CAT/Navistar engine alliance

[unmguy2000]

Ran across an interesting article this morning. CAT and Navistar are going to work together on 2010 emission compliant engines. CAT will introduce a "severe service" engine for off-road equipment but it will be a Navistar engine that is CAT branded.

caterpillar navistar in alliance for trucks engine technologies

[Steelehc]

Not sure why those two firms need to work together on something, but it'll be one heck of an engine when they're done!

Henry

[Louisville_Joe]

Originally Posted by Steelehc

Not sure why those two firms need to work together on something, but it'll be one heck of an engine when they're done!

Henry

Because Caterpillar is getting out of the highway truck engine business.

[Forcus]

Originally Posted by Louisville_Joe

Because Caterpillar is getting out of the highway truck engine business.

The way it is worded is a little bit tricky to understand.

After 2010, Caterpillar will no longer sell to on-highway truck OEM's, 2010 compliant engines. That means research, marketing, development on Cat's end for 2010 engines will stop, at least until there is an agreement between Navistar and Cat to develop technology.

Legacy engines (ie, exempt military engines) will still be sold to OEM's. However my read on the situation was that eventually all product sold for trucks would be Cat / Navistar jointly developed.

Cat will still be developing their own engines for machine, industrial, EPG, marine, petroleum. Any truck stuff will be developed with Navistar. The expectation (at least for me) is some of this joint development will trickle down to the other Cat segments.

It is unclear to me (and probably has not been finalized) what will be built and developed where. But for the short term it looks like truck engine builds will wind down and the areas reallocated to machine engine builds.

Also interesting is that there will apparently be more of a tie between Navistar and Cat dealers. Apparently many Cat dealers already are also Navistar dealers. There will also be a Cat branded Navistar truck for severe service applications. I hope that it will have a bit more substance than the Sterling branded Dodge pickups (as far as rebadging).

I'm disappointed that it came to this point (the engine manufacturers, Cat included, contributed to the downfall of the "independents"), but thought that Cat would be out of the on-highway picture completely. This looks like the best thing that could have happened for Cat and I think that Navistar is refocusing from the whole Ford diesel debacle.

[grounder]

Actually it is because they cannot meet the emmisions regs and my guess they just dont want to deal with trying too.I am a CAT certified tech and these new emmission motors are Horrible to work on.Cummins has done there homework on this and still they are useing a cooled egr setup with some in chamber Inj technology and meeting the regs The ISX class 8 engine is still clean looking and relatively easy to service Unlike the New CAT's which unfortunately are totally coverd with crap. ease of service is absolutely horrible.Plus by 2010 cummins claims there engines will burn so clean that The DPF will NOT be necessary.CAT has plenty of equiptment buisness where alot of these EPA regs do not apply.So them Not produceing On-Highway tk engines anymore really is not going to hurt them one bit.It will be interesting to see what the Joint venture Between Them and Navistar amounts too.You know they were in a previous partnership years back on developement of the HEUI Injection system.They threw the Bone into Navistar in the end and Took whole patent rights to it.So there was some Bad blood there and legal wranglings.That obviously is water over the dam now.

[Kaliburz]

Interesting.... no more Kitty Cat engines ... well, not in the way that we 'knew' it.

[Wiley75]

Originally Posted by grounder

Actually it is because they cannot meet the emmisions regs and my guess they just dont want to deal with trying too.I am a CAT certified tech and these new emmission motors are Horrible to work on.Cummins has done there homework on this and still they are useing a cooled egr setup with some in chamber Inj technology and meeting the regs The ISX class 8 engine is still clean looking and relatively easy to service Unlike the New CAT's which unfortunately are totally coverd with crap. ease of service is absolutely horrible.Plus by 2010 cummins claims there engines will burn so clean that The DPF will NOT be necessary.CAT has plenty of equiptment buisness where alot of these EPA regs do not apply.So them Not produceing On-Highway tk engines anymore really is not going to hurt them one bit.It will be interesting to see what the Joint venture Between Them and Navistar amounts too.You know they were in a previous partnership years back on developement of the HEUI Injection system.They threw the Bone into Navistar in the end and Took whole patent rights to it.So there was some Bad blood there and legal wranglings.That obviously is water over the dam now.

I disagree with your statement that they "cannot meet the emissions regs". Oh yes they certainly can. But one must ask why would CAT dedicate the HUGE amounts of engineering and resources to the manufacture of truck engines when they could sell just as many engines into off-highway markets at 3 or 4 times the profit margin. For example, a C18 marine engine sells for around $88K where a C15 truck engine sells to Paccar for probably $18K. Both have about the same cost to produce. Hmmm. Which do you think is more profitable for CAT? Also notice that CAT will be investing over $1 BILLION over the next two years in new factories and production facilities.

To the original poster: You forgot to mention that CAT will be offering their own brand of severe service trucks. They supposedly will not be a International truck with a CAT paint job. They will be a new truck designed from the ground up by International and CAT engineers sold only by CAT dealers. This vertical integration is similar to what Paccar and Daimler are doing as well. So it's not just an "engine alliance". It's a entire truck.