“We felt we needed to focus and decided that it didn’t make any sense to invest that much in a company controlled by a competitor.”
– Steve Keate
Steve Keate, president of the truck group of International Truck and Engine Corp., said International will continue to offer Caterpillar and Cummins engines as of October 2002, but will no longer offer Detroit Diesels as of that date.
October is when heavy-truck diesels must meet a reduced nitrogen oxide level of 2.0 grams per horsepower hour.
Keate said, “We’ve had to make some tough decisions. Past October of ’02 there will be no more big-bore Detroit Diesels in our products. We felt we needed to focus and decided that it didn’t make any sense to invest that much in a company controlled by a competitor.”
Asked whether or not Caterpillar engines would be available in International trucks in spite of the delayed introduction date for Cat’s ACERT technology, Keate said, “We expect Cat to have engines for us. We have long-term agreements with them, and so anticipate we’ll have their engines well past October 2002.”
Keate also gave his estimates of price hikes and reduced fuel economy as a result of the new emissions standards.
Keate said International would expect an increase of $3,000 to $5,000 in the delivery price as a result of the new emissions standards. “We also anticipate some deterioration in fuel economy, on the order of 2 to 5 percent depending on the application and engine,” Keate added. “We think EPA will not delay the date. If engines don’t meet the emissions requirements, there will be penalties levied.”
Nevertheless, Keate said International has spent “tens of millions of dollars” to create a smooth transition. “We will be in an excellent position to meet all the requirements.” The process has included road tests to ensure the prevention of cooling problems, he reported.
Keate said International is concerned about pre-buying. “Pre-buying is a likely scenario, with the price increase and reduced fuel economy. This might lead to higher near-term build rates. This would not be in the best interests of this industry. Having gone through layoffs, we don’t need a short-term bump followed by a fall-off. We are committed to managing production rates prudently.”