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Sean Kilcarr, Fleet Owner / October 26, 2016 There’s no doubt a tremendous number of “big ticket” regulations coming together to hammer the trucking industry in some truly enormous ways: the electronic logging device (ELD) mandate; speed limiting devices; the now-official Phase 2 greenhouse gas (GHG) rules that will further increase equipment costs. In sum, the regulatory to-do list is long and simply poised to get longer. So how will all of the rules – existing and soon-to-be-implemented alike – ultimately re-order trucking and the freight world as a whole? John Larkin, head of the transportation & logistics equity research group at Stifel Capital Markets, recently offered some thoughts on that impending “re-ordering” and in his view at least there’s at least one thin silver lining amid what could be some significant motor carrier carnage – the ability to get better freight rates. “Sometime between the second quarter of 2017 and the second quarter of 2018 we think there will be a return to the environment that we saw in 2014 where there was more freight than there are trucks,” he explained at the Surface Transportation Summit earlier this month. “The spot market will go from being awful to being quite attractive, [while] contract rates will start to move up as high as mid-single digit rates.” Larkin added that one reason many shippers adopted what he called a “Neanderthal pricing mentality” earlier this year is they think this is sort of their “last shot to get a bite at the apple” to push rates down. “Maybe they take another little bite in the first quarter of next year but that may be their last chance,” he stressed. “From that point forward capacity will be taken out by ELDs, fleet downsizing, fleet failures, people coming out of the industry and then the next litany of regulations including speed limiters, the safety fitness determination [rule], drug testing methodology, and sleep apnea testing,” Larkin emphasized. “As all of those regulations are going to have the same net effect: reducing truck supply.” Make no mistake, however: those three words, “reducing truck supply,” will encompass a huge amount of pain for this industry to endure. Lots of truck drivers are going to leave the industry; many potential recruits will say “no thanks” to careers as truck drivers due to the ever-increasing hassles; and trucking firms will close their doors in the face of regulatory compliance costs. It won’t be pretty. “The big constraint on truckload capacity is drivers; even though we have a soft economy [they] are still very difficult to find,” Larkin noted. “It’s tough to find those people who are willing to sacrifice their lifestyle to be out on the road,” he added. “And I’m not sure what changes that, especially in a world where in order to micromanage the cost structure of [trucking] operations we’re telling the driver to stay in the right hand lane on a specified route, to drive 63 miles per hour and to take his 30 minute rest at this particular rest area and to take on 50 gallons of fuel at this particular truck stop and to deliver the freight within this 15-minute window at that shipper.” In Larkin’s view, there’s “virtually no autonomy left” and “very few red-blooded men and women” want told what to do every minute of the day while living in a little metal box hurtling down the highway at 63 mph. “That’s the constraint,” he explained. So instead, as truck pricing fell apart this year, fleets are downsizing in an effort to keep truck utilization up while cutting costs. Larkin also feels that as the ELD mandate hits on Dec. 1 next year, other motor carriers may simply call it day and close up shop – though that’s not necessarily a bad thing, in some ways, especially for those cutting lots of corners where safety is concerned. “As we get into next year when the ELD mandate gets closer you should see more and more companies adopting them, which will eliminate the cheating that goes on currently with the manual [paper] logs,” he explained. “That should tighten things up as well.” Larkin believes about roughly 50% of the trucking industry has ELDs to make the math easy, while the other 50% does not. Many of those still using paper logs are doing do now primarily to cheat, he thinks, running in a 600 to 750 mile length of haul range that’s completed in one day, “which of course you cannot do legally with a solo driver,” he emphasized. Thus when those fleets convert over to the ELDs, Larkin predicts their productivity will drop by 6% to 10%. “And if 50% of the industry is down 6% to 10% that implies 3% to 5% of capacity coming out of the [trucking] industry.” That also assumes that all of the small carriers who take this “productivity hit” are going to be able to survive, he pointed out; which Larkin doesn’t think will be the case. “We think quite a few of them are going to hang up their cleats and call it a day and just exit the industry,” he said. “So it could be worse than a 3% to 5% loss of capacity when all is said and done and the dust settles.” That’s big, painful change, no doubt. But if fleets can make the transition to ELDs and comply without too much trouble with the other regulations being placed on the books, they may very well end up with some serious rate negotiating leverage. We’ll see if that happens as predicted.

Jacobs releases engine brake system for the 2017 X15 Fleet Owner / October 26, 2016 Jacobs Vehicle Systems announced the introduction of the optimized engine brake for the 2017 Cummins X15 engine. “The 2017 X15 capitalizes on the optimization of the VGT and the braking cam to deliver approximately ten percent additional braking power at engine speeds under 1700 RPM, compared to that of the 2010 ISX15,” the company said. “At a typical engine speed of 1500 RPM, drivers can now rely on 450 HP of braking power to provide confidence and driver control while in traffic or descending a hill. Wıth a simple downshift to increase the engine speed, the engine brake in the X15 Performance Series will deliver a retarding force of up to 600HP of braking at 2100RPM. The X15 braking performance continues to be best-in-class for heavy duty engines in North America.” “Cummins was Jacobs’ first engine brake customer in 1961. Over 55 years later, we continue to innovate through collaboration among our engineering teams using all engine systems available to maximize engine braking,” said Steve Ernest, vice president, Engineering and Business Development. “When the pioneers and global leaders of engine brakes combine efforts with world-class diesel engine designers, we drive constant innovation and evolution of technologies that deliver performance and value to the customer. With the Cummins X15, equipped with an integrated Jacobs Engine Brake, truckers will experience safer travel and the improved comfort they demand, while reducing the wear of foundation brakes, downtime and service costs.”

Up close: Navistar CatalIST SuperTruck Fleet Owner / October 26, 2016 What could be cooler than the SuperTruck concept vehicles that have been built by North American OEMs with research funding from U.S. Dept. of Energy? Taking one out for a spin, that’s what. And Navistar let Fleet Owner do just that earlier this month when the newly unveiled CatalIST was on hand during a product demonstration day at the company’s 700-acre test facility here. Powered by the Navistar N13 engine, the CatalIST’s refined aerodynamics, use of lighter-weight materials, and technologies such as predictive cruise deliver fuel efficiency of better than 13 miles per gallon. Slide Show - http://fleetowner.com/equipment/close-navistar-catalist-supertruck#slide-0-field_images-204171 “We’ve literally designed this vehicle from the back forward, because there is a fundamental principle in aerodynamic design that says until you clean up the back of the truck and the trailer, you’re going to be limited by what you do in the front,” explained Navistar’s Dean Opperman, chief engineer, advanced vehicle technologies. “Fundamentally, the design of the trailer and tractor impact each other. We worked directly with Wabash National, and were able to optimize our design around their specific technologies—and we will continue to do that with all different types of trailer aerodynamics technologies,” Opperman said. “In a perfect world, we would like to be in control of both systems, but that’s never going to happen. But once we knew where we were going, it solidified a lot of things we wanted to do up front.” Among the special touches on the CalalIST trailer by Wabash National, for instance, are the skirt design, the “ball and socket” passive gap treatment, a bogie treatment on the tandem axles, and an extended boat tail design, Opperman pointed out. Most significantly, the overall shape of the trailer is the key to developing a more optimum, wing-like airflow by lowering the front and rear of the vehicle. As the CatalIST reaches highway speed and “changes shape,” the load bias also shifts forward more toward the tag axle and the low-rolling resistance single tires. Because of the improved aerodynamics and reduced rolling resistance, the CatalIST needs only about 80 h.p. to cruise at 65 m.p.h., Opperman noted. The laptop displays telematics data from the various systems, including engine speed and downspeeding performance, horsepower in use, hybrid charging and discharge, solar power input from the trailer roof, and the vehicle height controls down to the axle and the corresponding load bias. For the SuperTruck program, Wabash National likewise leveraged some existing advanced designs and materials to improve fuel efficiency. In order to give the tractor-trailer the airfoil shape without exceeding height limits, the project trailer utilized smaller wheels and tires as well as the hydraulic control mechanism. The CatalIST trailer’s skirt is based on the new Wabash Ventix DRS (Drag Reduction System), in which segmented side panels manage air flow across the entire underbody. Navistar continues to refine, searching for the ideal aerodynamic shape for a working heavy-duty commercial vehicle. Among the aero touches, a camera system replaces and improves upon traditional mirrors. A new LED headlamp system reduces lamp size for a more aerodynamic shape and cuts electrical power requirements by greater than 80 percent. Along with the tight gap, the tractor and trailer fairings are mutually optimized, using computational fluid dynamics, to minimize drag. A polycarbonate windshield allows for "a more aggressive curvature" that, in turn, better manages the airflow around the cab, Opperman noted. Combined with the camera system that replaces mirrors, the result is a significant reduction in noise and buffeting at highway speeds. Low rolling resistance tires and aero wheel covers are also part of the package. If the sun is just right, you might notice that the CalalIST is based on the International ProStar. But the CatalIST project is aimed squarely at Navistar International's future products. .

Heavy Duty Trucking / October 26, 2016 Used Class 8 same-dealer truck sales fell sharply in September, reversing a growth trend that started in February. Truck sales dropped 11% compared with the previous month. The average price of used Class 8 trucks increased 1% over the same period. Industry analysts believe that prices will remain steadily lower in the long term. The used truck market saw a late summer surge through August with strong sales across all market segments. However, September’s numbers suggest the boom in used truck sales may be over for now. “All three market segments posted weaker volumes, with declines across all three time comparisons,” said one analyst. “The retail market segment fared the best, marking only a 1% decline month-over-month, while the auction and wholesale markets took the biggest hits, falling 45% and 25% month-over-month, respectively."

EPA scrutiny bogs down new diesels Automotive News / October 24, 2016 The EPA's crack-down on emissions malfeasance has thrown the U.S. diesel vehicle market into disarray. With the 2017 model year well underway, Jaguar is the only brand selling 2017 diesel light vehicles in the U.S. That compares with nine brands offering 20 models in the previous model year, including many from Audi, Volkswagen and Porsche, which are now sidelined from the diesel market altogether. Later this year, BMW will join Jaguar, having received a green light from the EPA over the summer. But for now, those are the only two automakers cleared to sell 2017 diesels, an EPA spokesman said. Other automakers' plans remain in limbo as the EPA continues the rigorous diesel testing regime it implemented in response to VW's emissions violations, highlighting a lingering effect of the cheating scandal on the rest of the industry. Since last October, the EPA has subjected diesels to a new battery of tests designed to root out the type of cheating uncovered at VW. To deter automakers from trying to game the tests, EPA officials have said little publicly about the enhanced testing, saying only that vehicles would be kept longer and tested in unpredictable ways. "It is true that diesel vehicles are getting extra scrutiny and that has extended the certification process longer than normal," EPA spokes-man Nick Conger said. "In general, manufacturers have been supportive of this additional testing and have adjusted their timing to account for the additional test duration." The new testing has uncovered no evidence of emissions manipulation thus far, but the effects have been felt throughout the industry, beginning with delayed launches last year of the 2016 Chevrolet Colorado and GMC Canyon diesel pickups and the diesel 2016 BMW X5. GM is now awaiting approval for the 2017 Colorado and Canyon. GM, which also has a Cruze diesel due next year, says it's still building 2016 diesel pickups. Jeep and Ram stores have gasoline-powered 2017 Grand Cherokees and Ram 1500s in stock, but no diesels, even though both models were offered with Fiat Chrysler's 3.0-liter EcoDiesel engine for 2016 and press materials indicate the engines would be offered for 2017. An FCA spokesman refused to comment. FCA's online inventory trackers show several thousand unsold 2016 EcoDiesel Ram 1500s available nationwide, as well as hundreds of the less popular Grand Cherokee diesels. BMW delayed the start of production for its 2017 diesel 3-series sedan and X3 and X5 crossovers pending testing by the EPA and the California Air Resources Board. The 3-series and X3 diesels are on track to arrive by year end and the X5 diesel arrives in January. Mercedes-Benz is now delaying plans to offer four diesel models in the U.S.: a C-class sedan as well as GLC, GLE and GLS utility vehicles. "Numerous authorities are currently testing diesel engine vehicles for compliance with emission standards," says Mercedes spokesman Robert Moran. "Of course, this process has a considerable impact on new diesel certification projects both in terms of effort and duration." For now, Mercedes' priority is securing EPA certification for the V-6 diesel in the GLS350d, Moran wrote, refusing to provide a launch date. He also refused to say whether Mercedes still intends to offer diesel versions of the GLE or GLC in the U.S., as Mercedes executives had said would happen. It still sells the 2016 GLE300d in the U.S., but dealerhip supplies are dwindling. But Moran confirmed that Mercedes has abandoned plans to offer a diesel C class next year in the U.S., citing "product strategy reasons." Even that timing represented a delay: the C300d was supposed to arrive the first quarter of this year.

Light-Duty Diesel Engines Slow to Return to Showrooms in Wake of Emissions Scandal Edmunds / October 26, 2016 A federal judge may have approved a $14.7 billion court settlement relating to the Volkswagen diesel-emissions cheating scandal, but that doesn't signify that sales of light-duty diesel cars and SUVs are poised to return to pre-crisis levels. On the eve of the settlement, Automotive News pointed out that Jaguar is the only brand with 2017 diesel engines certified and ready to sell. A quick check of inventory on Edmunds.com confirmed that diesel-powered 2017 Jaguar XE and XF sedans are indeed ready and waiting for buyers. But that's it. Audi and Porsche have deep corporate ties to Volkswagen, so it's no surprise that their diesel offerings are in deep limbo. But that doesn't explain the absence of the Ram 1500 EcoDiesel, Jeep Grand Cherokee EcoDiesel or BMW's 3 Series, X3 and X5 diesels. Detailed 2017 pricing has been published, but they are not for sale and diesel fuel economy data is conspicuously absent from fueleconomy.gov. The picture is even murkier for the Range Rover diesel and the Mercedes GLE and E-Class diesels, none of which appear in 2017 order guides. The same is true of the Chevrolet Cruze and the Chevrolet Colorado/GMC Canyon diesels. The issue swirls around emissions approval. Diesel engines emit much more oxides of nitrogen (NOx) than gasoline ones, and the demanding emissions regulations in the U.S. cut light-duty diesels no slack. A secondary exhaust catalyst and a diesel exhaust fluid (DEF) injection system are necessary to take care of the extra NOx. Volkswagen decided it could literally drive around the requirement by burying cheat codes in its diesel engine control software. The test patterns used in lab testing are very strictly defined, and that made it possible for someone to craft software that would only turn on the NOx control system when someone dressed in a lab coat was looking. No one expected such a brazen tactic from a major auto manufacturer, and the EPA knows it can't let this happen again. According to Automotive News, "EPA officials have said little publicly about the enhanced testing, saying only that vehicles would be kept longer and tested in unpredictable ways." At a minimum, the EPA is running its own dyno tests and subjecting manufacturer-reported results to greater scrutiny. And it's likely officials are strapping Portable Emissions Measuring (PEM) devices to test vehicles and driving them on actual roads to ensure the lab tests match. All of this (and surely more) is slowing down the certification of 2017 light-duty diesel cars, pickups and SUVs. This seems like a temporary setback, at least technically. But the resilience of customer demand is harder to judge. Light-duty diesels still have a place in the market — particularly the light-pickup and SUV segments that value torque and towing. But those who bought a diesel-powered car for fuel economy alone will likely be tempted by hybrid offerings instead. And since the biggest player may not soon re-enter the segment, it's likely that the peak days of the diesel sedan are behind us.

Six NATO nations eager to increase Black Sea presence RT / September 26, 2016 US, Turkey and Poland are among the NATO member states which confirmed their readiness to dispatch naval units to the Black Sea in 2017, boosting the alliance’s presence in the region, according to NATO Secretary General Jens Stoltenberg. Stoltenberg noted “progress” in strengthening NATO’s presence in the Black Sea Region in his statement after the meeting of the block’s defense ministers in Brussels on Wednesday. “With a Romania-led multi-national framework brigade on land and we’re working on measures in the air and at sea,” he said. According to the secretary General, several member-states “indicated their willingness to contribute to our presence in the Black Sea region on land, at sea and in the air, including Canada, Germany, the Netherlands, Poland, Turkey and the US.” “Other allies are also looking into how they can contribute,” he added. The plans on enhancing Black Sea presence will be finalized during another meeting on NATO ministers in February. Following Crimea’s reunification with Russia, NATO has been increasingly concerned about the Black Sea is turning into a “Russian lake.” Since the spring of 2014, NATO warships, including missile cruisers from the US and other allied nations, have been patrolling the Black Sea on a rotational basis, never leaving the area unattended. NATO decided to increase their presence in the Black Sea during a summit in Warsaw in July, calling it a response to Russia’s increasing military capabilities and is a gesture of support to its Eastern European members. READ MORE: Lithuania aims to spend $115m on air-defense system amid NATO build-up in Eastern Europe The military beef-up in the region is expected lead to the creation of NATO’s Black Sea Fleet to be formed by member-states with direct access to the sea. Stoltenberg also said that 17 NATO countries will delegate their units to join the four multinational ground battalions to be deployed in Poland and the Baltic State early next year. The battalions will be led by the US, UK, Canada and Germany, while the countries sending their forces included France, Poland, Albania, Romania, Croatia and others. The Secretary General stressed that NATO was monitoring the movement of Russian vessels in the Baltic Sea. "I can confirm that two Russian warships have recently entered the Baltic Sea, and NATO is monitoring this movement in the way we always do," he said. However, Stoltenberg stressed that, despite its buildup in Eastern Europe, the alliance is ready for dialogue with Moscow. "We are concerned about Russia's behavior. Bur dialogue is even more important when tensions run high. And allies stand ready to hold an ambassadorial meeting of the NATO-Russia Council in the near future," he said.

Britain, U.S. sending planes, troops to deter Russia in the east Reuters / October 26, 2016 Britain said on Wednesday it will send fighter jets [see note] to Romania next year and the United States promised troops, tanks and artillery to Poland in NATO's biggest military build-up on Russia's borders since the Cold War. Note: Britain has around 126 Eurofighter Typhoons in operation, but only 40 are available for immediate use. 32 of those are based in the UK for domestic defence, 4 are patrolling the Falklands, and 4 are supporting NATO's air-policing mission over the Baltic states of Estonia, Latvia and Lithuania. Germany, Canada and other NATO allies also pledged forces at a defense ministers meeting in Brussels on the same day two Russian warships armed with cruise missiles entered the Baltic Sea between Sweden and Denmark, underscoring East-West tensions. In Madrid, the foreign ministry said Russia had withdrawn a request to refuel three warships in Spain's North African enclave of Ceuta after NATO allies said they could be used to target civilians in Syria. The ships were part of an eight-ship carrier battle group - including Russia's sole aircraft carrier Admiral Kuznetsov - that is expected to join around 10 other Russian vessels already off the Syrian coast, diplomats said. NATO Secretary-General Jens Stoltenberg said the troop contributions to a new 4,000-strong force in the Baltics and eastern Europe were a measured response to what the alliance believes are some 330,000 Russian troops stationed on Russia's western flank near Moscow. "This month alone, Russia has deployed nuclear-capable Iskander missiles to Kaliningrad and suspended a weapons-grade plutonium agreement with the United States," Stoltenberg said, also accusing Russia of continued support for rebels in Ukraine. Those ballistic missiles can hit targets across Poland and the Baltics, although NATO officials declined to say if Russia had moved nuclear warheads to Kaliningrad. NATO's aim is to make good on a July promise by NATO leaders to deter Russia in Europe's ex-Soviet states, after Moscow orchestrated the annexation of the Crimea peninsula in 2014. NATO's plan is to set up four battle groups with a total of some 4,000 troops from early next year, backed by a 40,000-strong rapid-reaction force, and if need be, follow-on forces. As part of that, U.S. Secretary of Defense Ash Carter announced a "battle-ready battalion task force" of about 900 soldiers would be sent to eastern Poland, as well as another, separate force equipped with tanks and other heavy equipment to move across eastern Europe. "It's a major sign of the U.S. commitment to strengthening deterrence here," Carter said. Britain's Defence Secretary Michael Fallon said Britain would send an 800-strong battalion to Estonia, supported by French and Danish troops, starting from May. The United States wants its troops in position by June. London is also sending Typhoon fighter aircraft to Romania to patrol around the Black Sea, partly in support of Turkey. "Although we are leaving the European Union, we will be doing more to help secure the eastern and southern flanks of NATO," Fallon said. SYRIAN SHADOW Others NATO allies joined the four battle groups led by the United States, Germany, Britain and Canada to go to Poland, Lithuania, Estonia and Latvia. Canada said it was sending 450 troops to Latvia, joined by 140 military personnel from Italy. Germany said it was sending between 400 and 600 troops to Lithuania, with additional forces from the Netherlands, Norway, Belgium, Croatia and Luxembourg. Stoltenberg said allies' commitments would be "a clear demonstration of our transatlantic bond." Diplomats said it would also send a message to Republican presidential nominee Donald Trump, who has complained that European allies do not pay their way in the alliance. For the Kremlin, the U.S.-led alliance's plans are already too much given Russia's grievances at NATO's expansion eastwards, although Stoltenberg denied going too far. But NATO's troop announcements in the Baltic states and Poland were partly overshadowed by the dispute about whether Spain should refuel the Russian warships, which was later resolved by Moscow's decision to withdraw its request. NATO's tensions with Russia have been building since Crimea and the West's decision to impose retaliatory sanctions. But the breakdown of a U.S-Russia brokered ceasefire in Syria on Oct. 3, followed by U.S. accusations that Russia has used cyber attacks to disrupt the presidential election, have signaled a worsening of ties. Even before the break down of the Syrian ceasefire, Russian President Vladimir Putin suspended a treaty with Washington on cleaning up weapons-grade plutonium, signaling he was willing to use nuclear disarmament as a new bargaining chip in disputes with the United States over Ukraine and Syria.

“It's amazing how people can get themselves in these situations when, if you stop and think about it, you'll see that basically, you guys are not that far apart on this thing.” Jack Moniker (Robin Williams), “Club Paradise” ------------------------------------------------------------------------------------------- Things are getting out of hand. With the accidental movement of a nervous young man’s trigger finger, the world as we know it could be radically transformed.......in a very bad way. I, personally, want to continue enjoying my morning cup of coffee. Life’s too short for all this nonsense. We only have one life. We are but “guests” on this 4.5 billion-year-old planet for 70-90 some years. ISIS was a chance for the west to forge a working relationship with Russia (Putin). We’ll never agree on all issues. We can’t come close to doing that among ourselves. The world is a much smaller place than before. We must to learn to co-exist. ISIS, and the greater radical Islamic threat (e.g. September 11, London, Paris), is a common foe of the west and Russia. It’s a shame we couldn’t put aside our long time hang-ups and work with Russia in annihilating ISIS, instead of an apparently unsuccessful approach of arming numerous factions who often allied with........ISIS. In Syria, Obama talked of a red line and demanded that Putin allow the U.S. to have a try first. After two years of nothing, having allowed Obama to go first, Putin then sent in his air force. After blowing up ISIS oil tankers headed to Turkey (our ally?) and ISIS targets, Obama then out of embarrassment ordered similar attacks. In America, Detroit is more dangerous than Syria at night......and yet we do nothing about that. Based on our cues overseas, why hasn’t our government requested that NATO send troops from member states to Detroit, or have the United Nations send peacekeepers? If we applied as much time, money and effort on our issues here at home as we do overseas, ...................................

Pentagon suspends California National Guard bonus repayments Associated Press / October 26, 2016 The Pentagon worked Wednesday to stave off a public relations nightmare, suspending efforts to force California National Guard troops who served in Iraq and Afghanistan to repay their enlistment bonuses that may have been improperly awarded. Defense Secretary Ash Carter ordered the suspension in the wake of angry reaction from congressional Republicans and Democrats. They demanded he relieve the burden on Guard members following news reports that soldiers were asked to repay bonuses that in some cases totaled more than $25,000. The announcement does not end the reimbursement process, but postpones collection efforts while the Pentagon and Congress look for a long-term solution. White House spokesman Josh Earnest said President Barack Obama was pleased with the decision, but said it was important for the Pentagon "to follow through" by finding a long-term solution. Obama had warned the Defense Department earlier this week not to "nickel and dime" service members who were victims of wrongdoing by overzealous recruiters. In a statement issued during a meeting of defense ministers in Brussels, Carter said efforts to collect reimbursement from Guard members should stop "as soon as is practical." Carter said he has ordered the department to set up a streamlined process by Jan. 1 to help troops get relief from the repayment obligation, because the current program has moved too slowly. Acting Under Secretary of Defense for Personnel and Readiness Peter Levine told reporters Wednesday that the process of identifying and processing the California Guard members who might have to repay the money may take up to 10 days. "If we determine that recoupment was unjustified, there will be a process that allows the recovery of that and the reversal of that money," Levine said. Levine said they are looking to set up "a one-stop place" for those affected to get a hearing and review, noting that the goal is to eliminate "a bunch of sequential processes." The details of that process have yet to be determined, he said. Among about 14,000 California Guard members whose bonuses and other incentive payments were reviewed, about 3,000 of those are men and women have since left the National Guard, Levine said. They will be eligible for repayment as well, but it hasn't been determined how those cases will be handled since they do not have current addresses or contact details for many of those individuals, he added. Senate Armed Services Committee Chairman John McCain said the move by the Defense Department is "a long-overdue first step," and he vowed to work with Senate colleagues "to explore all options available to hold those responsible for this unacceptable situation accountable and to ensure this never happens again." Rep. Jeff Miller, chairman of the House Committee on Veterans' Affairs, called the measure "a weak and ham-handed attempt to shift the focus away from the Obama administration's shameful treatment of service members and veterans." "Carter seems to have no plan to make those who've already been forced to pay back their bonuses whole, and by focusing only on the California Guard, he is ignoring what media reports indicate could be a national problem," Miller said. The Los Angeles Times reported over the weekend that the Pentagon demanded that thousands of soldiers repay their enlistment bonuses after audits revealed overpayments by the California National Guard. Recruiters under pressure to fill ranks and hit enlistment goals at the height of the two wars improperly offered bonuses of $15,000 or more to soldiers who re-enlisted. If soldiers refuse to pay the bonus back, they could face interest charges, wage garnishments and tax liens. "While some soldiers knew or should have known they were ineligible for benefits they were claiming, many others did not," Carter said, adding that the new process will put "as little burden as possible on any soldier who received an improper payment through no fault of his or her own. At the same time, it will respect our important obligation to the taxpayer." But the country's largest combat veteran's organization, said the measure "doesn't go deep enough." Brian Duffy, national commander of the Veterans of Foreign Wars of the United States and its Auxiliary, said the erroneous bonuses were "the fault of a system, not of any recipient." As many as 6,500 California National Guard soldiers have been asked to repay the enlistment bonuses. "We deal with these problems all the time, but we deal with it in ones and twos, not in hundreds and thousands," said Gordon Trowbridge, deputy Pentagon press secretary. The Pentagon said it is investigating cases beyond California, but said those will likely add up to "dozens." House Speaker Paul Ryan, R-Wis., who had pressed the Pentagon to suspend the program, said Wednesday, "I'm glad the Pentagon came to its senses." House Majority Leader Kevin McCarthy, R-Calif., also welcomed the development, saying he spoke with Deputy Defense Secretary Robert Work Tuesday night and vowed to work with other members of Congress to provide a legislative solution so the repayment issue does not recur. House Minority Leader Nancy Pelosi, D-Calif., welcomed the Pentagon announcement, but said lawmakers need to find a permanent solution. "The heroes who served our country in uniform deserve every bonus and benefit they received in good faith," she said. "We all must work together to swiftly address this situation and monitor any additional issues that come up in California and other states."

If you kill two people, you “could” face the death penalty. Could ??? And then, the killer remains on “death row”, at the taxpayer’s expense, for years until his appeals are exhausted, or a slick lawyer is able to reduce his penalty on a technicality to life in prison, pointlessly costing taxpayers even more. ---------------------------------------------------------------------------------- Oklahoma Double Murder Suspect Has Hit List, May Be Headed to Nevada ABC News / October 26, 2016 A 38-year-old Oklahoma man who has evaded police for two days after killing two people and shooting four others -- including two police officers -- has a hit list and may intend to kill up to eight more people, authorities said Tuesday. "This is a man who has indicated a total propensity to kill people, to injure people, shoot people," said Oklahoma County Sheriff John Whetsel. "He has no care for human life whatsoever." Authorities believe he may be headed to Nevada and have notified police there to be on the lookout. Oklahoma County Sheriff John Whetsel said the suspect, Michael Vance, “could” face the death penalty if convicted of the crimes. Whetsel is warning citizens to stay clear if they spot Vance, adding that he has "absolutely nothing to lose." Vance's rampage began Sunday evening, when he allegedly shot two police officers responding to the scene at a mobile home park over reports of shots fired in the area. The two officers sustained non-life-threatening injuries, officials say, and were temporarily disabled as Vance fled the scene in their patrol car. One officer was shot in the foot and another was hit by gunfire in both legs. Investigators believe Vance live-streamed two videos while on the run, one from inside the police cruiser and another while inside another vehicle. In one of the videos, Vance appears in a blood-covered shirt and says he's been shot before showing a rifle on the seat next to him. "Letting y'all know, look, this is real," he says in the video, according to the Associated Press. "If you want to know what's up next, stay tuned to your local news." Vance said things were "going to be intense," according to an affidavit released on Monday night. He then proceeded to a mobile home park, where police discovered the bodies of two of his relatives. Officials identified those victims as 55-year-old Ronald Everett Wilkson and 54-year-old Valerie Kay Wilkson, his wife. The affidavit describes wounds consistent with attempts to sever one victim's head and the other's arm. Vance then allegedly "shot at and injured" a woman as he was in the process of stealing her silver 2007 Mitsubishi Eclipse. Vance is also suspected of shooting a man during an attempted carjacking early Monday. Vance was last known to be driving a 2007 Mitsubishi Eclipse and was armed with an AK-47. He is considered to be armed and extremely dangerous, authorities say. Sheriff Whetsel instructed any potential witnesses not to approach Vance but to call 911 and let the police handle the situation. ------------------------------------------------------------------------------------------------------------------------- Associated Press / October 31, 2016 A fierce gun battle with Oklahoma state troopers left a homicide suspect dead and ended a weeklong manhunt for the man responsible for a string of violent crimes across the state, including the killing of two relatives and the shooting of three law enforcement officers. After a tip from a farmer led authorities on Sunday to a camp site near Hammon in far western Oklahoma, the manhunt intensified for Michael Dale Vance Jr. Several troopers were chasing Vance, who was driving a stolen flatbed pickup truck, when the vehicle went off the road near Leedey, 130 miles northwest of Oklahoma City. "He exited the vehicle and engaged our troopers in a pretty fierce gun battle," Oklahoma Highway Patrol Capt. Paul Timmons said. "It's probably safe to say he (Vance) was hit more than once." Vance was pronounced dead at the scene. Earlier Sunday, Vance shot and wounded Dewey County Sheriff Clay Sander after Sander stopped a pickup truck to warn the driver about a chain dragging behind it. "The driver of the truck stopped and exited the vehicle shooting an assault rifle," said Oklahoma State Bureau of Investigation spokeswoman Jessica Brown. "The sheriff was shot in the shoulder and arm as he returned fire." Oklahoma Highway Patrol air units in the area were able to spot the vehicle, and a chase ensued. Authorities were tipped off to Vance's whereabouts by a farmer who spotted a vehicle in his field that matched the description of the car the fugitive was thought to be driving. "The vehicle was covered with brush and tumbleweeds," Timmons said. "It appears that he had been camped out there for some time." Also on Monday, authorities charged three acquaintances of Vance, 34-year-old Danny Roach of Oklahoma City, 36-year-old April Harden, and 33-year-old Reginald Moore, with aiding Vance after he had shot and wounded two Wellston police officers and killed two relatives. Roach provided Vance with bandages, an assault rifle and ammunition last week after Vance came to his home in Oklahoma City. Roach admitted he was aware that Vance had just been in a shootout with law enforcement, and he also knew that Vance had just killed two people. All three were charged Monday with two counts of accessory to felony murder after the fact, and Roach was charged with two counts of possession of a firearm after a felony conviction. Roach and Moore each also face two counts of shooting with intent to kill because they provided the weapon Vance used in the shooting of the Dewey County sheriff and of a man near Sayre during an attempted carjacking. .

Clinton and Trump announce reconciliation.......joint rule proposed. .

BBC / October 26, 2016 Philippines president Rodrigo Duterte has said he wants US troops to leave the country. Speaking while on a state visit to Japan, he also called for an "independent foreign policy". Under a current defence pact, the US maintains troops at five military bases in the Philippines. "I want, maybe in the next two years, my country free of the presence of foreign military troops. I want them out," Duterte said on Wednesday. "I want them out," he said. "And if I have to revise or abrogate agreements, executive agreements, I will." He reiterated the possibility of cancelling current agreements with the US, as well as his desire to be "closer to China". "If you chastise me, reprimand me before the international crowd and you say: 'Mr. Duterte, you stop the killings there... stop it because we will withhold aid and assistance to your country' -- it's like saying, 'I am a dog on a leash, and if you do not stop biting the criminals, we will not throw the bread right under your mouth, we will throw it further so you'll have to struggle to get it.' "That's what America wants me to be, a dog barking for the crumbs of their favor." "I do not want to see any military man of any other nation (in the Philippines), except the Filipino soldier," he said.

You'all can knock Biden, but I think he came across pretty good here. A car guy, he can't be all that bad. .

The health care and pharmaceutical industries in the United States has been a blatant scam for decades. With multiple levels and angles, it may rank as the largest scam in existence. In order to purchase medicine, why are you required to waste time and money seeing a doctor at a costs of some $100 in order to obtain a "prescription" for medicine that is sold over the counter in other countries? Why are you paying $50 for medicine sold in other countries for $5 ?

Sluggish truck sales hit Daimler bottom line Commercial Carrier Journal (CCJ) / October 25, 2016 Daimler Trucks sold 97,100 vehicles in the third quarter of this year compared to 128,500 globally for the same quarter last year. In the company’s earnings report last week Daimler said the decrease is the result of lower demand for trucks in many of its key markets. “In the NAFTA region, unit sales by Daimler Trucks decreased to 31,400 units in a declining market (compared to 52,200 during Q3 last year). At the same time, the division succeeded in further extending its market leadership in Classes 6-8, taking 39.3 percent of the market ( compared to 38.1 percent last year).” The division’s revenue decreased from $10.53 billion to $8.53 billion. Negative effects on the division’s earnings primarily resulted from lower unit sales in the NAFTA region, Turkey and the Middle East, the company said. Earnings were also reduced by intense competition in Europe. The realization of further efficiency improvements and exchange-rate effects had positive effects on earnings. EBIT also includes expenses for workforce adjustments in the context of ongoing optimization programs in Brazil. Demand for medium- and heavy-duty trucks in the regions important for Daimler should be perceptibly below the prior-year volume, the company noted. A major negative factor is the expected significant market contraction in North America. In a comparatively weak overall investment environment, from today’s perspective, demand in the market for Classes 6­8 trucks can be expected to decrease by approximately 15 percent. Thanks to strength in Daimler’s car and van business, Daimler sold 754,100 cars and commercial vehicles worldwide during Q3, more than ever before in a third quarter and surpassing the total for the prior-year period by 5 percent.

Paccar profits, sales slide in third quarter while marketshare soars Commercial Carrier Journal (CCJ) / October 25, 2016 Paccar reported earnings of $346.2 million Tuesday for the third quarter of 2016 compared to $431.2 million in the third quarter of 2015. Third quarter net sales and financial services revenues were $4.25 billion this year compared to $4.85 billion for the same period last year. Peterbilt and Kenworth’s record third quarter U.S. and Canada Class 8 retail sales market share of 31 percent increased their year-to-date market share to 27.9 percent. Class 8 truck industry retail sales for the U.S. and Canada are expected to be in a range of 215,000-225,000 vehicles in 2016 and Class 8 truck industry retail sales for the U.S. and Canada are estimated to be in the range of 200,000-230,000 vehicles in 2017. Paccar Parts generated pre-tax profit of $138.3 million in the third quarter of 2016, compared to $145.4 million achieved in the third quarter of 2015. Third quarter 2016 revenues were $764.8 million, compared to $778.0 million earned in the third quarter last year. Paccar Parts achieved pre-tax profit of $406.3 million in the first nine months of 2016, compared to $430.0 million in the first nine months of 2015. Paccar Parts’ nine month revenues were $2.24 billion, compared to $2.31 billion for the same period last year.

Kristofer Harrison, The National Interest / October 25, 2016 Think the public doesn’t care about foreign policy? Ask Barack Obama, who built his 2008 campaign on a foundation of popular anger over Iraq. Yet, Congress—the people’s representatives and the branch closest to the mood of the country—routinely cedes foreign policy decision-making to executive branch bureaucrats. Like everything else, the Founders subjected foreign policy power to checks and balances, but Congress routinely leaves its most powerful tools fallow. Now and then, the House of Representatives threatens to withhold funds for a significant foreign policy issue (e.g. Iraq), and, occasionally, the Senate will block an ambassador about whom nobody cares. But otherwise, the Congress seems to throw its hands up and give the executive free reign. Syria presents a looming civics lesson. All indicators point to a Clinton presidency, which means a push for no-fly zones in Syria. Congress had better be careful. Voters may not support a no-fly zone, and if Congress becomes complicit in pushing one forward, the country's politics will look far Trumpier than even now. Unless Congress relearns how to influence foreign policy, the country will sleepwalk into Hillary Clinton’s proposed half-baked military solution just because the think tank community wants it and because it appears to be the opposite of President Obama’s Alfred E. Neuman approach to Syria. If public opinion gels against it, the GOP will pay dearly at the polls. Congress needs to do its political due diligence. Be wary of following experts over a cliff. The first thing Congress should do is knock off the nonsense that resistance to no-fly zones means someone is an isolationist, pro-Russian or okay with genocide. Those are infuriating arguments for opponents (i.e. voters) whose concern typically revolves around a no-fly zone’s efficacy—why are we doing it?—or mission creep. The GOP has still not come to terms with Iraq. Witness Senator Rubio. He ran for president on a platform that the Iraq war was a good thing and that Syria needs similar medicine. Understandably, voters view GOP foreign policy with a skeptical eye. “What is the goal?” "How do no-fly zones achieve it?" “Would this not only reprise the 1990s creeping mission against Saddam Hussein?” If the public approves of those answers, proceed. Yet, teasing out these answers falls to Congress. The executive branch will not do it. Remember, they have experts who think they know the answer. Congress must start small. Define the threat. Pass legislation spelling out that there are multiple issues in Syria: ISIS, Assad, and Russia. Make clear that no-fly zones address the latter, and do not let the administration conflate the threats. Teasing out those questions will require Congress to make better use of hearings. Congress must relearn the art of holding them. Carefully conducted, hearings should powerfully amplify a message and frame political contrasts. Beltway wonks relish a good game of gotcha, but using basic policy questions (e.g., “Who do you want to achieve in Syria?”) is a better way to embarrass and pressure the executive. Incidentally, message to Congress: think tanks are not your audience; voters are. Hearings should generate headlines. Congress needs to invite better witnesses—not just think tank experts—and ask better questions. Members must stop asking questions that generate minutiae. Nobody cares, and, besides, that is why Congress has staff. Ask questions that prompt answers voters care about. Here, topics matter, too. Here’s one: Obama’s Syria policy creates a situation where Iran has thousands of ground troops, Russia bombs with impunity, we stand at cross purposes with our NATO ally Turkey, and we expend enormous effort to force our Sunni Arab allies in the Gulf to stand idly by and observe a Sunni Arab genocide. This strategy, such that it is, has an obvious problem. Eventually, our Sunni Arab allies will involve themselves, and they will stop listening to us. The corollary is that Assad labels all dissenters as terrorists and kills them, so when our Gulf Arab allies do lose all patience with us, their only remaining potential partners on the ground will be ISIS and Al Qaeda. Surely, the public cares about a strategy that will force our allies into the arms of Al Qaeda. Congress can do more than just hold hearings. Without dispute, the president is the chief diplomat, but that does not mean Congress cannot communicate with our allies. Invite Gulf Arab allies to address Congress and hold consultations. Do what our diplomats cannot do and explain our political constraints. Ask them, “Given those constraints, how can the United States and its allies defeat ISIS?” In reality, Clinton should welcome this as she helped plant the seeds of Obama’s Syria policy while secretary of state. No president wants to admit failure, and, with Obama planning to remain in Washington D.C. after his presidency, she may be loath to criticize him. Realistically, she may chafe at Congress’ efforts. Good. Congress can do this seven times, once with each Gulf Arab country. If Clinton still refuses to work with Congress, it can start highlighting the immigration crisis caused by Syria and start inviting our 28 NATO allies, one-by-one to talk about it. Heretofore, Congress has done little more than appeal to virtue and hope that voters pressure the president and his experts to change course for having a lack of it. Half a million dead Syrians speaks volumes their relative immunity from political pressure, though. Corralling moral outrage is not enough. Congress needs to relate the foreign policy to the public. Syria presents plenty of issues that people care about: immigration, giving allies no choice but to work with Islamic radicals, potential mission creep that could see the United States reprising some of the 20 year Iraq saga, cost, and so on. Even if the voters do not get animated about Syria wonkiness, they will start reacting to the domestic implications. George Washington made this point multiple times in his Farewell Address when talking about "enlightened" public opinion. But that only works—Congress’ check on the Executive only has traction—when Congress enlightens it. That does not mean educating them or trying to spark moral outrage; it means highlighting political contrasts and relating the issues to a local audience. Nobody should excel at that more than members of Congress, but currently they do not. Kristofer Harrison served in both the Departments of Defense and State during the George W. Bush administration on issues ranging from Russia to Iraq. During the primaries he served as a foreign policy advisor to Senator Ted Cruz (R-TX).

Arizona Sheriff who arrests illegal immigrants charged with criminal contempt Associated Press / October 26, 2016 The longtime sheriff of metropolitan Phoenix was charged Tuesday with criminal contempt-of-court for ignoring a judge's order in a racial-profiling case, leaving the 84-year-old lawman in a tough spot two weeks before Election Day as he seeks a seventh term. The U.S. Department of Justice promised two weeks ago that it would prosecute Sheriff Joe Arpaio, but the misdemeanor count wasn't officially filed against him until U.S. District Judge Susan Bolton signed it. Arpaio could face up to six months in jail if convicted. A misdemeanor conviction would not bar Arpaio from serving as sheriff. Democratic challenger Paul Penzone said Arpaio, through his acts of political defiance, has no one to blame but himself for the charge. "It's another example of the sheriff putting his own personal objectives ahead of the best interest of the community at our expense," Penzone said. Arpaio lawyer Mel McDonald said the sheriff will contest the charge. "We believe that when the final chapter is written, he will be vindicated," McDonald said. McDonald said Arpaio will not be arrested and no mugshot will be taken. He will plead not guilty in a court filing. The criminal charges stem from the profiling case that Arpaio lost three years ago that morphed into a contempt case after the sheriff was accused of defying a 2011 court order to stop his signature immigration patrols. Arpaio has acknowledged violating U.S. District Judge Murray Snow's order but insists his disobedience was not intentional. Snow disagreed, concluding Arpaio knowingly continued the patrols because he believed his immigration enforcement efforts would help his 2012 re-election campaign. Arpaio ran a TV political ad last week saying the Obama administration's Justice Department planned to prosecute him because of its opposition to his immigration enforcement efforts. In the past, Arpaio has walked away from criminal investigations without facing charges and still has managed to get re-elected. He faced a federal investigation four years ago on allegations that he retaliated against two local officials and a judge at odds with him by accusing them of corruption. His office also was investigated for misspending more than $100 million in jail funds, including on those failed investigations into rival officials and his traffic patrols targeting immigrants who are in the country illegally. Neither investigation led to prosecution of the sheriff or his employees. County taxpayers have spent $48 million so far to defend Arpaio and his office in the profiling case. The cost is expected to reach $72 million by next summer. The contempt violation led the judge to order the creation of a taxpayer-funded system for compensating Latinos who were illegally detained when Arpaio ignored the order. Maricopa County officials have set aside $1 million for funding the system. A Dec. 6 trial has been scheduled in Arpaio's criminal contempt case. .

Volvo anticipating further decline in Class 8 truck market Truck News / October 25, 2016 Volvo Trucks is projecting North American Class 8 truck sales are going to get worse before they get better. Magnus Koeck, vice-president of marketing and brand management, told the truck press Monday that Volvo is predicting a total North American Class 8 market of 215,000 units for 2017. That’s down from the 240,000 that will be sold this year and way off 2015’s mark of more than 300,000 units. “We believe it’s going to continue to decline a bit going into next year,” Koeck said. “We have a lot of inventory for the industry out there at the dealers. When the market came to a halt in June and July of last year, OEMs, including ourselves, continued to produce trucks in our factories as if nothing has happened and eventually that became a lot of trucks at dealers and that’s, I’d say, the major impact that we can see now for new orders for the industry.” Dealer inventories are being reduced, Koeck said, but they will still be a factor into next year. The inventory glut has been exacerbated by a slowdown in freight volumes. The reduced order intake is especially acute in the long-haul segment, which is down about 35-40% and regional haul, down about 32%, and these are the two segments in which Volvo is strongest, Koeck pointed out. The construction segment is up about 3-4% this year. This is a trend that could continue. Koeck said the expansion of the Panama Canal will bring more freight to the eastern seaboard, which could be a boon for regional trucking. And the industry’s inability to find linehaul drivers will also drive the regionalization of trucking. Koeck said longhaul’s share of the Class 8 market could fall from about 50% today to 43% of the total market while regional haul increases its share from about 27% today to about 35%. Natural gas today comprises just 2% of the US market and Koeck said he doesn’t expect that to change in the near future. Koeck made the comments prior to Volvo’s Safety Symposium, where it demonstrated safety systems such as Volvo Enhanced Stability Technology and its new Volvo Active Driver Assist. More than 100 customer and dealers were invited to attend.

Commercial Carrier Journal (CCJ) / October 25, 2016 A group representing concrete haulers and their drivers has asked the Federal Motor Carrier Safety Administration for an exemption from the required 30-minute break stipulated by hours of service regulations. The American Concrete Pumping Association’s exemption request would apply across the concrete pumping industry to all concrete pump operators, concrete pumping companies and drivers who deliver, set up and operate concrete pumps across the U.S. ACPA says many of the trucks operate intrastate and wouldn’t be covered under the exemption, but “an unknown number of the pumping trucks are operated in metropolitan areas and do routinely cross state lines.” The association says it has several reasons behind the exemption request. First, ACPA says the mandatory 30-minute break increases the risk of dangerous conditions on job sites because it would require the concrete pump on a job site to the shut down. The association says stopping the flow of concrete can allow air to enter the pipes, which could cause hoses to whip around and hit a pump operator. Additionally, the association says the pump operators already take breaks throughout the day, so an additional 30-minute break doesn’t enhance safety. Another factor, ACPA says, is that the operators only drive approximately between 25 and 32 percent of their shift and average daily driving distances of just 20-25 miles. Finally, ACPA says that because ready-mixed concrete truck drivers were granted a permanent exemption from keeping logs if operating within a 100-mile radius, its concrete pump operators don’t have time to take a break because of the perishable nature of concrete. The concrete hardens within 90 minutes of the ingredients being mixed, ACPA says. FMCSA is seeking public comment on the request, which can be made here on or before Nov. 25, or by searching Docket No. FMCSA-2016-0342 at www.regulations.gov.

Paccar Profit Falls as Market Share Moves Higher Heavy Duty Trucking / October 25, 2016 At a time when many trucking companies are reporting lower third quarter earnings, truck and engine manufacturer Paccar saw earnings fall by 19.7%. Paccar, the parent to truck brands Kenworth, Peterbilt and DAF, reported its profit declined to $346.2 million, or 98 cents per share, for the third quarter of 2016 compared to $431.2 million, or $1.21 per share a year earlier. The per share missed a consensus estimate from analysts by 1 cent. Revenue for Paccar in the most recent quarter totaled $4.25 billion compared to $4.85 billion for the same period last year. Net income for the first nine months of the year is down considerably, hitting $232.9 million, versus $1.26 billion in the first nine months of 2015. Despite lower numbers, Paccar CEO Ron Armstrong described the company as having reported good revenues and net income for the third quarter of 2016. “Paccar’s third quarter results reflect strong truck markets in Europe, increased heavy-duty truck market share in North America and Europe, and good aftermarket parts and financial services results worldwide,” he said. According to the Washington state-based company, Peterbilt and Kenworth’s record third quarter U.S. and Canada Class 8 retail sales market share of 31% increased their year-to-date market share to 27.9%. Despite this hike, Paccar revenue from its truck, parts and other operations fell to $3.95 billion in the most recent quarter from $4.5 billion a year earlier. The earnings report follows those from rivals Daimler Trucks reporting increased profits while Volvo Group saw its earnings decline. Paccar noted that Class 8 truck industry retail sales for the U.S. and Canada are expected to be 215,000-225,000 vehicles in 2016, and 200,000-230,000 in 2017.

Paccar Press Release / October 25, 2016 “Paccar reported good revenues and net income for the third quarter of 2016,” said Ron Armstrong, chief executive officer. “Paccar’s third quarter results reflect strong truck markets in Europe, increased heavy-duty truck market share in North America and Europe, and good aftermarket parts and financial services results worldwide. I am very proud of our 23,000 employees who have delivered industry-leading products and services to our customers.” PACCAR earned $346.2 million ($.98 per diluted share) for the third quarter of 2016 compared to $431.2 million ($1.21 per diluted share) earned in the third quarter of 2015. Third quarter net sales and financial services revenues were $4.25 billion this year compared to $4.85 billion for the same period last year. For the first nine months of 2016, PACCAR reported adjusted net income (non-GAAP) of $1.07 billion ($3.03 per diluted share), excluding an $833.0 million non-tax-deductible, non-recurring charge for a European Commission (EC) settlement. The company earned $1.26 billion ($3.53 per diluted share) in the first nine months of 2015. PACCAR reported net income of $232.9 million ($.66 per diluted share) in the first nine months of 2016, including the non-recurring charge. Net sales and financial services revenues for the first nine months of 2016 were $12.96 billion compared to $14.76 billion last year. PACCAR Celebrates 20 Years of DAF Trucks PACCAR acquired DAF in 1996 and has increased its above 16-tonne market share in Europe from nine percent in 1996 to 15.6 percent this year. DAF is the overall above 16-tonne market share leader in the U.K., the Netherlands, Poland and Hungary. DAF manufactures trucks in Europe, South America and Asia, and sells trucks, engines and aftermarket parts in over 100 countries worldwide. Kenworth and Peterbilt have benefited from DAF’s leadership in the design and production of commercial vehicle diesel engines. The success of PACCAR’s MX engines in North America, produced in PACCAR’s Mississippi engine factory, has contributed to Kenworth and Peterbilt’s U.S. and Canada Class 8 market share growth to a quarterly record of 31 percent. Financial Highlights – Third Quarter 2016 Highlights of PACCAR’s financial results for the third quarter of 2016 include: Consolidated sales and revenues of $4.25 billion. Net income of $346.2 million. PACCAR Parts quarterly pre-tax income of $138.3 million. Financial Services quarterly pre-tax income of $71.0 million. Manufacturing cash and marketable securities of $2.80 billion. Financial Highlights – Nine Months 2016 Highlights of PACCAR’s financial results for the first nine months of 2016 include: Consolidated sales and revenues of $12.96 billion. Adjusted net income of $1.07 billion (non-GAAP), excluding an $833.0 million non-tax-deductible, non-recurring charge for the EC settlement. Net income of $232.9 million. PACCAR Parts pre-tax income of $406.3 million. Financial Services pre-tax income of $228.6 million. Cash generated from operations of $1.49 billion. Combined capital and research and development expenditures of $445.4 million. Medium-term note issuances of $1.84 billion. Bank credit facilities of $3.0 billion renewed. Global Truck Markets “Customers recognize DAF’s product quality leadership, low operating costs and excellent resale value,” said Preston Feight, DAF president and PACCAR vice president. “DAF achieved year-to-date European above 16-tonne truck market share of 15.6 percent compared to 14.6 percent in the same period last year.” It is estimated that the European truck industry sales in the above 16-tonne market will be in the range of 290,000-300,000 units this year, one of the best markets in history, and are projected to be in the range of 260,000-290,000 units in 2017. Class 8 truck industry retail sales for the U.S. and Canada are expected to be in a range of 215,000-225,000 vehicles in 2016. Class 8 truck industry retail sales for the U.S. and Canada are estimated to be in the range of 200,000-230,000 vehicles in 2017. Peterbilt and Kenworth’s record third quarter U.S. and Canada Class 8 retail sales market share of 31 percent increased their year-to-date market share to 27.9 percent. “Our customers are benefiting from the excellent operating efficiency of Peterbilt and Kenworth trucks,” said Gary Moore, PACCAR executive vice president. PACCAR Launches Proprietary Axle in North America PACCAR has launched a new proprietary tandem axle in North America that is the industry’s lightest and most efficient axle in its class. The axle will be available to customers in January 2017. “PACCAR’s axle reduces vehicle weight by up to 150 lbs. and improves fuel economy,” noted Landon Sproull, PACCAR vice president. A unique design simplifies power flow in the axle for enhanced efficiency, and innovative fluid distribution technology reduces weight and improves fuel economy. The axle is rated at 40,000 lbs., supporting a gross combination weight of 80,000 lbs. PACCAR Enhances MX-13 and MX-11 Engines PACCAR is enhancing its range of MX engines for 2017. The updated PACCAR engines deliver increased power and reduced operating costs for North American customers. PACCAR increased the MX-13 engine’s output to 510 hp and 1,850 lb-ft of torque and increased the MX-11 engine’s output to 430 hp and 1,650 lb-ft of torque. PACCAR’s MX engines deliver peak torque at 900 RPM for the majority of engine ratings, supporting increased performance and driving flexibility. “The 2017 PACCAR MX-13 and MX-11 engines provide customers with up to four percent fuel economy gains,” said Kyle Quinn, PACCAR senior vice president. “The MX engines’ oil and filter change intervals have been extended from 60,000 miles to 75,000 miles. These enhancements will deliver excellent cost savings for customers over the life of the vehicle.” DAF Introduces DAF Connect Telematics System at IAA Truck Show DAF launched DAF Connect at the IAA truck show in Hanover, Germany last month. DAF Connect provides customers with fleet management data to enhance vehicle and driver performance. Customers access the information through an online service, enabling them to optimize vehicle utilization and uptime, reduce operational expenses and enhance logistical efficiency. DAF Connect provides a unique open technology platform, which can seamlessly interface with customers’ other telematics systems. Peterbilt Launches SuperTruck II Program Peterbilt and Cummins are partnering to launch their five-year U.S. Department of Energy SuperTruck II program. The goal of the program is to double Class 8 vehicle freight efficiency in order to achieve Greenhouse Gas emissions requirements for model years 2021, 2024 and 2027. Peterbilt is targeting aerodynamics improvements of 15 percent, which would provide customers with up to 7.5 percent improvement in fuel economy. Peterbilt is partnering with suppliers to develop low rolling resistance tires and fuel-saving technologies in auxiliary systems, such as air compressors, power steering pumps and cooling pumps. Peterbilt and Cummins partnered in the original SuperTruck program, which culminated in 2013 with the production of the Peterbilt Model 579 SuperTruck. Many of the technologies developed in the original SuperTruck program are available in the fuel-efficient Peterbilt Model 579 EPIQ. PACCAR Parts Expands TRP Stores DAF, Kenworth and Peterbilt dealers have opened 58 TRP retail stores, which provide high quality aftermarket products and services to owners of all makes of light-, medium- and heavy-duty trucks, trailers, buses and engines. TRP stores are strategically located close to customers in order to provide TRP products and technical expertise. The first TRP store opened in Poland in 2013, and there are now retail stores in Europe, North America, South America, Australia and Africa. “PACCAR Parts’ TRP brand increases the aftermarket parts and service business available to our dealers and is supported by our global distribution network,” commented Dick Leek, PACCAR Parts Europe general manager. PACCAR Parts’ TRP Store in Madrid, Spain PACCAR Parts generated pre-tax profit of $138.3 million in the third quarter of 2016, compared to $145.4 million achieved in the third quarter of 2015. Third quarter 2016 revenues were $764.8 million, compared to $778.0 million earned in the third quarter last year. PACCAR Parts achieved pre-tax profit of $406.3 million in the first nine months of 2016, compared to $430.0 million in the first nine months of 2015. PACCAR Parts’ nine month revenues were $2.24 billion, compared to $2.31 billion for the same period last year. Increased Capital Investment and Product Development PACCAR’s excellent long-term profits, strong balance sheet and intense focus on quality have enabled the company to invest $6.1 billion in capital projects, innovative products and new technologies during the past decade. Capital investments of $375-$400 million and research and development expenses of $240-$250 million in 2016 are delivering new products, enhanced manufacturing and parts distribution facilities, and innovative aftermarket support programs. Capital investments are projected to be $375-$425 million, and research and development expenses are estimated to increase to $270-$300 million in 2017. “The company is investing for future growth in PACCAR integrated powertrain components, advanced driver assistance and truck connectivity technologies, and enhanced manufacturing and parts distribution facilities,” said Bob Christensen, PACCAR president and chief financial officer. “DAF’s new $110 million cab paint facility is on schedule to open in mid-2017. PACCAR Financial Services will open its new used truck center in Chicago early next year, reflecting Kenworth and Peterbilt’s increased sales to fleet customers.” Financial Services Companies Launch Mobile Applications PACCAR Financial Services (PFS) offers competitive retail financing to Peterbilt, Kenworth and DAF dealers and customers. PFS has a portfolio of 176,000 trucks and trailers, with total assets of $12.37 billion. PacLease, a major full-service truck leasing company in North America and Europe, with a fleet of nearly 38,000 vehicles, is included in this segment. PFS provides leading-edge technology solutions, excellent customer service and dedicated support to the transportation industry. PFS recently introduced a mobile sales and credit system, which allows customers and dealers to complete a loan application, receive an expedited credit decision and electronically sign a contract on a mobile device. “Kenworth, Peterbilt and DAF dealers and customers appreciate the ease of doing business with PFS due to its innovative technology solutions,” said Todd Hubbard, PACCAR Financial president. PACCAR’s strong balance sheet, complemented by its A+/A1 credit ratings, enables PFS to have excellent access to the commercial paper and medium-term note markets. PFS profitably supports the sale of PACCAR trucks in 23 countries on four continents. PFS achieved good profits during the third quarter and first nine months of 2016 due to excellent portfolio performance. PFS earned $71.0 million in the third quarter this year compared to $92.9 million earned in the same period last year. Third quarter 2016 revenues were $296.2 million compared to $301.0 million in the same quarter of 2015. For the nine-month period, PFS pre-tax income was $228.6 million in 2016 compared to $272.7 million last year. Nine-month revenues were $883.0 million in 2016 compared with $879.5 million for the same period a year ago. Environmental Leadership Kenworth’s truck factories in Chillicothe, Ohio and Renton, Washington were honored recently with awards for environmental leadership. The Kenworth Chillicothe factory earned the 2016 Ohio Energy Efficiency Award presented by American Electric Power, a large electric utility in Ohio. Kenworth Chillicothe was honored for reducing its energy consumption by five million kilowatt hours over a two year period. The Kenworth Renton factory earned two King County, Washington environmental leadership awards. The Kenworth Renton factory was honored with the 2016 Best Workplace for Waste Prevention and Recycling Award for its exceptional recycling programs. Kenworth Renton also earned the Gold Award, recognizing the outstanding results of its wastewater treatment programs. .

Daimler Press Release / October 21, 2016 Unit sales 5% above prior-year level at 754,100 vehicles Revenue up by 4% to €38.6 billion Significant increase in Group EBIT to €4,037 million (Q3 2015: €3,661 million) Group EBIT adjusted for special items at highest level to date of €4,010 million (Q3 2015: €3,657 million) Net profit of €2,726 million (Q3 2015: €2,415 million) Good level of free cash flow of industrial business despite special items Slight growth in unit sales and revenue at prior-year’s level anticipated for full-year 2016 Group EBIT adjusted for special items still expected to be slightly higher than in 2015 Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars: “Daimler again posted record earnings in the third quarter. We will make the year 2016 into another successful year for Daimler.” Bodo Uebber, Member of the Board of Management of Daimler AG for Finance & Controlling and Daimler Financial Services: “We are growing sustainably and profitably. Daimler remains on track to achieve our earnings forecasts for the full year, despite volatile sales and finance markets.” Stuttgart, Germany – Daimler AG (ticker symbol DAI) posted record unit sales and EBIT adjusted for special items, thus continuing along its successful path. In the third quarter of 2016, Daimler sold 754,100 cars and commercial vehicles worldwide, more than ever before in a third quarter and surpassing the total for the prior-year period by 5%. In the first nine months of the year, the Group’s unit sales increased by 6% to 2.2 million vehicles. The Daimler Group’s third-quarter revenue amounted to €38.6 billion, which is 4% higher than in the third quarter of 2015. Adjusted for exchange-rate effects, revenue grew by 3%. The Daimler Group achieved third-quarter EBIT of €4,037 million, thus significantly surpassing its prior-year earnings of €3,661 million. Group EBIT adjusted for special items reached its highest level to date of €4,010 million (Q3 2015: €3,657 million). Net profit improved to €2,726 million (Q3 2015: €2,415 million). Net profit attributable to the shareholders of Daimler AG increased to €2,595 million (Q3 2015: €2,385 million), leading to an increase in earnings per share to €2.43 (Q3 2015: €2.23). “Daimler again posted record earnings in the third quarter. So we have proven one more time that we are pursuing the right strategy. We will systematically continue along our course,” stated Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars. “Our attractive products and innovative services provide us with good momentum. We will use this to utilize the great potential of electric mobility. With our new product brand, EQ, we have established an important basis for leadership also with electric drive systems. But first of all, we will make the year 2016 into another successful year for Daimler.” The EBIT of the Mercedes-Benz Cars division increased significantly, due in particular to growing unit sales in the SUV segment and the market success of the new E-Class. The Mercedes-Benz Vans division also increased its EBIT significantly, as a result of higher revenue. However, Daimler Trucks and Daimler Buses could not match their high earnings of the prior-year quarter. Among other things, this was caused by sharp decreases in unit sales in some key markets. At Daimler Financial Services, earnings increased significantly primarily due to growth in contract volume. Exchange-rate effects had an overall positive effect on operating profit. The special items in the third quarters of 2016 and 2015 are shown in the table on page 13. “Due to our global positioning, our attractive products and above all our highly motivated workforce, we are growing sustainably and profitably. Daimler remains on track to achieve our earnings forecasts for the full year, despite volatile sales and finance markets,” said Bodo Uebber, Member of the Board of Management of Daimler AG for Finance & Controlling and Daimler Financial Services. “With our strong balance sheet, we have a very good basis to invest substantially in the future areas of digitization and electrification. Despite our financial strength, we also have to remain focused and disciplined. One of the great challenges for the automotive industry will be to optimize and prioritize budgets not only for the ongoing business, but for structural technological developments.” Free cash flow In the first nine months of 2016, the free cash flow of the industrial business resulted in a cash inflow of €2.6 billion (Q3 2015: €4.8 billion). This decrease was due to different factors. The payment of the fine imposed by the European Commission in the context of the settlement in the truck antitrust proceedings against Daimler AG reduced the free cash flow of the industrial business by €1.0 billion. Furthermore, there were higher tax payments, as the prior-year period was influenced by tax refunds. The free cash flow of the industrial business was also impacted by higher investments in intangible assets and property, plant and equipment. Positive effects resulted from the development of working capital. Net liquidity Compared with December 31, 2015, the net liquidity of the industrial business decreased from €18.6 billion to €17.9 billion. The decrease was mainly caused by the dividend payment to the shareholders of Daimler AG, which more than offset the positive free cash flow. Workforce At the end of the third quarter of 2016, Daimler employed 284,482 people worldwide (Q3 2015: 286,248; end of 2015: 284,015). Of that total, 172,857 were employed in Germany (Q3 2015: 172,561; end of 2015: 170,454) and 22,145 in the United States (Q3 2015: 24,588; end of 2015: 24,607). Details of the divisions Mercedes-Benz Cars’ third-quarter unit sales increased by 11% to 565,600 vehicles. The car division thus set another record in the past quarter. In Europe, Mercedes-Benz Cars achieved another high, selling 12% more vehicles than in the prior-year period. Double-digit growth was recorded in the United Kingdom, France, Italy, Spain and Belgium. In Germany, 8% more units of the Mercedes-Benz and smart brands were sold. In China, sales increased by 20% to a record level, and records were set also in Japan (+8%), South Korea (+40%), Australia (+8%) and Taiwan (+13%). Unit sales were higher than ever before in a third quarter also in the NAFTA region. In the United States, sales in the period of July through September rose by 2%. The largest division’s revenue increased by 12% to the best-ever figure of €23.3 billion in the third quarter. Mercedes-Benz Cars’ EBIT also increased significantly to €2,746 million – another record (Q3 2015: €2,183 million). Return on sales rose accordingly to 11.8% (Q3 2015: 10.5%). The very positive earnings development was primarily a reflection of growth in unit sales in the SUV segment and the new E-Class. Favorable exchange-rate developments and improved pricing also had a positive impact on EBIT. There were opposing effects from advance expenditure for new technologies and vehicles. Daimler Trucks sold 97,100 vehicles in the third quarter of this year (Q3 2015: 128,500). The decrease is the result of lower demand for trucks in many key markets. In the NAFTA region, unit sales by Daimler Trucks decreased to 31,400 units in a declining market (Q3 2015: 52,200). At the same time, the division succeeded in further extending its market leadership in Classes 6-8, taking 39.3% of the market (Q3 2015: 38.1%). Daimler Trucks delivered 3,500 units in a contracting market in Brazil, which is fewer than in the third quarter of last year (Q3 2015: 4,300). In the EU30 region (European Union, Switzerland and Norway), sales growth of 7% was achieved to 21,300 units. Daimler Trucks sold more vehicles than in the prior-year period also in Germany (+4%). In Turkey, the truck division was not immune to the difficult conditions and its sales decreased to 1,700 units in the third quarter (Q3 2015: 4,500). The fall in unit sales to 3,300 (Q3 2015: 9,700) vehicles in the Middle East mainly caused the negative development in Asia. In Japan, the region’s major market, sales of 11,700 units were at the level of the prior-year quarter. Sales in Indonesia amounted to 6,700 units (Q3 2015: 5,400). The joint venture in China achieved sales growth of 18% with Auman trucks, selling 16,900 vehicles. The division’s revenue decreased from €9.7 billion to €7.9 billion. Daimler Trucks’ EBIT of €464 million and return on sales of 5.9% were significantly lower than the high levels of the prior-year period (Q3 2015: €791 million and 8.2%). Negative effects on the division’s earnings primarily resulted from lower unit sales in the NAFTA region, Turkey and the Middle East. Earnings were also reduced by intense competition in Europe. The realization of further efficiency improvements and exchange-rate effects had positive effects on earnings. EBIT also includes expenses for workforce adjustments in the context of ongoing optimization programs in Brazil. Mercedes-Benz Vans increased its unit sales by 13% to the new record of 85,200 vehicles in the third quarter of 2016. In its core region of Western Europe, the van division achieved growth in unit sales of 13%. Strong growth was achieved once again in France (+16%), Spain (+14%) and Italy (+40%). In Germany, the important domestic market, Mercedes-Benz Vans achieved a record in a third quarter (+19%). In Eastern Europe, however, unit sales decreased by 19%; sales in that region were primarily influenced by weak demand in Turkey (-50%) and Russia (-32%). Developments in the NAFTA region were positive once again with an increase of 14%. The market environment in Latin America remained difficult, but unit sales stabilized there (-3%). In China, unit sales more than doubled following the launch of the Vito. The division’s revenue grew by 13% to €3.1 billion. EBIT increased by 62% to €312 million. Return on sales also increased significantly to 10.0%, compared to 7.0% in the third quarter of last year. The division’s EBIT reflects the very positive development of unit sales, especially in Europe, the NAFTA region and China, as well as further efficiency improvements. Exchange-rate effects had a positive effect on earnings. Third-quarter sales by Daimler Buses decreased by 17% to 6,200 units. In Western Europe, 1,700 buses of the Mercedes-Benz and Setra brands were sold despite supply bottlenecks in the logistics chain (Q3 2015: 1,800). Sales in Germany, the domestic market, improved to 600 units and the division’s undisputed market leadership continued. In Turkey, sales were significantly lower than in the third quarter of last year due to the current difficult situation in that country. Also in Latin America (excluding Mexico), the ongoing difficult economic situation in Brazil continued to have a negative impact on demand for bus chassis, so sales of 2,200 units were significantly lower than in the prior-year period (Q3 2015: 3,500). In Mexico, 1,200 units were sold (Q3 2015: 1,200). The division’s revenue of €0.9 billion was lower than in the prior-year period due to the decrease in unit sales (Q3 2015: €1.0 billion). Daimler Buses’ EBIT of €45 million was significantly below the very high prior-year level (Q3 2015: €89 million). Return on sales was 4.8% (Q3 2015: 8.7%). The persistently difficult economic situation in Brazil and the associated decline in demand for chassis negatively affected earnings also in the third quarter. In addition, significantly lower unit sales in Turkey due to the uncertain economic situation and cost inflation in Latin America had a negative impact on earnings. However, further efficiency improvements had a positive effect on earnings. The automotive divisions were also affected by the restructuring of their own dealer network. At Daimler Financial Services, new business increased also in the third quarter of 2016: Worldwide, approximately 415,000 new leasing and financing contracts were concluded with a total volume of €15.7 billion, an increase of 7% over the prior-year period. Contract volume reached €122.1 billion at the end of September and was 5% above the level of year-end 2015. Adjusted for exchange-rate effects, contract volume grew by 6%. The division’s EBIT increased significantly to €438 million (Q3 2015: €378 million) and return on equity rose accordingly. The main reasons for the positive development were the growth in contract volume and a slight improvement in cost of risk. On the other hand, earnings were reduced by negative exchange-rate effects. The reconciliation of the divisions’ EBIT to Group EBIT comprises gains at the corporate level and the effects on earnings of eliminating intra-group transactions between the divisions. Items at the corporate level resulted in income of €39 million in the third quarter of 2016 (Q3 2015: €11 million). The elimination of intra-group transactions resulted in an expense of €7 million (Q3 2015: income of €16 million). Investment in the future The Daimler Group invested €1.4 billion in property, plant and equipment in the third quarter of this year (Q3 2015: €1.1 billion). Most of that investment, €1.1 billion, was at the Mercedes-Benz Cars division (Q3 2015: €0.8 billion). The main focus of capital expenditure was on production preparations for new models, in particular the derivatives of the C-Class and the E-Class, as well as investments for new transmissions and engine versions. Another area of capital expenditure was for the ongoing expansion of the international production and component plants. At Daimler Trucks, the main investments were for engines, transmissions and new vehicles, as well as the optimization of the worldwide production network. The Daimler Group’s research and development spending in the third quarter of the year amounted to €1.9 billion (Q3 2015: €1.6 billion), of which €0.6 billion was capitalized (Q3 2015: €0.5 billion). More than two thirds of the research and development spending (€1.4 billion) was at the Mercedes-Benz Cars segment (Q3 2015: €1.2 billion). A substantial proportion of that amount represents advance expenditure for the mobility of the future. The other main areas there, as at Daimler Trucks, were new vehicle models, particularly fuel-efficient and environmentally friendly drive systems, and the intensification of the modular strategy. Outlook for the markets At the beginning of the fourth quarter, the fundamental situation of the world economy has not changed; there are no perceptible indications of either acceleration or deceleration of growth. Although moderate expansion can be expected for the fourth quarter, full-year 2016 will probably have the lowest growth rate since the financial crisis, with expansion of global gross domestic product (GDP) of just under 2.5%. According to recent assessments, worldwide demand for cars is likely to increase from its already high level by about 2% in 2016. Once again, the biggest contribution to this global growth should come from the Chinese market, which is likely to continue expanding at a significant rate. But the expected increase in demand will to a great extent be due to state stimulus. No more growth is expected for the US market for cars and light trucks, and sales volumes there will be slightly below the high level of the previous year. Significant growth is anticipated for the car market of Western Europe. With a view to the individual markets, this growth is continuing on a relatively broad base. Despite the vote in favor of Brexit, current assessments are that the British market will remain at its unusually high level. In Japan, a slight decrease in demand is to be expected following the significant market correction of 2015. Prospects for the major emerging markets remain mixed. In India, market growth is likely to remain solid. In Russia, however, the ongoing difficult economic situation will probably result in another double-digit drop in car sales. Demand for medium- and heavy-duty trucks in the regions important for Daimler should be perceptibly below the prior-year volume. A major negative factor is the expected significant market contraction in North America. In a comparatively weak overall investment environment, from today’s perspective, demand in the market for Classes 6­8 trucks can be expected to decrease by approximately 15%. But the European market has so far proven to be relatively resilient and should continue its recovery with growth of 5-10% in the full year. There is still no turnaround in sight for the Brazilian market; due to the ongoing economic recession, the company has to anticipate further market contraction there in the magnitude of 25%. The situation of the Russian market has meanwhile stabilized somewhat, so it should not contract any further than its very low prior-year level. Demand in China will recover significantly after last year’s sharp market contraction. The Japanese market for light-, medium- and heavy-duty trucks continues its solid development and should be close to its level of 2015. The Indonesian truck market is likely to contract once again, however; from today’s perspective, Daimler anticipates contraction of approximately 15%. In India, only slight growth is meanwhile expected in the segment of medium- and heavy-duty trucks. The Group expects significant growth in the markets for mid-size, large and small vans in Western Europe in 2016. Significant growth in demand for large vans is anticipated also in the United States. In Latin America, however, Daimler expects further significant contraction in the market for large vans. In China, significantly lower demand is now anticipated in the market addressed there. Daimler now expects a significantly larger market volume for buses in Western Europe in 2016 than in 2015. In Brazil, further significant market contraction is anticipated in full-year 2016. Outlook for the divisions On the basis of the assumptions presented above on the development of important markets and of the division’s current assessments, Daimler expects to slightly increase its total unit sales in the year 2016. Following the strongest first three quarters of a year for Mercedes-Benz Cars, the division intends to continue its growth in the fourth quarter and thus to significantly increase its unit sales in full-year 2016. This will be primarily driven by the new E-Class sedan, which has made a successful start, as well as by the new wagon version of the E-Class, deliveries of which will start in Europe in October. Sales will be boosted also by the market launch of the GLC Coupe in the United States – a model without a direct predecessor in the product portfolio. The Mercedes-AMG GT R and its convertible version, the Mercedes-AMG GT Roadster, will be available to customers as of the end of the year. This year’s model offensive will be concluded with the market launch of the new smart fortwo coupe electric drive in the USA. Due to negative developments in many truck markets, Daimler Trucks assumes that unit sales in full-year 2016 will be significantly lower than in the previous year. Weaker development of demand for heavy-duty trucks in the NAFTA region will have a significant impact on sales. A significantly weaker sales development is anticipated also in Brazil, in a sharply declining market environment. Increased sales of trucks should be achieved in the EU30 region (European Union, Switzerland and Norway). In Turkey, Daimler Trucks anticipates a significant decrease in unit sales in the full year. This is due to purchases being brought forward to 2015 because of the new emission standard taking effect in 2016, as well as the current economic environment. The low level of oil prices is negatively impacting demand in the Middle East, so a substantial reduction in unit sales is expected in that region. It is assumed that unit sales in the full year will be significantly lower also in Indonesia for market-related reasons. Truck sales in Japan should be at the level of the previous year. In India, unit sales are expected to be slightly higher than in 2015. And additional unit sales will be generated with the expanded range of FUSO trucks produced in India, especially in Asia and Africa. Mercedes-Benz Vans plans to achieve significant growth in unit sales in 2016. The van division anticipates further significant increases in sales of vans especially in Western Europe, the core market. Significant growth in unit sales is expected also in the NAFTA region. In the context of the division’s strategy, »Mercedes-Benz Vans goes global«, following the successful market launch of the V-Class in China in spring 2016, the new Vito was also launched there in September. This will allow further expansion in the market addressed in that country. Daimler Buses assumes that it will be able to defend its market leadership in its core markets for buses above 8 tons with innovative, high-quality and modern products. However, the bus division anticipates total unit sales in 2016 at slightly below the prior-year level. It is assumed that unit sales in Western Europe will continue to grow at a significant rate. Following the substantial decrease in Brazil in 2015, another significant fall in unit sales is anticipated in 2016. In Mexico, unit sales are now expected to be slightly below the prior-year level. Daimler Financial Services anticipates slight growth in new business and further growth in contract volume in the year 2016, driven by the growth offensives of the automotive divisions. In addition, the division is utilizing new market potential especially in Asia, and is applying new and digital possibilities for customer contacts – in particular by systematically further developing its online sales channels. Daimler Financial Services continues to see good growth opportunities also in the field of innovative mobility services. Outlook for the Group Daimler assumes Group revenue in 2016 in the magnitude of the previous year. Revenue growth is expected in Western Europe and Asia, while revenue in the NAFTA region is likely to be below the prior-year level. On the basis of the anticipated market development and the assessments of the divisions, Daimler assumes that EBIT adjusted for special items will increase slightly in 2016. The individual divisions have the following expectations for EBIT adjusted for special items in the year 2016: – Mercedes-Benz Cars: slightly above the prior-year level, – Daimler Trucks: significantly below the prior-year level, – Mercedes-Benz Vans: significantly above the prior-year level, – Daimler Buses: slightly above the prior-year level, and – Daimler Financial Services: slightly above the prior-year level. The anticipated development of earnings in the automotive divisions will have a positive impact on the free cash flow of the industrial business also in 2016. The free cash flow in the year 2015 was significantly affected by extraordinary contributions to the German and American pension-plan assets of €1.2 billion, as well as by the acquisition of a stake in the digital mapping business, HERE, for an amount of €0.7 billion. As the investment offensive in products and technologies will be continued and intensified, the free cash flow of the industrial business adjusted for special items should be significantly lower in 2016 than the comparable amount of €5.9 billion in 2015. Daimler assumes, however, that it will be significantly higher than the dividend distribution in the year 2016. In order to achieve its ambitious growth targets, Daimler will once again significantly increase its already very high investment in property, plant and equipment in the year 2016 (2015: €5.1 billion). In addition to capital expenditure, the Group is developing its position in the emerging markets by means of targeted financial investments in joint ventures and equity interests. With its research and development activities, Daimler anticipates a total volume significantly above the previous year’s spending of €6.6 billion. Key projects at Mercedes-Benz Cars include successor models for the current compact class, the GLS and GLE SUVs, and the S-Class. In addition, the Group is investing in the automotive divisions in new, low-emission and fuel-efficient engines, alternative drive systems, autonomous driving and the connected and digital user interface. Key projects at Daimler Trucks include the development of tailored products and technologies for the Brazilian market and for the FUSO product portfolio. From today’s perspective, we assume that the size of the worldwide workforce will be at the level of year-end 2015. Other important events The Supervisory Board of Daimler AG has appointed Britta Seeger as a member of the Board of Management, effective as of January 1, 2017. Britta Seeger will be responsible for Mercedes-Benz Cars Marketing and Sales, succeeding to Ola Källenius, who at the same time will assume responsibility for Group Research and Mercedes-Benz Cars Development. Britta Seeger is currently President & CEO of Mercedes-Benz Türk A.S. The Supervisory Board has extended the contract of service of Wilfried Porth as Board of Management member for Human Resources and Labor Relations Director, IT & Mercedes-Benz Vans by five years until April 30, 2022. At the Paris Motor Show, Mercedes-Benz presented its new product brand for electric mobility: EQ. The name EQ stands for »Electric Intelligence« and is derived from the Mercedes-Benz brand values »Emotion and Intelligence«. The new brand includes all the key aspects for customer-oriented electric mobility and goes beyond the car itself. EQ offers a comprehensive electric-mobility ecosystem consisting of products, services, technologies and innovations. The spectrum reaches from electric vehicles to wallboxes and charging services and to home energy storage. A precursor of the new brand is the EQ showcar, which is close to a series version and had its world premiere in Paris. Before the end of this decade, the first EQ series-produced model will be launched in the SUV segment. This will be followed by a model offensive that will gradually supplement the Mercedes-Benz Cars portfolio with electrified vehicles. Daimler Financial Services is making strategic investments in the fleet-management business and is acquiring 100% ownership of Athlon Car Lease International B.V., a subsidiary of the Dutch Rabobank Group. Athlon’s portfolio will be merged with that of Daimler Fleet Management under the Athlon brand. This will create one of the leading providers in the European fleet-management business with a portfolio of approximately 340,000 cars and vans. The transaction is awaiting the required approvals from antitrust and other regulatory authorities, and is likely to be closed in the fourth quarter of 2016. Daimler has made the final decision on a new engine plant in Jawor, Poland, and has signed a contract to acquire land there together with its Polish partners in mid October. The engines will be produced under the roof of the newly established company »Mercedes-Benz Manufacturing Poland« (MBMP). Investment of approximately €500 million is planned in the new engine production in Jawor, which is approximately 70 kilometers west of Wroclaw. Jawor is Mercedes-Benz Cars’ first production facility in Poland. The high-tech factory will produce four-cylinder engines for Mercedes-Benz automobiles. Start of production at the new Daimler site is planned for the year 2019 and construction is to commence in 2017. The worldwide car-sharing community of car2go continues to grow: In September, the company passed the mark of two million customers. The car-sharing provider, a subsidiary of Daimler AG, has thus extended its market leadership in Germany, Europe and the world. The two million customers worldwide include 1.1 million in Europe, thereof more than 550,000 in Germany. Within one year, the number of car2go customers has increased by 43%, demonstrating the rapid growth in the fully flexible car-sharing business. One of the 14,000 car2go vehicles worldwide is rented every 1.5 seconds. Daimler Financial Services is the world´s largest financer of commercial vehicles: Approximately 940,000 commercial vehicles worth some €34 billion are on the road with a leasing, financing or rental contract from Daimler’s finance division. This represents an increase of 8% compared with a year earlier. More than half of the contracts are in the European market. In Germany, over 250,000 or more than 50% of the commercial vehicles with the three-pointed star are financed through Mercedes-Benz Bank. The Daimler commercial-vehicle brands underscored their leading role for connectivity, efficiency and safety with a large number of new products and services at the 66th IAA Commercial Vehicles trade fair in Hannover in September. Mercedes-Benz Urban eTruck, Future Bus and Vision Van provided an outlook onto the future of the transportation industry at the IAA. Daimler Trucks is pushing forward with the systematic connectivity of its vehicles with all parties involved in the logistics and transport process. The fully connected truck will lead to a radical transformation, making the transportation of goods by road even more effective and efficient – not only for drivers, haulage companies and truck manufacturers, but also for society as a whole. In the next five years alone, the company will invest about €0.5 billion in the connectivity of its trucks and the creation of related services and digital solutions. The following table summarizes the special items that affected EBIT in the third quarters of 2016 and 2015: Special items affecting EBIT In millions of euros Q3 2016 Q3 2015 Mercedes-Benz Cars Profit in connection with remeasurement of inventories +46 - Restructuring of own dealer network +41 +21 Relocation of headquarters of MBUSA - +1 Daimler Trucks Workforce adjustments -49 -10 Restructuring of own dealer network +3 -4 Mercedes-Benz Vans Expenses in connection with Takata airbags -7 - Restructuring of own dealer network - -3 Daimler Buses Workforce adjustments -8 - Restructuring of own dealer network +1 -1

Sean Kilcarr, Fleet Owner / October 25, 2016 So by now you’ve no doubt heard about the first “live load” of freight hauled by Otto the self-driving truck (go here and here for more on that.) And while that’s all well and good for the future – if the industry and the general public as a whole actually get comfortable with the idea of self-driving vehicles on our roads – it doesn’t necessary offer a solution to a lot of near-term issues motor carriers now face. The biggest one right now, though, may be freight rates – and things are not looking pretty at all on rate front for truckers right now. John Larkin, head of the transportation & logistics equity research group at Stifel Capital Markets, offered some fairly gloomy analysis where the pricing of freight rates is concerned at the recent Surface Transportation Summit earlier this month. Based on his analysis, Larkin said truckload (TL) pricing in the last 12 months or so, however, “has really fallen apart, particularly in the spot market, where we’ve seen reductions on the order of 10% to 15% and in some cases 20%.” It’s reached the point, in his view, that many small carriers participating in the spot market “are really getting hammered; they’re having trouble making their truck payments and so forth.” And if you’re having trouble making truck payments at the current freight level, I think that trouble will only be magnified by self-driving trucks, which are already predicted to be costlier than the current “human-piloted” models. Larkin added that contract rate pressure really didn’t materialize until early this year, but the pinch on contract rates “really accelerated through” the first half of the year based on his data. “Anybody who tells you that their rates are up year over year is probably telling you a bit of a fib,” he noted. “That would be my sense of it.” Where less-than-truckload (LTL) rates are concerned, Larkin believes they are “holding up quite nicely” as the LTL sector is more consolidated, less fragmented, and the participants are “very disciplined” in terms of rate pricing. But not everyone agrees with that rosier LTL sentiment – even within Stifel’s own shop. For example, Larkin’s compatriot David Ross recently noted that LTL volumes in July and August were poor, with September mixed at best as most of the LTL carriers Ross talked with indicating “continued softness” in freight pricing, while others experienced “further deterioration” in his words. “Any way you slice it, the industrial economy in the U.S. – the main driver of LTL freight – remains weak, if not still in recession, in our opinion,” he said in a research update. “We think overall freight is now at best flat from year-ago levels as we enter the fourth quarter,” Ross added. “Differences in carrier experience are due mainly to geography, customer base, and pricing discipline, in our view. Our optimism for volume recovery in the LTL group this cycle keeps getting pushed out, looking for one more leg higher. And the longer it takes freight to return, the more at risk pricing becomes.” Another issue compounding the “soft freight” environment is the willingness of shippers to revert to what Larkin bluntly describes as “Neanderthal practices.” “I would tell you that there are a couple of different kinds of shippers,” he explained. “There are [those] that we call ‘enlightened’ shippers. They talk about collaboration and partnerships [with motor carriers]. But roughly half of them have reverted back to Neanderthal behavior and they don’t talk much about service anymore. They talk about price.” For example, what that means in practice, Larkin said, is if shippers can save some money by shifting from intermodal to trucking because the spot rates are so low in the trucking market and because fuel prices are relatively low they will go ahead and do that. “That is one of the main reasons why you’ve seen intermodal loadings down year over year, certainly,” he said. A similar “pricing-first” mindset has affected the LTL sector, too, said Larkin. “LTL lost a lot of market share to TL as the big box retailer phenomenon played out,” he emphasized. “People discovered that you could move larger quantities at a much cheaper rate via truckload or intermodal into DCs [distribution centers] and then use, basically, a TL-based dedicated fleet or private fleet carriage to keep the stores properly loaded up with the right goods.” Now, going forward, Larkin thinks with all the regulations coming “down the pipeline” in the U.S. at trucking there will be an inevitable “tightening” of supply and demand, especially as 2017 develops. He believes by the middle to late part of 2017, trucking should see freight rates shift to its favor – what Larkin terms a “pricing upcycle” – if the U.S. economy continues to cook along at a 1.5% to 2% gross domestic product growth rate. We’ll see if that comes to pass. For now, all the industry can do its wait.