A.M. Executive Briefing - Dec. 18
- Volvo, Renault Merger Nod Expected Monday
- Freightliner Workers Approve Contract
- Fed's Interest Rate Policy Draws Spotlight
- EPA Prepares to Issue Final Diesel, Engine Rules
- NTSB Chairman Hall Retiring Jan. 18
- USF Worldwide Gets New CEO
- ABF's Stubblefield To Chair Motor Freight Carriers
/A>
- 4Q Chrysler Loss of $1.2B Hitting DaimlerChrysler
- General Motors Plans More Cutbacks
- Gillette Closing Plants, Cutting Jobs
Volvo, Renault Merger Nod Expected Monday
U.S. antitrust approval is expected Monday for truck maker Volvo AB's (VOLVY) acquisition of Renault SA's (13190-PAR) truck unit, Bloomberg News reported citing the Swedish newspaper Dagens Industri.Conditional approval by European authorities was granted in September, Bloomberg noted.
Volvo's U.S. market share would more than double - going to 24%, Bloomberg said. The acquisition is estimated to produce annual cost savings of $363 million, the news service reported. Transport Topics
Freightliner Workers Approve Contract
Freightliner's Mount Holly, N.C., truck plant has a new three-year union contract, after a strong favorable vote by workers on Sunday, the Associated Press reported.The company had threatened to close the plant and move production to Mexico if members of the United Auto Workers did not approve it.
The new contract has some gains for unions - such as first time supplemental unemployment benefits for laid-off workers and accumulation of seniority by employees who are laid off or on medical leave, according to AP.
New health and safety protections are also included, Bloomberg News reported. On Monday, the first effective day of the new contract, top pay was scheduled to rise to $21 an hour, and wage increases will total $2.40 over three years for top scale work-ers, Bloomberg reported.
It is the only Freightliner plant represented by the UAW, the Wall Street Journal reported Monday. Under the new contract, if workers are laid off, they will get six months of health insurance, but no wage guarantees, the paper reported.
Also, the contract contains no prohibition on outsourcing, the Journal said. Transport Topics
Fed's Interest Rate Policy Draws Spotlight
Amid a flurry of signals that the U.S. economy could be slowing too much, the Federal Reserve's posture on setting interest rates will dominate the week's economic news.Whatever the Fed decides will affect trucking, both by determining the level of rates paid on equipment debt by fleets and owner-operators and by shaping the pace of economic activity that feeds trucking shipments. Rates set solely by financial markets are already weakening, but the Fed's money-creation policies fix the range of most short-term rates and guide others such as banks' prime lending rate.
Fed Chairman Alan Greenspan in a recent speech signaled that the Fed's focus has now shifted to making sure the economy does not weaken too much, from an earlier emphasis on slowing the economy from a capacity-straining pace.
Greenspan meets Monday with President-elect George W. Bush, who has also been touting his proposed tax cut as a way to boost longer-term economic growth. However, analysts point out that only the Fed can act quickly enough to keep the economy from stalling out in coming months.
On Tuesday, the Fed's policy-setting Federal Open Market Committee huddles in one of its normal meetings, and announces its latest policy stance in early afternoon. Most analysts expect the FOMC will officially make a mid-course correction that lays the basis for a rate cut early next year.
However, more and more analysts are suggesting that the Fed should cut rates now because the slowdown could turn into a recession or something close to one. In recent days, production cutbacks were announced by General Motors Corp. (GM) and appliance maker Whirlpool. Meanwhile, giant package delivery companies United Parcel Service (UPS) and FedEx (FDX) have said their volumes are about flat with 1999 in the busiest shipping season of the year. Transport Topics
EPA Prepares to Issue Final Diesel, Engine Rules
The U.S. Environmental Protection Agency is expected to issue final rules this week on the amount of sulfur to be allowed in diesel fuel in 2006, and on new engine standards for 2007. The rules could be issued as early as Dec. 20, said an EPA spokesman.EPA proposed the rules in May, citing public health concerns. The agency wants refiners to remove 97% of the sulfur in diesel fuel, forcing the petroleum industry to spend billions of dollars in attempts to come up with the new fuel by June 1, 2006.
Engine makers will have to use "after-treatment" soot traps and catalysts to remove particulate matter and nitrogen oxides emissions, to produce cleaner engines in 2007. An engine company representative said there is no guarantee that the technology will work. Engine makers are in favor of the lower sulfur fuel, however. John Wislocki, Transport Topics
NTSB Chairman Hall Retiring Jan. 18
National Transportation Safety Board Chairman Jim Hall said he would retire Jan. 18, in time for President Clinton to name a temporary Democratic replacement, the Washington Post reported Monday.NTSB Vice Chairman Carol Carmody is likely to become acting chairman, the paper said, noting that American Airlines Vice Chairman Bob Baker is a possible permanent replacement.
Former board member Susan Coughlin is also a potential candidate, as is longtime board member John Hammerschmidt, the Post reported.
Among Hall's accomplishments were a 24-hour communications center for NTSB, and a push for better flight data recorders on aircraft. Hall has also advocated black boxes for trucks, and pushed for other electronic safety devices on commercial vehicles.
i>Transport Topics
USF Worldwide Gets New CEO
USF Worldwide has appointed John Gallahan as its president and chief executive officer, the company announced Friday.USF Worldwide provides domestic and international freight forwarding services and is a business of unit of USF Worldwide Logistics. Import and export air and ocean services, as well as customs brokerage services, are offered by the company.
Gallahan is a veteran of the air freight industry who joined Air Express International in 1980. He has also worked for a shipper, serving as the president of a Virginia pharmaceutical company in 1995, bringing four new products to market, USF said. Transport Topics
ABF's Stubblefield To Chair Motor Freight Carriers
David E. Stubblefield, ABF Freight System's (ABFS) president and chief executive, has been named the new chairman of the Motor Freight Carriers Association.Stubblefield helped start MFCA, which represents unionized trucking companies. The National Master Freight Agreement is major factor in that realm.
He plans to work with the International Brotherhood of Teamsters on programs like the "No-Zone" initiative, to persuade other drivers to keep a safe distance from trucks.
Stubblefield also plans to work with shipper groups on issues like the proposed hours-of-service changes. Transport Topics
4Q Chrysler Loss of $1.2B Hitting DaimlerChrysler
DaimlerChrysler AG (DCX) warned that its Chrysler division could run up a loss of $1.2 billion in the fourth quarter, the Associated Press reported Monday.This loss would be twice the size of the one it suffered in the third quarter, which was the first time in years that Chrysler bled red ink, according to AP.
Although Chrysler is primarily a maker of cars and minivans, the parent company owns major heavy-truck maker Freightliner. Certain models of Dodge pickup trucks are favored by commercial users.
A restructuring plan is due in February, but DaimlerChrylser's overall earnings for the year will be hurt, Juergen Schrempp, chief executive, warned shareholders in a letter, AP reported.Transport Topics
General Motors Plans More Cutbacks
In a move that could ripple throughout the U.S. economy and disrupt numerous trucking operations, vehicle manufacturing giant General Motors Corp. (GM) is planning extensive cutbacks, the Wall Street Journal said Monday.Last week, GM said it would terminate its Oldsmobile line and close 15% of its European capacity. But the Journal said that was just the start of what will be a wave of cuts. By 2004, the newspaper said, GM wants to slash its current lineup of 80 different vehicle makes by as much as 20%.
Since trucks have an enormous business in hauling auto parts to various assembly plants and then hauling finished vehicles out to dealers, cuts that eliminate whole lines of vehicle production can create sharp changes in the supply line.
The Journal also said GM plans to wipe out 10% of its North American salaried jobs, which total 49,600. And it will shift more engineering work to Mexico to save from lower wages there, the story added. Transport Topics
Gillette Closing Plants, Cutting Jobs
Boston-based consumer products manufacturer Gillette Co. said Monday it will close eight factories and 13 distribution centers, while cutting 2,700 jobs.Although news reports did not list where the closings would take place, such cutbacks in general mean that trucks hauling Gillette-produced goods will have less to haul. And of course trucks whose business is tied to those facilities being closed will be scrambling for alternative loads.
News services said the job cuts amount to 8% of the company's workforce, and that Gillette will take a significant fourth-quarter charge for the costs of a restructuring that will take place over 12 months.
The news is just the latest in a series of big-company announcements of layoffs, plant closings or production cutbacks as the U.S. economy continues to slow. Trucking companies have been seeing the slowdown develop for months in weakening shipment activity, but recent weeks have brought more such signs. Transport Topics
There were no Friday P.M. Briefings due to a holiday schedule
| ||||
