By Bob Tita And Tess Stynes
Caterpillar Inc. 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.
The plan was previously reported by The Wall Street Journal.
Caterpillar, the world's sales leader in off-road construction
machinery, has been selling the on-road trucks built by Navistar
since 2011. Beginning in the first half of next year, 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, the company said in a news release
Tuesday.
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
move 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 also would add work for the Texas plant at a
time of falling demand for the construction excavators it was set
up to manufacture.
Separately, Navistar said it would launch a new line of its own
trucks starting early next year, leveraging shared technology and
intellectual property from the venture with Caterpillar.
Both companies "will have the opportunity to leverage certain
joint intellectual property, collaborate with suppliers and utilize
licensing agreements moving forward," Navistar said in a news
release.
Navistar said it plans to release additional details about the
planned truck line in coming months.
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.
Write to Bob Tita at robert.tita@wsj.com and Tess Stynes at
tess.stynes@wsj.com
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