Caterpillar to discontinue trash trucks and other on-highway vocational trucks

Dive Brief:

Less than a year after announcing plans to independently design and manufacture vocational trucks at its Victoria, TX plant, equipment manufacturer Caterpillar Inc. announced it will stop making on-highway vocational trucks — namely garbage trucks, dump trucks, and mixers — effective June 2016. The company cited the current business climate due to a weak market as the reason.
While Caterpillar is no longer accepting new orders, the company stated it will continue to support existing truck customers and service the trucks already on the road. The changed business plan will impact 70 positions, beginning in March 2016.
In addition to this news, Caterpillar announced that its current vice president Steve Niehaus is retiring, and the company has plans to restructure its electric power and marine and petroleum power divisions.

Dive Insight:

This announcement is just another example of how volatile markets impact the solid waste industry, even in indirect ways.

It wasn’t that long ago that Caterpillar saw a bright future in vocational trucks for the waste management sector. Just over three years ago, the company launched a wheel excavator for trash and recycling, touted as being designed for work areas with limited space while retaining practical features of the conventional model.

In fact, the withdrawal from the market comes a little over three years after Caterpillar launched its very first vocational truck, partnering with Navistar, manufacturers of commercial trucks, buses, defense vehicles, and engines.

"Remaining a viable competitor in this market would require significant additional investment to develop and launch a complete portfolio of trucks, and upon an updated review, we determined there was not a sufficient market opportunity to justify the investment," said Ramin Younessi, vice president over Caterpillar’s industrial power systems division, in a statement. "We have not yet started truck production in Victoria, and this decision allows us to exit this business before the transition occurs."