Anniversary gift

Blue Diamond partnership produces another year of happy returns

Article December 16, 2002
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The year 2002 is nearing an end, and "thank
goodness" is the reaction of some in truck operation and manufacturing. Others
are sorry to see the year passing into history.

The year 2002 is already in the record book as one in which
many of the things that could go wrong in truck making and operation did go
wrong. It has left many hoping for a change of pace as the calendar moves into
the holiday season.

Line dancing

Putting the emphasis on the positive to start, there are two
truck lines with a lot to be excited about in the new year ahead. They are Ford
and International, equal partners in Blue Diamond, a joint venture set up to
serve the Mexican truck market for openers.

Right now it looks like Ford will have as many or more
exciting new truck models from the Blue Diamond connection in the near future
as any competing truck line from any source. It's all a matter of how models
are counted, but International is right behind Ford.

The move to the Blue Diamond arrangement got started in the
late 1990s when Ford sold its heavy-truck business to Freightliner Corp. and
moved its medium-truck operation to Mexico.

That led to the Blue Diamond partnership. In the split of
the start-up costs International put in a fairly new truck factory in Mexico.

Ford's key moves were to start development of new
medium-duty models to be built in that plant plus a new automatic transmission
for trucks to be made in Ohio.

By last fall's Dallas truck show, Ford had a family of new
Class 6 and 7 medium-duty models ready for unveiling. They go on sale in
January as 2004 models.

At a time when the competition will apparently have little
new to sell, they will tempt buyers with a choice of a Ford Power Stroke diesel
turning out 210 hp, Caterpillar diesels delivering 190 to 300 hp and Cummins
diesels turning out 185 to 260 hp.

Promised by Ford for some time in the future are
low-cab-forward units, a specialty that is widely used around the world for
urban delivery hauling, a market that is growing out of sight.

While a bit behind Ford in new-model introductions,
International is well advanced in unveiling a family of high-performance trucks
that has been showing up among U.S. offerings. Featured is a new International
V-8 diesel that turns out up to 230 hp.

Recovery efforts

Although there were some soft spots in the U.S. economy in
early 2002, the demand for truck services and new-unit purchases held up fairly
well.

Then a negative reaction to an Oct. 1 tightening of diesel
exhaust emission rules set in, and it seemed like everything came unwired at
about the same time.

Difficulties in the truck field were blamed on rising
insurance rates, soaring fuel costs, the threat of war with Iraq, chaos in the
stock market and, that old standby, the shortage of skilled drivers.

In addition, there have been declines in output at truck
chassis and diesel engine factories, compounded by a West Coast dock strike and
other developments that have reduced the goods to be moved by truck.

So what has to happen to restore the truck field's health?
One benefit is already scheduled. After this year's Oct. 1 move, the next
tightening of exhaust rules by the federal Environmental Protection Agency is
now set for almost a decade in the future.

On the negative side, diesel fuel prices went up again this
fall, but that frequently happens when production of fuel for home heating is
increased.

Court action that stopped the Pacific Coast dock strike and
some other developments on the truck scene increased some trucking activity and
even led to some boosts in truck-freight rates.

There also were some late fall gains in truck-related
business activity which toned up the market outlook. Both the Canadian and
Mexican economies appeared to be stronger than the big U.S. economy in the
middle, giving U.S. truck export activity an unexpected boost.

Nothing helps truck sales more than new models, and Ford and
International aren't the only producers helping in this way.

The two GM lines have added to this type of spark by
promoting all-new Top Kick and Kodiak models. They are now on sale as 2003s.

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