Paccar continues capacity boost
BELLEVUE, Wash. -- Paccar Inc. reported record sales and net income for both the third quarter and first nine months of 1998, chairman and CEO Mark C. Pigott said. And despite concerns that demand will flag next year, the truck-maker will continue to invest in production capacity, including the scheduled re-opening of its plant at Ste. therese, Que. Consolidated net sales in the third quarter grew 13% to $1.9 billion US compared to the $1.6 billion recorded in the year-earlier quarter. For the first nine months of 1998, sales were $5.5 billion, up 17% versus $4.7 billion for the comparable period in 1997. The figures include Paccar’s North American divisions, Kenworth and Peterbilt, and it European operations, DAF, Leyland, and Foden. Pigott said third-quarter financial results reflect lower production levels because of the traditional summer holiday factory closures in Europe. He said Peterbilt is achieving higher production levels through increased build rates at its Denton, Texas, facility; the work stoppage at the Nashville plant, which began on May 4, has not been settled. Pigott warned of weaker demand in 1999. “Although industry orders and back logs are currently strong, there are signs that the exceptional market for trucks we have seen during the past several years may not be as robust next year,” he said. Yet Paccar continues to add and restructure its capacity, and the refurbishment of Paccar’s factory in Ste. Therese, Que., continues on schedule for a 1999 opening. The plant was officially closed two years ago following a strike by workers there. “This $80 million US investment will create a world-class facility and increase Paccar’s production capacity for class 4–7 commercial vehicles,” said Pigott. Kenworth’s Seattle facility is being prepared to build class 6–7 trucks, an effort to increase Paccar’s capacity for Kenworth T300 and Peterbilt 330 medium-duty trucks. The shift of class 6–7 production from Mexicali, Mexico, to Seattle will allow the Mexicali plant to increase Class 8 build rates, Pigott said. DAF is investing $25 million to increase capacity 20% in The Netherlands and Belgium, and has shifted some production to the Leyland facility to supply the UK market. In addition to expanding production rates and accelerating new product development, the company is increasing its investment in computer systems and enhanced infrastructure. “The implementation of Six Sigma quality initiatives throughout the company is beginning to yield results,” said Paccar president David Hovind. “These efforts are directly benefiting our industry-leading quality and, at the same time, lowering design, assembly, and system expenses.”