Executive Briefing - Sept. 4
- Ford to Lay Off Workers at Ohio Plant
- Compaq, HP Announce Merger
- Bush Puts Economy on Top of ‘To Do’ List
- Mexico’s Fox to Visit the U.S.
- Export Volumes to Asia Lower
- Speculation on OPEC Cut Lowers Crude Prices
- Volvo Offers Environmental Data
- Daimler Pessimistic on U.S. Truck Market
- Volvo to Lay Off 900 From Mexican Bus Unit
- Trucks Gain Business as Air-Cargo Volume Falls 9.3%
- Visteon to Supply Mercedes Trucks
- Fed Ready for More Rate Cuts, Paper Says
- Compaq, HP Announce Merger
Ford to Lay Off Workers at Ohio Plant
Ford Motor Co. will lay off as many as 300 employees indefinitely at an Ohio transmission plant because of slow sales of the sport utility vehicles, vans and pickup trucks, Bloomberg reported.
Pickups and vans are used in a wide variety of commercial trucking applications, especially among utility fleets and other service-oriented businesses.
The workers at the factory in Sharonville, Ohio, will be laid off starting Sept. 17 until sales improve. Earlier this year, Ford idled 250 workers at the plant, though all but 64 have since been recalled.
In other news, the National Highway Traffic Safety Administration has launched an investigation of an estimated 437,000 Ford Expeditions after receiving more than a dozen reports of suspension problems, according to Reuters. Transport Topics
Compaq, HP Announce Blockbuster Merger
Computer giant Hewlett-Packard Co. announced the purchase of rival Compaq Computer Corp. for $25 billion in stock Monday.
The merger could result in up to 15,000 job cuts, the Associated Press reported. This would be on top of previously announced cuts of 8,500 at HP and 6,000 at Compaq. Combining these two companies will result in fewer computers being made, which means fewer deliveries for the trucking companies that ship these computers.
The merged company, which will retain the HP name, and is expected to be the world’s largest vendor of personal computers, overtaking Dell Computer Corp. It also is expected to rival IBM in total revenues, with an estimated $87.4 billion.
The deal will require the approval of both shareholders and antitrust regulators. Spokesmen for the company said they expect the deal to be finalized by the first half of 2002, news services reported.
( for the full press release.)
Bush Puts Economy on Top of ‘To Do’ List
/h4>For the first time in his young administration, President Bush has placed the economy at the top of his list of priorities.
In speeches to organized labor groups in Wisconsin and Michigan on Monday, Bush was very focused on how to reverse the course of the U.S. economy, news services reported.
Bush told separate labor groups that he was planning to ease the plight of the American worker and that he intended to do something about the U.S. economy, Reuters said. Bush said that his tax relief plan was the right thing to do at the right time and he would strongly fight against tax hikes to make up for lower surplus estimates.
In meetings this week with Sen. Trent Lott (R-Miss.), Sen. Tom Daschle (D-S.D.) and Rep. Dick Gephardt (D-Mo.), Bush is expected sidestep any potential stalemates over the federal budget, the Associated Press reported.
The Congress returns from its summer recess to work on 13 different spending bills which are needed to keep the government running after Sept. 30, according to the AP. Transport Topics
Mexico’s Fox to Visit the U.S.
Mexican President Vicente Fox arrives in Washington on Tuesday night and will be the guest at President Bush’s first state dinner later this week.Although Fox’s biggest topic during his visit with Bush and at a joint session of the U.S. Congress will be immigration, other areas of discussion will include trade and cross-border trucking.
Mexican Foreign Affairs Secretary Jorge Castaneda said that the country has changed its image, and Fox will show this week that Mexico is ready to participate in global affairs. Transport Topics
Export Volumes to Asia Lower
Weak demand in Asia and the potential for the downward slide to continue are hurting exports to Asia, JoC Week reported.Lower export volumes translate to fewer shipments for trucking companies carrying goods to the West Coast.
The export rut has led to lower freight prices, some so low that some shipping lines are losing interest in certain types of cargo. Currently import shipments from Asia are outpacing exports to the region by 2 to 1, the magazine said.
The most commonly shipped items now are paper and scrap metal, as opposed to higher priced agricultural products. Transport Topics
Speculation on OPEC Cut Lowers Crude Prices
Speculation that the Organization of Petroleum Exporting Countries may not make its planned 1 million barrel cut in production quotas drove the crude oil prices down in trading on the New York Mercantile Exchange, according to Bloomberg.Crude oil prices are important to the trucking industry because they directly affect the prices of diesel fuel and motor gasoline. Prices for October delivery of crude fell 1.1% to $26.90 per barrel – 20% lower than this time last year.
Oil ministers from the 11-member cartel are scheduled to meet on Sept. 26. Transport Topics
Volvo Offers Environmental Data
Volvo Trucks is introducing environmental product declarations for its heavy-duty FH and FM truck models to make it easier for purchasers to assess the environmental impact of the various models.
The information, which covers the total impact, takes into account raw materials, production and recycling, and will be available on the Volvo Web site.
As an example, the press release noted that the fuel consumption of trucks and other heavy-duty vehicles varies sharply, depending on equipment, load and driving conditions.
The environmental product declaration is based on the user entering his own consumption figures, after which the system calculates the environmental impact in the form of emission values, total climate effect and pollution potential. Transport Topics
( for the full press release.)
Daimler Pessimistic on U.S. Truck Market
The world’s largest maker of commercial trucks is not optimistic about a recovery in the world market for heavy trucks, Bloomberg reported.
DaimlerChrysler AG, manufacturer of Freightliner trucks, said it does not expect a rebound in sales in any of its major markets during 2002. The company expects U.S. sales to fall to 155,000 vehicles this year, down from nearly 300,000 two years ago, Bloomberg said.
The company also expects the sales slump to continue in Turkey and Western Europe. In spite of this, DaimlerChrysler still expects its commercial vehicle division to show an operating profit, excluding a one-time charge from the writing down of used trucks.
Meanwhile, Freightliner is expected to disclose a restructuring plan before the end of 2001.
Eckhard Cordes, who is responsible for DaimlerChrysler's commercial vehicle operations, declined to offer details of the plan, but said it is unlikely to involve substantial further job cuts. Transport Topics
Volvo to Lay Off 900 From Mexican Bus Unit
Volvo AB will lay off 900 employees at its Mexican bus operation to adapt capacity to current market conditions.
In a press release issued Tuesday, Volvo said an order for 900 buses had been taken in 1999 and recently been completed. Now that it is done, the current weakness of the Mexican economy requires that production levels be balanced.
Called Bus de Mexico, the company had 2,550 employees making a bus designated 7550 before the cutbacks. Transport Topics
( for the full press release.)
Trucks Gain Business as Air-Cargo Volume Falls 9.3%
Air cargo volume declined 9.3% in July, its steepest decline since the U.S. economic slowdown began last year, the Wall Street Journal reported.While this decline is a bad sign for the economy because it shows a fall in production, there is a silver lining for trucks – the Air Transport Association attributed part of last month’s decline to more manufacturers shifting deliveries to trucks to save money.
Scheduled air-freight traffic declined to 1.81 billion revenue ton miles in July from two billion a year earlier. The results are for 17 main air carriers, including United Parcel Service and FedEx. Transport Topics
Visteon to Supply Mercedes Trucks
Visteon Corp. has concluded an agreement to make instrument panels, audio systems and truck cockpits for DaimlerChrysler AG’s Mercedes-Benz truck division.
Visteon’s press release said the company is the largest instrument panel manufacturer in the world, and will supply the truck cockpits form its facilities in Rougetoutte, France. and Sao Paolo, Brazil.
The relationship between the two companies began last year, when Visteon started supplying 24V audio units for installation in Actros and Atego model trucks. Transport Topics
( for the full press release.)
Fed Ready for More Rate Cuts, Paper Says
The Federal Reserve is ready to continue cutting interest rates until there are signs of a recovery, the Wall Street Journal reported on Tuesday.If a cut in interest rates leads to more spending by businesses and consumers, it will force manufacturers to increase production. That, in turn, pushes up the demand for the services of trucking companies.
Fed members, attending an economic conference in Wyoming, did not speak formally speak about Fed policy, but the Journal said informal talks outside of the main conference area surrounded the current U.S. economic situation.
The report said that officials expressed great uncertainty over the course of the economy, and they are still waiting for business investment and consumer spending to increase again. Transport Topics