Caterpillar to Build Its Own Dump Trucks -- Update

By Bob Tita And Tess Stynes 

Caterpillar Inc. said Tuesday that it plans to build its own line of dump trucks at a plant in Texas and wind down an existing arrangement it has with engine maker Navistar International Corp. to build the trucks.

The plan was previously reported by The Wall Street Journal.

Caterpillar, the world's sales leader in off-road construction machinery, has been selling the on-road trucks built by Navistar since 2011. Beginning in the first half of next year, Caterpillar expects to begin assembling the trucks at its plant in Victoria, Texas. The plant opened in 2012 to assemble excavators that had been built in Japan and imported to North America.

Bringing the truck family into Caterpillar is expected to add roughly 200 jobs at the Texas plant, which also will continue produce hydraulic excavators, the company said in a news release Tuesday.

The Navistar-built, Caterpillar-branded trucks haven't been a big hit with truck buyers. Sales of the three truck models have averaged about 1,000 total annually for the past three years. The move could help Caterpillar more effectively leverage its reputation with the construction industry for high-quality machinery, because customers will know it is making the trucks. Building the trucks also would add work for the Texas plant at a time of falling demand for the construction excavators it was set up to manufacture.

Separately, Navistar said it would launch a new line of its own trucks starting early next year, leveraging shared technology and intellectual property from the venture with Caterpillar.

Both companies "will have the opportunity to leverage certain joint intellectual property, collaborate with suppliers and utilize licensing agreements moving forward," Navistar said in a news release.

Navistar said it plans to release additional details about the planned truck line in coming months.

The Caterpillar-Navistar partnership was devised in 2009 with ambitious goals to market Caterpillar-branded trucks in several overseas markets through Caterpillar dealers. Those plans were mostly scaled back when sales of the trucks were anemic in North America.

Write to Bob Tita at [e-mail] and Tess Stynes at [e-mail]

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