Caterpillar to Build Its Own Vocational Trucks in U.S., End Navistar Cooperation

[kscarbel2]

Wall Street Journal / July 28, 2015

Caterpillar said Tuesday that it plans to build its own line of dump trucks at a plant in Texas and wind down an existing arrangement it has with engine maker Navistar International Corp. to build the trucks.

Caterpillar has been selling the on-road trucks built by Navistar since 2011.

Beginning in the first half of 2016, Caterpillar expects to begin assembling the trucks at its plant in Victoria, Texas. The plant opened in 2012 to assemble excavators that had been built in Japan and imported to North America.

Bringing the truck family into Caterpillar is expected to add roughly 200 jobs at the Texas plant, which also will continue produce hydraulic excavators, according to Caterpillar.

The Navistar-built, Caterpillar-branded trucks haven't been a big hit with truck buyers. Sales of the three truck models have averaged about 1,000 total annually for the past three years.

The change could help Caterpillar more effectively leverage its reputation with the construction industry for high-quality machinery, because customers will know it is making the trucks.

Building the trucks itself would also add work for the Texas plant at a time of falling demand for the construction excavators it was set up to manufacture.

Navistar has been building the Caterpillar trucks at plant in Mexico.

Navistar plans to introduce a premium version of the PayStar next year, leveraging shared technology and intellectual property from the venture with Caterpillar, as it tries to revive its slumping market share in heavy-duty trucks by emphasizing vehicles for vocational and specialty applications.

Both companies "will have the opportunity to leverage certain joint intellectual property, collaborate with suppliers and utilize licensing agreements moving forward," says Navistar.

Navistar said it plans to release additional details about the planned truck line in coming months. (http://www.bigmacktrucks.com/index.php?/topic/41133-international-truck-to-introduce-new-line-of-premium-vocational-trucks-as-navistar-caterpillar-conclude-severe-service-truck-agreement/)

The Caterpillar-Navistar partnership was devised in 2009 with ambitious goals to market Caterpillar-branded trucks in several overseas markets through Caterpillar dealers. Those plans were mostly scaled back when sales of the trucks were anemic in North America.

Related reading - http://www.drivecat.com/blog/2015/08/truck-manufacturing-moves-to-u-s-caterpillar-facility/

[kscarbel2]

Caterpillar to build trucks on its own

Fleet Owner / July 28, 2015

It’s the beginning of the end for the nearly six-year truck-building partnership between Caterpillar and Navistar, as the heavy equipment maker expects to start building vocational trucks on its own beginning next year.

The company noted that it will begin independently designing and manufacturing its CT line of vocational models at its plant in Victoria, TX; a facility that originally opened in 2012 to produce hydraulic excavators. Navistar currently manufactures those trucks at its Escobedo, Mexico, plant.

“The on-highway vocational truck product family is important to our product line; customers like our trucks and want to include them in their fleets in a variety of heavy duty applications such as dump trucks, mixers, haulers or one of the other configurations we offer,” noted Chris Chadwick, director of the Caterpillar’s global on-highway truck group, said in a statement. “Our updated strategy reaffirms our commitment to grow and develop our presence in the vocational truck industry moving forward.”

Caterpillar partnered with Navistar back in 2009 to build what became a three-truck product line for the North American market, starting with the CT660 in 2011 and finishing up with the CT680 back in March this year.

“We appreciate the collaboration we have had with Navistar,” Chadwick said. “As we look to future launches of new truck models, this updated strategy will better position us to help provide our customers with the best products and services for this market.

The company added that the “transition process” will begin immediately, with truck production at the Victoria factory expected to begin in the first half of 2016. Caterpillar added that it will continue to produce excavators at the Victoria plant, adding around 200 new jobs at the facility to handle truck manufacturing needs.

Chadwick added that Caterpillar dealers will continue to sell and support Cat vocational trucks as well.

The Wall Street Journal noted that sales of Caterpillar’s vocational truck have only numbered around 1,000 annually; a number Caterpillar hopes to boost significantly by bringing production of those vehicles in-house.

The newspaper added that company also plans to build its own line of truck engines to power its CT models – a line of business it exited back in 2008 due to the imposition of restrictive federal exhaust emission standards.

For its part, Navistar said it plans to launch a new line of “premium vocational trucks” in early 2016, leveraging “shared technology, intellectual property, supplier collaboration and licensing agreements” developed during its partnership with Caterpillar.

“Navistar and Caterpillar have had a strong, collaborative working relationship through a number of projects and partnerships for many, many years,” noted Bill Kozek, president of Navistar Truck and Parts, in a statement.

“This next phase provides Navistar with an exciting opportunity to introduce new technologies and product features into our new line of premium vocational trucks that we’ll launch in 2016,” he added.

Kozek also stressed that Navistar will continue to manufacture trucks for Caterpillar through December 31 of next year as Caterpillar brings its Victoria, TX, plant up to full speed.

[kscarbel2]

Cat Trucks to Initially Continue as Built by Navistar

Heavy Duty Trucking / July 28, 2015

Caterpillar’s go-it-alone vocational truck series will be virtually identical to current Cat Trucks for some time, using the same components as now until changes come about in the future, according to CAT executives, clarifying after the earlier announcement that the company will end the manufacturing agreement that has Navistar building the trucks at its plant in Escobedo, Mexico.

“Initially they will be exactly the same as the trucks produced by Navistar today,” explained Ron Schultz, sales and product support manager. That should continue for the first 12 to 18 months after production begins sometime next year at Cat’s plant in Texas.

It means continued use of the Navistar-supplied 12.4-liter CT13 diesel, as well as the cab and chassis whose designs were adapted from components shared with the International PayStar.

No Cat Engines

“We anticipate that an announcement on a 15-liter engine will be made soon,” said Dave Schmitz, vocational truck product manager, repeating a statement of several months ago. But “Caterpillar has no plans to get back into the truck-engine market,” so the source of that engine remains confidential.

“Velocity and speed to market for changes, and better ability to respond to customer requests” for improvements comprise the reason for the shift to Cat producing the truck itself, said Chris Chadwick, director of Caterpillar’s Global On-Highway Truck Group. However, Caterpillar was not unhappy with the Navistar relationship, and the supplier agreement remains in force.

"Made in America" sentiment did not enter into the decision to pull assembly into the U.S., "but it's a plus," said Chadwick.

Navistar will continue building Cat Trucks until the end of 2016, and during that time Cat will begin phasing in its own truck production at a plant in Victoria, Texas, north of Corpus Christi.

The plant opened in 2012 to produce hydraulic excavators, and will be equipped and 200 workers added to build the Cat on/off-road vocational product line.

Cat wants to expand the Cat Truck line into more applications, particularly for versions powered by the upcoming 15-liter diesel, Chadwick said. Cat dealers who sell and service the trucks will remain vital to the endeavor.

Navistar: 'Niche Product'

For Navistar, the Cat Truck was “a niche product, maybe 1,000 or 1,100 a year,” said spokesman Steve Schrier.

Navistar’s plans for a new “premium” line of International severe-service trucks, which the company announced today, might be revealed later this year or next year.,

“We were in that premium vocational market years ago, but we left it after we had no 15-liter engine,” Schrier explained, when Navistar decided not to use the Cummins ISX15 with SCR in 2010 and later dropped its own 15-liter. “Now that we have a 15-liter [from Cummins] again, we’ll go back to it. And of course we’ll still use our own N13 engine.”

The collaboration with Cat gained Navistar access to design knowledge about premium details, including cab interior components, that could be used in the upcoming International model, Schrier said. He declined to add more specific details.

[kscarbel2]

Commercial Carrier Journal / July 28, 2015

Caterpillar made the decision to bring its truck production in-house, says Cat’s Chris Chadwick, to better serve its yellow-iron oriented customer base. “There is a lot of integration throughout our construction equipment line,” he explains. “And it will be a lot easier for us to continue to fully integrate our trucks with our construction machinery if we take full control of the manufacturing process. It also better places us to serve our customers’ needs in a quicker and more satisfactory manner.”

The break with Navistar is significant, Chadwick notes, but not absolute. “The majority of the truck parts used on our CT Series our outsourced from various suppliers and we will purchase and use the very same components with our truck that Navistar does today,” he says.

One exception, however, is under the hood. Noting that Caterpillar has “no plans” to re-enter the on-highway engine business, Chadwick says for now, Caterpillar will continue to spec the Navistar-built CT13 13-liter diesel engine for its C-Series trucks. “The big hole for us right now is obviously the lack of a 15-liter engine,” he says. “But we have a strategy in place to add a 15-liter option before year’s end and will offer more details on that in the fall.”

Chadwick says the addition of the 15-liter engine option will close out the primary phase of Cat’s C-Series product launch. “From that point, we’ll begin the process of new features and technologies to continue to build the brand.”

Those efforts will see increased sales efforts in Canada and Latin America, he notes, while Caterpillar will continue to monitor truck markets around the world to seek additional overseas sales opportunities if they make sound financial sense.

“Caterpillar is in a unique position to serve the construction industry,” Chadwick explains. “There isn’t another truck OEM out there that can tie one set of solutions for construction machinery to its on-highway solution the way we can. Coupled with the significant competitive advantage offered by our dealer network, we felt this move was the best way to leverage all of these assets and make sure we continue to offer the best vocational truck options available to our loyal customer base.”

[kscarbel2]

Cat Trucks in Australia has announced that Navistar will continue to manufacture and develop Cat Trucks for the Australian market for the foreseeable future.

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[RoadwayR]

With the loss of the Blue Diamond and now Caterpillar it's a safe bet Navistar will go after a GM joint venture to fill the assembly line in Escobedo.

[Red Horse]

All of which supports Cat's position that ..."You CAN make a silk purse out of a sow's ear"!

[MackMann85]

I would like to get the kscarbel take on this....seems confusing to me strategically.

Move away from Navistar production (could lower cost, perhaps less margin included from NAV), only to move to USA (american production good) at a plant not making trucks (more labor and tooling, adds cost to product). Quality could go either way (built in USA but no truck experience), but they are still using NAV components and chassis. A new 15L engine, but they dont want to get back into engine business (does that only leave the ISX and DD15?). And all announced in a press release that seems about a year too soon. What a mess!

[Red Horse]

I would like to get the kscarbel take on this....seems confusing to me strategically.

Move away from Navistar production (could lower cost, perhaps less margin included from NAV), only to move to USA (american production good) at a plant not making trucks (more labor and tooling, adds cost to product). Quality could go either way (built in USA but no truck experience), but they are still using NAV components and chassis. A new 15L engine, but they dont want to get back into engine business (does that only leave the ISX and DD15?). And all announced in a press release that seems about a year too soon. What a mess!

Agree on hearing KSC's view. Also agree with your last statement..."what a mess".

And how about this statement..."“And it will be a lot easier for us to continue to fully integrate our trucks with our construction machinery if we take full control of the manufacturing process. It also better places us to serve our customers’ needs in a quicker and more satisfactory manner.”..Marketing 101 bullshit at its finest!

Let's see, they are building it in a plant that "assembles" excavators built in Japan! Lot of commonality of manufacturing there right? And while I too like the idea of American labor, how can you argue with the synergisms of using the less than utilized resources of Navistar's Escobedo Mexico Plant. They lost the Ford 650/750 volume, this should have fit Navistar like a glove.

I always say, you could paint a pile of dog poop "Cat Yellow" and guys would stand around and say.."isn't that the nicest pile of dog p[oop you have ever seen?"

Plain and simple it seems to me that Cat thinks they are going to capitalize on that brand loyalty factor to carry the day for them as they get into the HD truck business. Even though I think it is safe to say after 3 years of trying to crack the market, the only thing it seems to me they have created is a bad taste for the Cat truck brand.

And as far as the loyalty factor, do they think it is going to be easy to break the loyalty factor the industry has for Mack? KW? Pete? F'liner? and yes International-ok Navistar? Those boys will not roll over and play dead.

Bottom line, discarding the marketing BS I can't really see any real strong business case for this being a success. IMO, three years from now we will be reading...."after much consideration, Cat has decided to exit the on highway truck business in order to focus its energies on its core business".

[Dirtymilkman]

Cat doesn't make their own excavators. I believe it's Hitachi in Japan that builds them and sends them here for assembly. Hence why the "factory" is so close to port.

[Red Horse]

Cat doesn't make their own excavators. I believe it's Hitachi in Japan that builds them and sends them here for assembly. Hence why the "factory" is so close to port.

I believe they do both-some are built by others, while I believe others are 100% Cat. I know for a fact some of the real small machines (mini's) are Wacker-Neusum (sp?). Not sure about others. You are probably right on Hitachi as for sure some Deeres are built by Hitachi.

[Dirtymilkman]

I misspoke, Mitsubishi builds them.

[220cummins]

The joint venture sounded like a dud 6 years ago and still does even with the announcement.

[kscarbel2]

"MAYBE" a CAT truck with a CAT engine would have worked. CAT doesn't make road engines anymore so good luck to them. Badge engineering doesn't have a good track record.

There are two CAT truck stories going on in the world. Down in Australia where CAT long-haul trucks are being marketed, the Navistar version of the MAN D26 is available (dubbed CT13), BUT the engine they are actually promoting is the CAT C15........and that's a "road engine" as you say.

I've had little interest in the North American CAT vocational truck effort because, frankly speaking, the CT660 looks like a Tonka toy (Having said that, the newer CT681 looks purpose designed, if somewhat dated in appearance), and CAT U.S. flubbed the launch.

But the effort in Australia is being attempted in the right way. I can't predict the future for CAT Australia, but my hat is off to the people down there.

http://www.cattrucks.com.au/trucks/ct630hd/#tab=3

http://www.cattrucks.com.au/wp-content/uploads/2013/11/P30669_Engine_Spec_Brochure_A4-Low-Res.pdf

http://www.cattrucks.com.au/wp-content/uploads/2014/10/P40006_CAT_Brochure_r6.pdf

http://www.cattrucks.com.au/category/testimonials/

[kscarbel2]

Interesting CT660 4x4 chassis.

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[Red Horse]

46 minutes ago, kscarbel2 said:

Interesting CT660 4x4 chassis.

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Hmnn-no leaves on the trees!  this video is how old?  Very nice Maintainer service body-no comment on the CAT truck.  However old the video is, I guess if you have a dog sitting on your lot that no one wants, you might as well use it yourself?😎

[kscarbel2]

1 minute ago, Red Horse said:

Hmnn-no leaves on the trees!  this video is how old?  Very nice Maintainer service body-no comment on the CAT truck.  However old the video is, I guess if you have a dog sitting on your lot that no one wants, you might as well use it yourself?😎

The video was published April 27, 2016. I liked the all-wheel-drive spec, shown on pages 31 thru 37, 46 and 52.

http://s7d2.scene7.com/is/content/Caterpillar/C10781420

[Red Horse]

10 minutes ago, kscarbel2 said:

The video was published April 27, 2016. I liked the all-wheel-drive spec, shown on pages 31 thru 37, 46 and 52.

http://s7d2.scene7.com/is/content/Caterpillar/C10781420

Thx Kevin.  It actually surprises me that the used "new" ones I see in the used truck rags have as high an asking price as I'm seeing-then again you can always "ask".  Again what a formula for disaster-a marriage of two firms that both managed to piss off a whole lot of customers over engine issues-then they decide to get together!