International Truck and Engine Corp. said today that it expects to lose sales because of Caterpillar's recently implemented engine allocation.
Steve Keate, president, truck group, International, said customers have ordered new trucks spec'd with Cat engines, but that it will not have enough engines to fill those orders. Keate said the truckmaker is working to switch to Cummins engines, but added that he expects some to refuse the offer.
"We're getting Cat engines now, we're just not getting enough," Keate said. "We're trying to manage the fallout as best we can, but we're sure we will find some instances where customers will feel they have to go elsewhere."
Keate said Caterpillar put International on allocation in early June and notified the truckmaker it couldn’t fill production needs through October.
"This put us in very difficult position with customers we made commitments to," Keate said. "We are working with Cat to get more engines and looking to other engine suppliers, especially Cummins, to make up the shortfall."
Keate said the shortage effects the entire Class 8 line – 7600, 7800, 9000 series as well as the new 5000 series equipped with the Caterpillar C10, C11, C12 and C15 engines.
International sued Cat in May over a dispute over what Keate called a binding agreement defining price. Keate said Cat wants to increase the price of engines after October, when new EPA standards go into effect.
International said Caterpillar refused to honor a pricing schedule that would have provided engines through 2006. The truckmaker also claims Caterpillar reneged on an agreement to supply engines for the model 8600 International plans to roll out in August.
"It's in everyone’s best interest to resolve as best possible," Keate said. "We’re pressing aggressively to solve it."
Keate added that International's decision to cut Detroit Diesel engines from its line still stands.