Caterpillar and DaimlerChrysler form global alliance

Caterpillar and the commercial vehicle division of DaimlerChrysler AG have agreed to form a 50/50 global alliance.

Upon regulatory approval, the alliance will create a medium-duty engine joint venture that will develop, manufacture and market current and future medium-duty engines and parts for sale to third-party customers and to DaimlerChrysler and Caterpillar for use in their own products. The sales volume of this joint venture is expected to grow significantly by mid-decade from a level of about $2 billion for the combined parent companies in 2000.

Furthermore, a fuel systems joint venture will develop, manufacture and market current and advanced technology fuel systems to third-party customers and for use by the parent companies. The sales volume of this joint venture is expected to nearly triple by mid-decade from a level of about US$600 million for the combined parent companies in 2000.

The two companies will also co-operate in research and engineering in areas such as combustion technology, electronics, air handling systems, exhaust aftertreatment and materials technology. The goal of the two companies is to enable their engines to meet increasingly demanding customer and regulatory requirements for noise and emissions control. These engines will be sold to third parties and incorporated into Caterpillar’s and DaimlerChrysler’s (Freightliner and its subsidiaries) own products.

The medium-duty engine joint venture will include Caterpillar’s US facilities in Greenville, South Carolina, and its operations in Peterborough, UK. DaimlerChrysler will contribute its Sao Paulo, Brazil, facility. DaimlerChrysler’s Mannheim, Germany, facility, both parents’ engine remanufacturing facilities, and certain operations in Caterpillar’s Mossville, Illinois, facility. Its Gosselies, Belgium facility, will serve as contract manufacturers to the joint venture. Both companies’ medium-duty engineering/development resources and related intellectual property also will become part of the venture.

The fuel systems joint venture will include Caterpillar’s US facilities in Pontiac, Illinois, and in Jefferson and Thomasville, Georgia, as well as its remanufacturing facility in Nuevo Laredo, Mexico. DaimlerChrysler’s Glatten, Wolfratshausen, and Rellingen facilities in Germany, and its US remanufacturing facility in Grand Rapids, Michigan, will participate in the venture.

In addition, the two companies reached agreement for Caterpillar to continue to supply heavy-duty 10 – 16 litre engines for use in Freightliner companies’ trucks.

More at www.caterpillar.com