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March 18, 2016

Cat Scratches Trucks

Caterpillar has pulled out of the truck making business. Supposedly, it's one of the casualties of the beleaguered construction equipment manufacturing company in a time of worldwide construction downturn, much in the wake of the oil glut for which the rest of us are very grateful. But not for the 70 or so Cat employees affected by the decision to end truck production.

The announcement was made by my old mate Ramin Younessi, vice president of Caterpillar’s Industrial Power Systems division.

“Remaining a viable competitor in this market would require significant additional investment to develop and launch a complete portfolio of trucks, and upon an updated review, we determined there was not a sufficient market opportunity to justify the investment,” he said. “We have not yet started truck production in Victoria [Texas], and this decision allows us to exit this business before the transition occurs.”

It comes as little surprise for, despite the undoubted quality of the Cat CT models, they have been very slow to sell. Caterpillar launched the three-model vocational truck range in the North American market in 2011, working with Navistar on design and manufacture and using the ill-fated MaxxForce 13, 12.4-liter engine.

It was based on the International PayStar and built under contract by Navistar at its Garland, Texas, facility. It moved to Saltillo, Mexico with Navistar, then it was to move again to a Cat plant in Victoria this year.

Production never really got into gear. Supposedly the line was running at 1100 to 1200 units annually, around four per day. This is in sharp contrast to mainstream truck manufacturers who look for 100 units per day.

A further nail in the CT coffin was recently driven with the launch of Navistar’s new HX replacement for the Paystar, which added to the bleak future for CT sales.

Incidentally, I've known Younessi, since the launch of the Freightliner Coronado in early 2001. Coronado was a personal project of Jim Hebe’s when he was president of the company. Younessi was a get-things-done engineer back then and later became a blue-sky strategist for Daimler Trucks in Stuttgart. I actually bumped into him when boarding a plane in Germany as we were flying back from the IAA Show and we caught up. He was briefly back in Portland as chief engineer but left for a senior engineering role at Navistar. On one memorable occasion, we took a pair of the huge, truck-based International CXT pickups on the famous Detroit annual cruise on Woodward Avenue. Those trucks were the darlings of the crowd.

A casualty of the MaxxForce debacle, Younessi moved to Caterpillar most recently and is now a vice president.


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