew configurations, with each offered in either two-wheel drive or four-wheel drive. An off-road FX4 package will be offered across all trims. Although those options add up, the Ranger is available in a fraction of the myriad ways an F-150 can be ordered. Interior and exterior designs on the Ranger have been changed to give the truck a more rugged look for U.S. buyers compared with the overseas model. It has a mostly steel body and axles made by Dana Inc., which also supplies the Jeep Wrangler. “We’re fairly confident Ranger’s going to be a big success,” Chad Callander, the truck’s marketing manager, said during a media drive of the truck in San Diego last week. “We intentionally designed and built this Ranger so that it would have capability. We wanted to make sure what we were bringing back to the marketplace could live up to the ‘Built Ford Tough’ promise.” .

Reuss' charge: Reposition GM Michael Wayland / December 17, 2018 DETROIT — As General Motors braces for a shifting industry landscape, its most difficult assignment may fall to Mark Reuss, the 55-year-old mechanical engineer and road racer who leads the company's far-flung Global Product Group. Reuss has launched a restructuring of his operations, a vast network with 32,000 employees that includes r&d, engineering, design, safety, quality and product planning. His charge is to focus significantly more resources on autonomous and electrified vehicles — particularly battery-electrics — while streamlining GM's army of engineers. The changes — effective Jan. 1 — include expanded duties for Reuss' top lieutenants as the company prepares to launch at least 20 battery-electric or fuel-cell-powered vehicles globally by 2023. The restructuring is meant to better align the company's "priorities and accelerate our EV and AV development," said GM spokesman Mike Albano. As with product czars across the industry, Reuss is working to keep traditional models updated while pivoting toward a new reality — in GM's case, an all-electric future with "zero crashes, zero emissions, zero congestion." He's also shifting GM's vehicle lineup away from cars to crossovers, SUVs and pickups to align with customer demand. "Reuss has got a challenge because consumers are still not buying into EVs yet," said Stephanie Brinley, principal automotive analyst at IHS Markit. "That's a balancing act a lot of companies are having to sort through right now." The product development overhaul is connected to a multibillion-dollar restructuring announced by CEO Mary Barra last month. The companywide makeover could lead to the elimination of roughly 14,000 employees, including 15 percent of the automaker's North American salaried work force. It could potentially lead to closure of as many as seven plants around the world, including five in North America. GM began head-count reductions last month for salaried contract workers after a voluntary buyout offer to 18,000 employees did not yield enough participants to hit the automaker's cost-cutting objectives. Broader cuts to the salaried work force are expected in January. The company has not provided specifics on the number of cuts, but it is expected to be in the thousands. The staff reductions will be followed by an end to production at three assembly plants and two powertrain facilities in North America throughout 2019 — potentially putting nearly 6,000 blue-collar workers in the U.S. and Canada on indefinite layoffs. Redesigning engineering The revamp of GM's Global Product Group includes more integration of the Global Propulsion Systems unit — the former GM Powertrain division — with other product group divisions. It also realigns priorities and responsibilities of senior leaders. At least five vice presidents — half of Reuss' direct reports — will get expanded responsibility for electric and autonomous vehicles. Dan Nicholson, global head of propulsion systems, will add oversight of electronic software and controls on all vehicles as well as responsibility for hardware development for EVs, including batteries and motors. The changes affect such established GM engineering executives as Al Oppenheiser, longtime lead engineer of the Chevrolet Camaro, who will become a chief engineer focused on electric products. Killing sedans Reuss, a 35-year GM veteran and son of former GM President Lloyd Reuss, is expected to focus on new or redesigned crossovers, SUVs and pickups ahead of the larger push for electrification that will follow the expected debut of a next-generation EV platform in 2021. The new EVs are planned to fill white space as the company ends production of six cars in 2019 — the Buick LaCrosse, Cadillac CT6, Cadillac XTS, Chevrolet Impala, Chevrolet Cruze and Chevrolet Volt — for the North American market. Those six have, on average, accounted for 46 percent of GM's U.S. car sales since 2012. But sales of the nameplates have been nearly cut in half during that same period. The LaCrosse and CT6 will continue in China, while Cruze production continues in Mexico, China and Brazil for sales outside North America. Production of the XTS in China is expected to end in the next year or so. Production in other markets could allow GM to import the vehicles in the event of a market shift back to cars. However, analysts don't believe GM would make such a move anytime soon. It's unclear whether GM plans to continue using the Volt's Voltec plug-in hybrid system with extended-range capabilities. GM had been expected to use the technology in other vehicles, including a small crossover. However, those plans may have changed after the automaker announced in September 2017 its vision for a zero-emission future. GM has faced outside pressure regarding its work force reduction and plan to shift focus to EVs. President Donald Trump last week said he doesn't believe the EV shift will succeed, and he asserted a new trade deal will make it harder for the company to move work out of the U.S. "They've changed the whole model of General Motors," he said in an interview with Fox News. "They've gone to all-electric. All-electric is not going to work. ... It's wonderful to have it as a percentage of your cars, but going into this model ... I think is a mistake." ----------------------------------------------------------------------- Reuss’ lieutenants General Motors is realigning responsibilities of senior leaders inside its Global Product Group to reflect new electrification duties. Among the changes: Dan Nicholson, VP of global propulsion systems, becomes VP of electrical controls, software and electronic hardware, overseeing software and controls on all vehicles. He’ll also be responsible for electric vehicle hardware development, including batteries and motors. Ken Kelzer, VP of global vehicle components and subsystems, becomes VP of global hardware components and subsystems. Jim Hentschel, VP of global product integrity, becomes VP of global integration and systems. Ken Morris, VP of global product programs, retains his title and adds propulsion responsibilities. Doug Park, VP of global electric and autonomous vehicles, retains his title and adds responsibilities for the emerging technologies. .

Let's be clear. York Corrugating only produced (stamped) the radiator shells for Mack. They did not chrome them. That was done by a third party.

KrAZ Trucks Press Release / December 7, 2018 The KrAZ-6510ТЕ Christmas Truck in National Colors An all-wheel-drive KrAZ model 6510ТЕ tractor was patriotically painted in Ukraine’s national colors to deliver the New Years’ Tree to the capital. The powerful KrAZ 6510 6x6 is engineered to tackle any severe service job assignment carrying oversize heavy loads both on and off road. . .

Indianapolis Star / December 13, 2018 Two-year-old Evan Brenneman burst into his parents' bedroom around 3 a.m. Thursday. "Thursday," he exclaimed. "Garbage truck." Thursday is garbage day, which means the big orange truck he's enamored by is going to stop at their Plainfield home, said his mother, Natalie Brenneman. But this week, Evan got a surprise when the orange truck stopped by: a backpack full of Ray's Trash Service swag and a hug from his favorite trash man, James Bullock. Evan has been fascinated by anything with wheels since he was about 9 months old, Brenneman said, but his interest in the trash truck grew last spring and summer. "We can hear it coming down the road, so he would run to the window and watch it," she said. Eventually, they were waiting outside every Thursday to greet the truck from the porch. Then, Evan wanted to meet the trash men. "One day, James popped out and said, 'Hey do you want to come see the truck?'" Brenneman said. Their friendship has continued to blossom. Evan has Prader-Willi Syndrome, a rare genetic disorder that tricks the body into believing it is constantly hungry. Ray's Trash Service has twice sponsored the family's annual walk to raise awareness and funding for PWS research, Brenneman said. And when Evan, who turns 3 next week, recently celebrated his birthday, Bullock's family joined in the festivities. "It was so funny, because Evan was just thrilled that he was there. He was his favorite party guest," Brenneman said. However, there was one downside. "He was disappointed that James did not bring the garbage truck with him to the party." It's been special to watch her son make a new friend, Brenneman said. "Oh my gosh, my heart bursts every time," she said. "... I know he’s in the middle of his work day and probably wants to get it done quickly, but he stops and talks to Evan. He always gets down on his level, looks him in the eye, gives him a hug, offers him a high-five." "It’s just so great that he pauses to talk with us and to spend a little time with Evan.” Video - https://www.indystar.com/story/news/2018/12/13/rays-trash-service-driver-surprises-2-year-old-backpack-full-gifts/2304320002/

Give the folks at Watt's Mack (BMT website provider) a call at 1-888-304-6225 and ask about a 4MF426AP4.

The DAF (Paccar) engine, as composed in DAF trucks in Europe (Euro 6 emissions), is a high-performing, reliable and durable engine. I can promise you that no DAF operators in Europe would disagree with me. The US operators I know are generally satisfied. They all note that Paccar charges a premium for Cummins power.

No Ted, you're thinking of Volvo's "Tandem Axle Lift". The one truck is a 6x4, and the other a 6x2 with a tag axle. These are nice trucks. You name it, you can get it. Drum, disc or wedge brakes. Steel spring or air spring. Tag or pusher auxiliary axles.

Iveco Trucks Australia Press Release / December 10, 2018 One of Australia’s leading concrete and construction materials company, Hanson, has taken delivery of the first of 82 ACCO 8x4 agitators, which will be deployed to sites across metropolitan Queensland, New South Wales, Victoria and Western Australia. The new trucks are part of a fleet rejuvenation program replacing older ACCO models along with several other brand trucks. Hanson’s National Procurement Manager, Neil McDermott, said the ACCO range is a proven performer in the industry and was selected because it provides several key performance benefits. “In terms of tare weight, what the ACCO offers is very attractive,” Neil said. “The lower the tare weight, the better it is from a fleet efficiency and business perspective.” All of the new trucks are fitted with 7.5 cubic metre bowls from Mixers Australia and ATT, and feature 340 hp engines, automatic transmission, front airbag suspension, rear rubber block suspension, and importantly for the application, Electronic Stability Control. Given the time-sensitive nature of concrete delivery, all vehicles are also equipped with Trimble tracking and dispatch software, which helps manage the product delivery cycle by automatically updating dispatchers on location and status of the vehicles in real-time. Neil said that aside from seeking efficiency, safety was another prime considering for Hanson and more broadly across the concrete industry. “It’s a high centre of gravity application and couple this with the fact that the mixing bowl is rotating – if not driven correctly, concrete trucks can be prone to instability,” he said. “A safety feature such as ESC isn’t a substitute for careful driving but it’s an important piece of technology that reduces the likelihood of a rollover.” The new ACCOs will remain in service for 13 to 14 years – the first eight years of their working life will be in a metropolitan environment, after which they’ll be relocated to regional and rural areas which are normally a little easier on the equipment thanks to less stop and start work and a reduced overall workload. Neil said it has been good for Hanson to re-establish a relationship with IVECO, after several years of purchasing competitor products. “We bought solely IVECO for many years before making a change to try some other products,” he said. “Hanson had been keen to use ACCOs again and to build on our earlier partnership. We are also pleased to be supporting Australian manufacturing and boosting local employment through this latest purchase.” As ACCOs are a familiar vehicle on the Hanson fleet, the company’s drivers have responded well to the latest model, according to Neil. “Our drivers comment favourably; with the front airbag suspension they’re a comfortable truck, are easy to get in and out of, and the cab over configuration provides excellent visibility and manoeuvrability on the work site,” he said. The first batch of the new ACCOs is already operating, with the remainder expected to be delivered within the first quarter of 2019. Depending on where they’re located, the trucks will be maintained by IVECO Dealerships, Hanson’s in-house technicians or mobile mechanical contractors. .

Isuzu Trucks Australia / December 4, 2018 The Isuzu NPS is the original light truck 4x4. With 2-pedal AMT the bar has been lifted and emergency services, mining and exploration applications are even better served by Australia's number one truck - Isuzu. .