P.M. Executive Briefing - Dec. 14
This Afternoon's Headlines:
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Crackdown on Truck Parking Tightens
A zoning amendment to raise the residential truck parking fine to $500 from $200 and enable anyone, not just nearby residents, to file complaints passed the Planning and Development Committee of the Berkeley County (S.C.) Council.Councilman Julius Barnes, who like fellow Democrat Henry Richardson opposed the amendment, said the ordinance should address longtime homeowners who have trucks. But Councilman Charlie Davis, who along with the rest of the Republicans on the committee voted for the amendment, said the amendment will help the majority of people.
Volvo Aero Sells Truck Engine Parts Unit to Finnveden for Undisclosed Sum
Finnveden, an engineering group in Sweden, is to buy Volvo Aero's truck engine parts division, which will become part of the powertrain components operation at Finnveden. The division is being sold because it is not within Volvo Aero's core business. Volvo Aero Executive Vice President Leif Gustafsson said the division has "high production skills" but lacks "the necessary systems competence to develop and deliver complete modules." AFX.COM (12/14/99)UPS Unit to Buy France's Finon
In a move to grow United Parcel Service's European logistics business, UPS Logistics Group reached a deal to buy the Paris company Finon, which performs services related to supply and spare parts. Wall Street Journal (12/14/99) P. B8Michigan Warehouse Firm Expanding Here
Central Warehouse, a provider of trucking and logistics in addition to warehousing and other services, is constructing a $2.4 million Vandalia, Ohio, warehouse. The Saginaw, Mich., company will combine its Dayton, Ohio, business and certain of its Michigan operations in the 78,000-square-foot facility, set to be finished by April. Business News of Dayton Online (12/13/99) ; Bollinger-Thompson, JulieMexico's Dina Plans to Move Into Brazil in 2001
Consorcio G Grupo Dina, a manufacturer of trucks and buses, has finished a restructuring that achieved a 74% debt reduction and will be able to begin production in Brazil in 2001, said corporate finance director Jose Ignacio Moreno Oliveros. He described the planned move as "a little more aggressive" than Dina's 1997 venture into Argentina, where 625 heavy vehicles are built annually by the Mexican firm.The company, which cut its debt via selling assets, postponed its planned 2000 foray into Brazil due to its Mexican consolidation. Reuters (12/13/99)
Fuel Tank Blast Injures Woman
ne of a family-owned trucking company's two tractor-trailers suffered severe damage and a 22-year-old woman sleeping inside it was injured in an explosion in Morrow County, Ohio. A bomb on the fuel tank is suspected as the cause of the explosion, which was still being probed Monday by authorities. Mike and Sue Smith are the owners of the truck. ABC NewsWire (12/13/99)
Investment Firm's Report Jolts Some Arkansas Trucking Companies
Arkansas trucking firms American Freightways and Arkansas Best both saw their stocks drop after a Nov. 23 report by Tim Quillin of Stephens Inc., an investment firm in Little Rock. Out of the 16 transportation companies followed by Stephens, 15 saw their ratings downgraded by Quillin. He cited rising fuel costs; unemployment, reduced corporate spending, and computer problems due to the Y2K bug; "unsustainable" growth in consumer spending; and the hard time trucking companies will have beating their first-quarter 1999 results.After the stocks dropped, Quillin put out new reports on AF and Arkansas Best, calling the 15% Arkansas Best stock drop an "overreaction" and saying fuel costs were not an explicit reason for lowering AF's rating. Both stocks were back up somewhat after that.
The fact that fuel costs were among Quillin's top issues was vexing to AF and Arkansas Best, since fuel costs hit truckload companies harder than LTL firms like AF and ABF Freight System. Quillin said freight volume dropping slightly can change LTL carriers' earnings a great deal, since they are "asset-intensive," with a need for many terminals. But Arkansas Best President and CEO Robert Young III said ABF Freight's chief cost is labor, which can be changed along with demand.
American Trucking Associations chief economist Bob Costello said analysts look for an unrealistic amount of growth, and he said the fuel concern is starting to be covered by surcharges. He added that trucking firms could be helped by manufacturing's strength and said a possible benefit of the shortage of truckers is that rates could rise.
J.B. Hunt Transport Services President and CEO Kirk Thompson said trucking needs higher rates. USA Truck and Cannon Express were less concerned. Arkansas Democrat-Gazette Online (12/12/99)
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