P.M. Executive Briefing - Jan. 31
This Afternoon's Headlines:
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Daimler in Commercial Vehicles Revamp
The commercial-vehicles division at DaimlerChrysler has been restructured with a global emphasis since former Mercedes-Benz brand-management chief Dieter Zetsche took over the top spot in the automotive group's commercial-vehicle operations last fall.The company left behind the old regional organization to institute global business units, including Freightliner, Sterling, and Mercedes-Benz trucks, in addition to buses, vans, and powertrains.
Details on DaimlerChrysler's restructuring and future expansion are expected at the European road transport show this week in Amsterdam. Financial Times (01/31/00) P. 36; Burt, Tim
Western Star Trucks Holdings Sells British Truck Subsidiary to MAN AG for $156 Million
Western Star Trucks holdings is selling ERF, its British truck subsidiary, to Germany's MAN for roughly C$156 million. MAN is to assume C$108 million in ERF debt; of that, ERF owes C$55 million to Western Star.A separate deal will see Western Star pay some $1 million Australian for MAN's Australian subsidiary and take on MAN's Australian debt, mostly represented by component and vehicle inventory. Western Star says it thinks that the European heavy truck industry will go on consolidating, and the deals will bring the company an "improved cash position and a stronger balance sheet."
Western Star's second-quarter revenue rose for all product lines other than ERF. According to Western Star, its acquisition of MAN Australia will boost its Australian and New Zealand market presence. Vancouver Sun Online (01/31/00)
United Road Appoints New Leaders; Stock Up
The Colonie, N.Y., transportation and towing company United Road Services has appointed two people to lead its newly separated transport and towing/recovery operating units.The transport unit president will be 27-year trucking-industry veteran Michael Wysocki, founder of the Massachusetts automotive carrier MPG Transport, which was the biggest of United Road's 56 acquisitions from May 1998 to June 1999. Harold Borhauer will be towing/recovery president.
United Road restructured its organization in order to "digest" its acquisitions and become profitable again. When it announced the restructuring earlier this month, it also said president and COO Alan Pass had resigned. Chairman and CEO Edward Sheehan resigned in June due to poor 1999 earnings.
The company's share price, which was $13 when United Road went public in May 1998 and once hit $20, was $1.65 at the beginning of this month. But it passed $2 after Wysocki's appointment was announced Jan. 17 and rose to $2.81 Jan. 25, the day after Borhauer's appointment was announced. Capital District Business Review (Albany, N.Y.) Online (01/31/00); Pinkney, Barbara
Rush Enterprises' Stock Hit by Soft Market for Truck Sales
The heavy truck dealer Rush Enterprises has taken stock hits and seen its ratings downgraded and earnings estimates reduced by analysts as concerns mount about declining truck sales.Analysts believe Rush's first-quarter earnings and revenues will be harmed by the postponement of a Werner Enterprises order that was set for this quarter. Morgan Keegan & Co. analyst Doug Col reduced his 2000 earnings estimates to $2.30 per share from $2.50 and said this quarter will certainly be "a down comparison." Rush saw record new and used truck sales in 1999, with its revenues for the first nine months up 31% year-over-year and net income up 64%.
Its share price hit its highest point ever, $20, in July and was mostly around $15 until it fell to around $9 late this month. It therefore appears investors do not believe Rush's 2000 performance will be similar to that in 1999.
Both new and used truck sales for the first quarter will be hurt by lower used-truck prices, said Rush CFO Marty Nagelin. But he thinks the weak market is "a short-term blip," as does Dain Rauscher Wessels managing director Bob Toomey, who follows Paccar. He believes truck sales will be strong so long as the economy is.
Col said Rush beefed up parts and service to make up for lower sales, but this may not bring the stock back up since "nobody cares about small-cap value stocks." Rush has a price-to-earnings ratio of 4, compared to the Standard & Poor's 500 figure of 30. San Antonio Business Journal Online (01/31/00); Weiss, Sebastian
Port Truckers to Rally Today
Independent drayage truckers were set to protest Monday in Jacksonville, Fla.; Charleston, S.C.; Savannah, Ga.; Detroit; Baltimore; and Boston to demand the Teamsters' Port Trucker Bill of Rights be adopted by the industry.They are also rallying against rising fuel costs. Issues in the bill of rights include a fuel surcharge for port truckers and a system to ensure drivers benefit from the surcharge, as well as safe containers, health insurance and benefits, unionization rights, roadworthy chassis, and no mandatory unpaid work. Heavy Duty Trucking Online (01/31/00)
Lung Assn. Asks Court to Review Air Quality Warning
The Supreme Court has been petitioned by the American Lung Association, which wants a review of the federal appeals court's May decision that the Environmental Protection Agency's 1997 air-pollution standards were an "unconstitutional delegation of legislative power." Association President Ernest Frank said the group believes the court "misread the U.S. Constitution and the Clean Air Act." TruckingInfo.com (01/31/00)© copyright 2000 INFORMATION, INC. Terms of Service
