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While Daf shareholders consider US truck maker Paccar's offer to buy the company, CM'S US correspondent Steve Sturgess examines the story from the US perspective...
• According to Paccar chairman and chief executive officer Charles M 'Chuck' Pigott, the acquisition of Daf will consolidate Paccar as one of the top three manufacturers of heavy trucks in the world.
"This offer demonstrates Paccar's commitment to being a global leader in the heavy-duty commercial truck market," he says. "Paccar and Daf share a common business philosophy— building the highest quality products in a cost-effective manner to satisfy customers' transportation requirements."
Acquisition
The goal of the acquisition for Paccar is to allow the two companies to pool technological resources from two major truck markets and to cut costs by taking advantage of increased efficiencies and economies of scale.
"Our goal is to continue steady and profitable market share growth as well as expand our presence into additional markets," says Pigott. He plans to retire at the end of this year: his son 1lark Pigott is in line to take over the top spot in the family-held corporation.
Pigott junior has been rising through the Paccar ranks for several decades, with a stint in Europe in the early days of the Foden acquisition. He is known
To be enthusiastic about the European haulage industry.
Many suppliers are the same on both sides of the Atlantic and Paccar has a UK foothold in Foden Trucks. Despite the Foden subsidiary, Paccar maintains there is little overlap in the primary geographic markets of the two companies. Moreover, the product lines are complementary, with Paccar making mostly Peterbilt and Kenworth heavy-duty (over 16 tonnes) bonneted trucks for North America and the export markets it serves.
In 1995, Paccar produced 54,000 vehicles under the Kenworth, Peterbilt and Foden banners, generating net sales of .£2.95bn ($4.6bn). Net income was £162m ($253m) for a 21.5% profit on turnover.
Net sales for the first half of 1996 were £1.35b ($2.1bn) and net income for the same period, reflecting a slowing in the overheated North American truck market, was £63m (898m).
Paccar's primary market is North America, where its increasing share of of the over16-tonne market currently stands at more than 20%. The company claims to be market leader in Australia and Mexico and to have a 20% share in South Africa.
Paccar has been able to score a number of design and engineering firsts in North America. Kenworth's T600A was the first of the droop-snoot aerodynamic conventionals, introduced in 1985 and spawning an entirely new look that has dominated North American highways.
Production
Recently, it has entered production with its T2000, an innovative design that uses composites to add strength and save weight while leading with an exceptionally smooth, aerodynamic shape.
Peterbilt has maintained a very strong association with drivers as the perceived "class of the industry". That perception continues with its newer models designed for driver comfort while retaining a very traditional trucking look.
Paccar's two North American divisions are perceived by most drivers and many fleet owners as the best-in-class heavy trucks. Peterbilt has long enjoyed the number-one slot in the eyes of the owner-operator and the career company driver. Being at the wheel of a "Pete" is considered the pinnacle of driving by many, if not most North American drivers.
That is hotly contested by Kenworth drivers who enjoy the classic driving comfort of the KW and the smooth, well-engineered feeling of the controls in this "Drivers' Truck". But even if there is name-calling between the two, there is no thought of switching to another brand by these Paccar diehards.
Recruitment
Between them, the Kenworth and Peterbilt marques enjoy a special cachet that make them a big draw in fleets looking for drivers in the increasingly competitive US driver recruitment environment. Many fleets now operate hundreds or even thousands of other-make trucks for their competitive pricing or for other competitive reasons.
But when it comes to rewarding good drivers, or attracting and retaining scarce drivers, many still spec Kenworth and Peterbilt trucks.