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Demand for Heavy Trucks Shows Economy on Rebound

July 13, 2004

Demand for heavy-duty trucks is up 40 percent this year, according to Standard & Poor’s, prompting manufacturers and component suppliers to substantially boost output for the first time since the booming late 1990s, as reported by the Detroit News newspaper. At Ford Motor Co., sales of big trucks are up 113 percent through June. Demand has increased 90 percent for General Motors Corp.’s large GMC TopKick 6/7/8 series and 78 percent for its Chevrolet twin — the Kodiak. Ford and GM are stepping up production of big trucks and at least one diesel engine maker has already accelerated its assembly lines. “The last time a typical customer bought from us, for example, was five years ago and he bought 20 trucks,” said Joe Castelli, director of Ford’s commercial truck business. “Now he’s seen his business grow and he’s back looking for 30 trucks.” Phoenix, Ariz.-based U-Haul International Inc. has added 5,000 10-foot GMC moving trucks to its fleet in the past year. “We are experiencing an increase in moving activity all across the country, which is a clear indicator to us that the economy is improving,” John Taylor, U-Haul’s executive vice president, said in a statement. Freightliner is also adding a third production shift and 593 full-time jobs later this month at its Cleveland, N.C., assembly plant and another 100 jobs at a chassis and cab parts factory in Gastonia, N.C. Ford plans to increase commercial truck production by 30 percent during the second half of the year, said Ford’s Castelli. A second shift will begin producing TopKicks and Kodiaks in September at GM’s Flint Truck Assembly, adding 300 hourly and 35 salaried workers to the plant’s current workforce of 3,380, according to plant manager Jim Glynn. Some companies are also rushing to buy new trucks before more stringent federal emission regulations covering diesel engines take effect in 2007. The average age of commercial trucks on the road is 5.9 years now — a 10-year high, triggering a replacement market. After several down years for the big truck market, companies must spend money to make more money, says Ford sales analyst George Pipas. “A truck is a piece of equipment,” says Pipas, “they are used to make more money.”
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