W estern Star boss Terry Peabody's first foray into truck manufacturing
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came in the early '80s in his native Australia when he was running a large construction materials company. When the US truck maker White Motor Company hit the skids in 1981 and filed for chapter 11 in the American Courts (effectively receivership but with protection from its creditors) it also put its Australian assembly operation, based in Brisbane, into receivership. In 1982 Peabody bought the engineering stock of the White Road Boss truck assembly operation: "Simply because we had a very large fleet of White Trucks", he says.
The following year he struck a deal with Western Star, the British Columbia-based Canadian truck and bus manufacturer, whereby Western Star would supply US-driveline components to the Brisbane plant and trucks produced on the line down under would be badged Western Star. It was "a very good arrangement" Peabody recalls. Then Western Star's parent company put the truck and bus maker up for sale in 1 989 and in 1991 Peabody bought it. By then the former truck operator was also in his own words: "A reasonably accomplished truck manufacturer". Peabody's claim that "we really knew the business" was demonstrated soon after he took over Western Star—within three months he had cut C$1 m a month off its manufacturing costs.
The year before his takeover Western Star had made a loss of C$1 2m. However, by the end of his first year Peabody had put it back in the black with profits of C$3m on a turnover of C$300m. Since then the company hasn't looked back. For the financial yebr up to the end of June 1996 it recorded a turnover of C$730m with profits of C$40m.
Last year Western Star took over ERF in a deal worth .£27.4m. At the time Peabody declared: "The combined Western Star and ERF will be positioned to play a greatly expanded role in the world heavy-duty truck market." He calculates that the combined turnover of Western Star and ERF will amount to C$1.3bn.