After filing for bankruptcy in December 2000, Dorsey Trailers has announced an agreement with Foothill Capital Corp for limited use of cash collateral to finance ongoing operations. The current agreement was accepted January 3 after expiration of a similar agreement with Foothill the same day.
Dorsey also entered into an exclusive agreement December 28 with Equity Partners of Maryland, an enterprise specializing in turnarounds, sales and refinancings, and liquidations of financially troubled companies. EPI is to assist Dorsey in refinancing, to seek a joint venture partner, and to sell, lease, or otherwise dispose of assets.
"Although our desire was to continue the company as an on-going operation, we must explore all aspects of maximizing the value of the company," says Marilyn Marks, chairman of the board. She said the best way to do so was to retain a company such as EPI to explore the sale of Dorsey as an ongoing operation or to sell its assets.
"If a sale of the company's assets is required, it is unlikely that the company will be able to obtain its true market value due to the severe downturn in the trailer manufacturing industry," Marks says. "The proceeds of a sale of the assets of the company after payment of secured creditors and administrative claims would not be sufficient to satisfy all of the unsecured creditors. As such, there would then be nothing available for distribution to the company's stockholders."
US Department of Justice Gives Clearance To AB Volvo for Purchase of Renault VI/Mack AB Volvo and the United States Department of Justice have entered into a consent decree that is awaiting approval by US district court in Washington DC. AB Volvo has received clearance from the Department of Justice for acquisition of Renault VI/Mack. The approval is subject to the condition that Volvo Trucks' North American low cab-over-engine (LCOE) business be divested. This segment amounts to less than 3% of the total heavy-truck market in North America.
The Volvo Group is establishing a new business area, Volvo Global Trucks, comprising the Volvo, Renault, and Mack truck brands. Tryggve Sthen, chief executive officer for Volvo Trucks, will be CEO of the new business area. Volvo Global Trucks represents 70% of the Volvo Group's worldwide sales. Volvo Global Trucks is expected to be operational in early 2001.
In April 2000, AB Volvo and Renault SA concluded an agreement in principle whereby AB Volvo will receive 100% of Renault's truck operations, Renault VI/Mack, in exchange for 15% of AB Volvo's shares. The agreement was completed in July and approved by the European Union in September.
As a result of the acquisition, Volvo Group is becoming the world's second-largest and Europe's biggest manufacturer of heavy trucks, with almost twice its former volume of business.
Volvo Trucks' and Renault VI/Mack's combined sales in 1999 amounted to about 151,000 heavy trucks and 22,500 light- and medium-heavy trucks. Their combined share of the market for heavy trucks in Western Europe amounts to about 28%, and to about 24% of the market in North America.
The divestment involves only those assets associated with the LCOE operations, and will affect the Xpeditor models within Volvo Trucks North America. The Volvo trademark and assembly plants are not included.
Heil Trailer Purchases Kalyn/Siebert Inc Heil Trailer International, a Dover Industries company and tank trailer manufacturer based in Chattanooga TN, has purchased Kalyn/Siebert Inc, effective Dec 5, 2000. Kalyn/Siebert, based in Gatesville TX, manufactures customized truck trailers for commercial and United States government/military customers. The company has more than 200,000 square feet of production space. Excluded from this sale was Kalyn/Siebert's affiliate operation, Kalyn/Siebert Canada Inc, located in Trois-Rivieres, Quebec, Canada.
Cummins Lays Off 140 at Indiana Plant Diesel engine producer Cummins Inc has laid off approximately 140 employees at its Columbus Midrange Engine Plant (CMEP) in Walesboro IN effective Jan 15, 2000.
CMEP produces the diesel engine for DaimlerChrysler's Dodge Ram pickup truck. The layoff is in response to DaimlerChrysler's decision to reduce production of all of its vehicles, including its Dodge Ram pick-up truck.
"We had hoped to avoid layoffs, we have exercised every other option available to us, and we must now take this step," said Larry Moore, vice-president and general manager of Cummins' Light Duty Automotive Business. "We will continue to align staffing with demand in the markets for products manufactured at CMEP."
Moore said CMEP also had planned to shut down production on Mondays throughout January.
TMA, Mexican Counterpart Sign Agreement The Truck Manufacturers Association (TMA) has signed a memorandum of understanding (MOU) with its Mexican counterpart, the National Association of the Producers of Buses, Trucks, and Truck-Tractors (ANPACT). The MOU was signed Nov 16, 2000, in Guadalajara, Mexico. According to William A Leasure Jr, TMA executive director, "The goal of the agreement is to have the two associations work together to encourage their respective governments to develop safety and environmental regulations that are harmonized across North America. We plan to actively engage in constructive dialogue and exchange of technical information with Mexican governmental officials on issues affecting our business as we now do with the regulatory agencies in the United States and Canada."
Leasure also announced that Isuzu Motors America Inc, based in Cerritos CA, has become a TMA member. It joins Ford Motor Co, Freightliner LLC, General Motors Corp, International Truck and Engine Corp, Mack Trucks Inc, Paccar Inc, and Volvo Trucks North America Inc as members of the association. TMA represents the major North American manufacturers of medium- and heavy-duty trucks with a gross vehicle weight rating greater than 8,845 kilograms (19,500 pounds).
Wabash Completes Breadner Group Acquisition Wabash National Corp has closed on the acquisition of the privately held Breadner Group of Companies, headquartered in Kitchener, Ontario, Canada. With 10 branch locations in six Canadian provinces, The Breadner Group distributes new trailers and provides new trailer services and aftermarket parts. It had revenues of about US $135 million in its fiscal year ended Sept 30, 2000, and employs approximately 130 people.
Manac Acquires Fabrex of Trois-Rivieres Semitrailer manufacturer Manac of Ville de Saint-Georges, a division of The Canam Manac Group Inc, has announced its $9-million acquisition of certain assets of the semitrailer manufacturer Fabrex of Trois-Rivieres, owned by Remorques Trois-Rivieres Inc, a subsidiary of the United States-based firm RailAmerica Inc.
The transaction includes the acquisition of a plant with an area of about 100,000 square feet in Trois-Rivieres, the Fabrex brand name as well as a certain quantity of raw material and finished product inventory. The company fabricates aluminum dump trailers and specialized waste disposal units.
Hookup.com Growth Seen as Industry Trend An online truck, trailer, and equipment auction site called hookup.com recently reported tremendous growth in activity on its auction during the fourth quarter that shows the industry is beginning to look toward the Internet for equipment.
After upgrading its format by offering a new user-friendly site design and online 24/7 auctions, bidding activity increased from 150 bids in August to well more than 2,280 bids in November. As of December 11, more than 1,730 bids have already been placed on hookup.com, resulting in more than $444,000 in sales. More than 4,700 bids total are projected for the month.
To be eligible to participate on www.hookup.com, registration is required but free. Listing packages are available. For more information, phone 800-241-6195 or e-mail [email protected]
McClain Industries Inc Sets Sales Record McClain Industries Inc has announced record sales, but a loss for the year ended Sept 30, 2000. Sales for the year increased to a record $141,117,959 compared with $140,604,885 in fiscal 1999. The net loss for the year ended Sept 30, 2000, was $85,854, compared with net income of $4,181,938 in fiscal 1999.
"Sales and earnings were significantly affected by a slowdown in the E-Z Pack and Galion Dump Body divisions, which began during the third quarter of fiscal 2000," said Kenneth McClain, president and chief executive officer. "The continuing sales slowdown in the package dump truck market and our inability to profitably compete led to our decision to exit this market and to liquidate the entire Galion dump body truck chassis inventory during the fourth quarter, resulting in a loss of $1.75 million on sales of truck chassis. Overall, the truck group lost $3.5 million. We expect sales to remain weak into the second quarter of fiscal 2001."
McClain manufactures solid-waste handling and transportation equipment for the waste disposal and recycling industry, as well as a line of dump truck bodies.
Navistar Completes Brazilian Purchase Navistar International Corp will acquire the remaining 50% of an engine-making unit from Brazil's Iochpe-Maxion SA for $83.5 million. Navistar bought half of Maxion International Motores Ltd in March 1999 and will now exercise its option for the rest, the companies said. Roy Wiley, Navistar spokesman, said the transaction will be completed at the end of January 2001.
The purchase will give Chicago IL-based Navistar more influence in the South American diesel engine market. Maxion already supplied Navistar's South American operations with 7.3 liter, V-8 turbo diesel engines.
ITW Corp Purchases Division of Donovan ITW Corp has purchased the Insulated Products Division of Donovan Enterprises to add to its group of companies serving commercial transportation. Donovan founded this division in 1985 and developed the first foam bulkhead used in tractor/trailers - the Big Bun. The Skinny Bun followed, and Donovan also developed its Centerline Divider System.
ITW companies include: - Shippers Paper Products, which has manufactured load securement air bags and void fillers for more than 25 years.
- ITW CargoSafe, which manufactures load securement products.
Valspar, Lilly Industries Complete Merger The Valspar Corp and Lilly Industries Inc have announced that their merger has been completed, and as a result Lilly will become a wholly owned subsidiary of Valspar.
Shares of Lilly Class A common stock have ceased trading on the New York Stock Exchange. As a result of the merger, each outstanding share of Lilly Class A and Class B common stock will be converted into the right to receive $31.75 in cash without interest. Registered shareholders of Lilly will receive notice and instructions from National City Bank, the payment agent, regarding the process to exchange their shares for the cash payment upon submission of customary documentation. Lilly shareholders whose shares are held through banks, brokers, and other depositary institutions will receive information about their holdings from those institutions.
Salt Production: The Event of the Season Though winter 2001 is already a headache for highway agencies, it may have a silver lining for the salt industry. Analysts expect salt used this season may help the industry exceed its 20.1 million-ton production record set in 1996.
The Salt Institute of Alexandria VA says deicing roadways helps reduce wintertime accidents by 88.3%. In economic terms, deicing has an even greater impact. It costs between $4.8 billion and $5.6 billion a day if road conditions prevent goods and services from being delivered.
The blizzard of 1996, for example, had an economic impact of $19.2 billion to $22.4 billion stemming from road closures due to ice and snow, said the institute.
Yet timing is crucial when it comes to deicing roads with salt. Road salt must be laid down before a winter storm hits in order to prevent precipitation from bonding with pavement. Anti-icing, a strategy heavily used in Europe, is promoted in this nation by the Federal Highway Administration as an effective winter storm strategy for highway crews.
Deicing itself must begin soon after a storm hits so the salt can penetrate and bond with snow and ice to create a brine-like solution that is easily plowed off streets.
Salt is usually applied in amounts anywhere from 300 to 800 pounds per two-lane mile, according to the Salt Institute, though environmental, temperature, and road conditions can affect the application rate. Most road clearing agencies boost salt's deicing capabilities by "prewetting" it with one of several chemical solutions - liquid sodium chloride, liquid calcium chloride, or magnesium chloride.