DaimlerChrysler advances
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• by Colin Barnett DaimlerChrysler's declared intention to become the major global truck manufacturer has taken two more significant steps forward. In the first move it has signed an agreement to buy the Canadian-based truck and bus builder Western Star—followed a day later by news of a deal to take full control of engine builder Detroit Diesel.
The Western Star contract, valued at about 1.300m, is being arranged through DaimlerChrysler's US Freightliner subsidiary, which already runs the formerly Ford-owned Sterling brand.
Western Star's product line-up of premium heavy-dirty trucks will continue. but its support network will be merged with Sterling's. The deal gives credence to the belief that Western Star divested itself of ERF in anticipation of just this type of deal.
As well as the Western Star brand, DaimlerChrysler will gain ownership of Orion Bus Industries, which will be combined with its existing Thomas Built Buses and Setra marques.
Western Star Australia will retain the WS rights in Australia, New Zealand and Asia-Pacific, together with the recently formed MAN-Australia. It is being sold to a corporation associated with the current Western Star chairman, Australian Terry Peabody.
DaimlerChrysler already owns 21.3% of Detroit Diesel; it will offer about 1265m for the remainder. DaimlerChrysler says that Detroit Diesel's largest shareholder, the Penske Corporation, has already agreed to sell its 48.8% stake.
Detroit Diesel produces diesel engines from 25hp to 10,000hp and is well known in the UK for its gaspowered spark-ignition engines. Since 1995 the company has also owned the Italian VM Moteri operation.
Both deals are subject to the usual regulatory approval.
DaimlerChrysler is said to be going ahead with its plans to buy 34% of the Japanese Mitsubishi Motors concern, despite its recent problems at home.
A massive recall of more than 500,000 vehicles is being staged, amid a government investigation into complaints that defects in Mitsubishi cars, sports utility vehicles and trucks were Ignored and even covered up.
It is believed that none of the vehicles involved was exported.