P.M. Executive Briefing - Dec. 17
Due to technical difficulties, Friday's afternoon edition could not be posted until today. We apologize for any inconvenience.
This Afternoon's Headlines:
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FDX Is Revamping Its Sales Operations in Wake of Lackluster Profit, UPS Gains
FDX is overhauling sales operations and intends to combine its Federal Express and RPS brands. The company is faced with poor earnings and a decline in its market share among smaller and mid-sized business shippers for the second fiscal quarter.
FDX is planning to concentrate more on growth in overnight boxes than overnight letters at FedEx; it will also introduce new incentives for sales employees. Although Graf would not say whether the RPS brand will go away altogether, he did say the FedEx name would be better for marketing RPS's offerings. He said customers believe RPS to be less reliable than it actually is. No matter what brand names are used, RPS and FedEx will still operate independently. Wall Street Journal (12/17/99) P. A3; Blackmon, Douglas A.
Interview-Volvo Trucks Eyes Stronger U.S. Position
Volvo plans to take a bigger share of the North American heavy truck market and improve margins there in 2000 while anticipating the weaker demand this fall to continue its drop through the first quarter.In an interview, Volvo Trucks CEO Karl-Erling Trogen said the North American truck market would rise and become stable after the first-quarter drop. Trogen predicted a potential 10% overall market correction for 2000. He said the company's operating margins have been improving substantially starting in 1996, and it plans to meet its goal of 5% to 7% over the business cycle. The company wants to raise its U.S. market share to 20% from the current 11% to 12%. It has a target of 35,000 trucks delivered to North American customers in 1999.
For the company's biggest market, Western Europe, Trogen predicted ongoing market strength and total heavy truck sales between 220,000 and 230,000 units next year. The possibility that Volvo and Scania's market share there will drop after their merger, due to a public perception that the two companies would not be competing anymore, was dismissed by Trogen. He said the two firms will operate independently, and he predicted market share gains in Western Europe. Reuters (12/17/99) ; Westman, Henrik
Cummins Engine Co.
Cummins Engine will take a $60 million charge before taxes in its fourth quarter as it and the Finnish company Wartsila have decided to end a joint venture to make heavy engines fueled by diesel and natural gas. The CW 170/180 engines made in Britain by the venture will continue to be manufactured by Cummins. Manufacturing of the French-made CW200/220 engines will go over to Wartsila. Wall Street Journal (12/17/99) P. A6Although Truck Safety Progress Is Being Made, NAII Urges Clinton to Stay Border Moratorium
The National Association of Independent Insurers asked President Clinton to maintain the ban on Mexican trucks in the United States until safety concerns have been dealt with. The NAII's worry is also aroused by the fact that Mexico's new databases for commercial-vehicle registrations and driver's licenses lack historical information.Mexico's lack of safety regulations for commercial vehicles is hampering attempts to create three-way standards in the Nafta countries, and it needs to bring inspection sites for trucks that cross the border up to date, NAII believes.
According to U.S. officials, the Mexican government has held off on giving the Transportation Consultative Group its rules for motor carriers, drivers and crews, and other transportation operations. NAII senior vice president Robert Dibblee cites the Transportation Department Inspector General's report saying not enough trucks are receiving border inspections and not enough of those that are inspected are up to U.S. standards. More than two-fifths of the Mexican trucks were taken off the road following inspections.
The NAII is pleased with the new Motor Carrier Safety Improvement Act as well as the National Corridor Planning and Development and Coordinated Border Infrastructure programs. U.S. Newswire (12/17/99)
Tax Freeze Warm Greeting For Firms Expanding Here
The Memphis and Shelby County (Tenn.) Industrial Development Board gave M.S. Carriers a tax freeze lasting 11 years as the carrier intends to spend $16.1 million on an area warehouse.In a three-year period, M.S. Carriers projects adding 730 employees to the payroll making a median $35,875 a year. The company will use the warehouse for Pfizer printed materials. M.S. Carriers, which stands to save some $1.1 million due to the tax freeze, was one of eight companies given tax freezes or tax freeze extensions by the board for Memphis-area expansion. Memphis Commercial Appeal (12/16/99) P. C1; Grantham, Russell
State May Seek Damages From Fire
The Virginia attorney general's offices is to look over the state forestry department's case and decide whether to sue a trucker, carrier, or truckmaker for damages related to an August forest fire.The fire was caused by sparks from a truck's wheel rim following a blowout on Interstate 81. The state spent $166,192 in its five-day fight against the blaze, in which 1,285 acres on Purgatory Mountain in Botetourt County burned.
The Tennessee trucking company's name has not been given by authorities. The attorney general's office "may look at it and decide it was an accident – an act of god," says state forester Chris Thomsen. Roanoke Times (12/16/99) P. B1; O'Brien, Kimberly
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