International sees opportunity in slowdown

Though new truck orders are dropping, John Horne, International Truck & Engine Corp.'s chairman, president and CEO, said his company has long prepared for an industry slowdown, which may be a boon to his company's Next Generation Vehicle project."We don't think it's going to get better in the near term, but we have been planning for several years for this since we're in a cyclical industry," Horne

Though new truck orders are dropping, John Horne, International Truck & Engine Corp.'s chairman, president and CEO, said his company has long prepared for an industry slowdown, which may be a boon to his company's Next Generation Vehicle project.

"We don't think it's going to get better in the near term, but we have been planning for several years for this since we're in a cyclical industry," Horne said at an impromptu press conference in Chicago last August.

"We have built more flexibility into our business because the Class 8 market is so cyclical," Horne said. "We have built up the less cyclical parts of our business - the medium-duty truck, bus and diesel engine parts - and have outsourced a lot more work to contract employees to make sure we can size our organization for the business that's out there."

International plans to lay off about 1,100 white-collar employees, or 15% of its work force; about one-third of those layoffs will affect contract workers. This follows similar moves at other truck makers. Freightliner Corp. plans to lay off 3,475 workers, or 19% of its work force, this year; Paccar, builder of Kenworth and Peterbilt trucks, plans to cut 430 workers at its Tennessee truck plant.

While the short-term effects may be painful, Horne believes the downturn in truck sales opens up an opportunity for International's top-secret NGV project, which it plans to unveil February 16, 2001, in Las Vegas.

"I'm a big believer in economies of scale, and this project will give us that on the truck side," he said. "With higher scale, my quality and efficiency go up, yet my cost per unit goes way down. We've achieved that on the engine side of the business; we want to bring it to the truck side."

International is betting heavily that its NGV investments, projected to top $900 million by 2004, will eventually help restore it to the No. 1 slot in truck sales. It is currently ranked No. 3 by Ward's AutoWorld, with 15.3% of U.S. truck sales; Paccar holds the No. 2 spot, with 21.2%; and Freightliner, owned by DaimlerChrysler, is No. 1, with 37.3%.

Horne also said International plans to keep an eye out for future opportunities to increase economies of scale in other parts of its business, including partnerships with other companies.

Q I want to eliminate coolant leaks at the hose connections. What are my clamp options?

A You are not alone. Gates research shows that more than 90 percent of fleet service managers identify cooling system leaks as a leading maintenance problem, with more than 70 percent reporting coolant leaks as their top concern.

Heavy-duty truck coolant systems have traditionally used constant-tension (worm-drive clamps) or constant diameter (spring-clamps). Connections using these clamps can leak in low-temperature conditions, or where surface imperfections on the stem, such as rough casting seams, create a coolant leak path.

To remedy leaks, your technicians probably tighten the clamp even more, replace the clamp, or replace the hose. This is costly in both material and labor, and is a temporary fix at best.

You might consider my PowerGrip[R] SB clamps made of a heat-sensitive thermoplastic material. Installed with a standard heat gun, they shrink and conform to any shape of hose and housing, even out-of-round applications. Plus, they automatically tighten every time the engine comes to operating temperature.

Unlike other clamps, Gates PowerGrip SB provides increased clamp force as temperatures decrease to prevent cold coolant leaks. In other words, they exert the greatest force when it's needed the most.

If you want more tips on heavy-duty belts and hose, or product information, visit www.gates.com/fleet.

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