WPLN News Archive; News Archive 8/18/00-9/27/00; Decline in Trucking Industry (Adrienne) 8 24 00

like most drug manufactures across the country local peterbilt motors has enjoyed record heavy truck sales during the decade economic them but when sales started slumping early this year and then continued to slide to the second quarter peter bell which is packed bars local operations was forced to start laying off workers soon after daimler chrysler's freightliner and navistar international announced dramatic cuts there plants or that puts close to five thousand blue and white collar workers out of jobs this kind of slumped is a new to the industry jeff crack is an analyst with ag edwards and sons he follows transportation equipment manufacturers part of the production shortfall that you're seeing here is that a function of too much inventory out there within the inventory we have record level of inventory at both the new and they use equipment that heavy truck sales hit an all time high of two hundred eighty six thousand last year this year the industry expects to sell less than two hundred fifty thousand the nature of the trucking industry has always been cyclical but workers new to the field haven't experienced at the strong economy the nineties coupled with industry improvements

mark against resulted in a decade long bone joe scattergood is the plant manager at peterborough murders in madison the troubles he's had with declining sales and resulting layoffs are indicative of what's happening throughout the country we were building a product faster than it was selling retail for three to four months and we'd build up a stock of vehicles hoping that they would sell out we would capture more market share a greater percent of the market i whistle at that wasn't gonna happen we had to go back and adjust our rate as our dealers can't absorb so much inventory scattergood says that while the market forecasted a ten to fifteen percent or decline the industry didn't expect such a severe drop his parent company pack our estimate industry wide new truck orders to be down thirty to forty percent from last year insurance rates are up interest rates are up fairly dramatically and all our customers finance or vehicle somehow the fuel prices have the affect your customers as well not all of them been able to increase that cost to their customers who have had to

absorb it as the number of new trucks grew so did the number of used trucks john smith is president and ceo of c r s t international which is based in cedar rapids iowa he owns one of the largest fleet in the country smith says business is fine it's just not as robust as last year or do you keep recalling five years and then we greatly decreased very career well you know having grown during those five or six years i was buying more neutral because i was creating more often and billowing we were only able to manufacture our work at our korean that are higher value when the value of huge trucks drop dramatically companies were forced to keep their equipment longer rather than lose money down on broadway is a trucking equities analyst with ag edwards unfortunately we have a large truck and tori a low average age of the nationwide fleet any large use

track inventory that will take some time to work for the saving graces with the economy in the past couple years the growing at such a frantic pace it won't take but a few quarters of that frantic pace to catch up scattergood agrees saying about production is down a peterbilt they still made significant gains this year or more has your host jumped over two points in the first portion of the year which is dramatic and go from ten percent to twelve percent to twenty percent increases we're affected by the overall market and the only way we can adjust to that market and reduce that effect is to capture more market share and let someone else suffer more than we'd franklin unfortunately someone's gonna lose in the market pots looking at it from a volume perspective trucks move sixty percent of the economy and while no one in the industry was willing to predict when employees can return to work abroad and says he expects the industry to stabilize once

diesel prices go down and used truck values go up for national public radio i mean you know we'll know it's both