"Caterpillar Inc. and Cummins Inc,, the two big U.S. diesel engine manufacturers, are at a crossroads, bankers say. The dilemma: To keep their heavy-duty truck engine operations rolling, will they need to align themselves more closely with a single domestic truck maker?"

"Which of the two is in the tougher spot? Cummins looks more vulnerable, according to some bankers. Engines are, after all, pretty much all the company does, while Caterpillar has a huge construction equipment business (which, ironically, is vertically integrated.)"

Interesting article.

http://biz.yahoo.com/rb/060302/column_mergers.html?.v=1

 

For some reason I could see that happening. Cummins making CAT engines for the Heavy Equipment.

 

By 2007 all the class 8 truck companys will be building their own engines in house. Cost and emission reasons. Think about it. The only ones that dont build their own engines are Pacar and WesternStar. The class 8 diesel engine market is going to be intresting by 2010.

 

What do bankers know??
From what I have read Cummins is in the forfront in diesel technology. They are making big inroads into Russia and Asia. Lot of these countries are adopting tier 3 diesel emissions so this should help Cummins bottom line. I know Cummins is doing well in China, but so has Cat.

MikeyB

 

In the past 2-something years, Cummins' stock has increased in price by a factor of 5. WOW. All I have to say about Cummins...

 

Don't use that as your only factor to judge how the company is performing. Remeber all the Tech stock that climbed in value, and then went bust, because there were no earnings to support the increase in stock prices.

I would think with all the new emissions criteria coming out over the next few years, most engine manufacturing companies are a bit worried, but they have known this is coming, and I am sure have made plans to deal with the extra expense involved (i.e. - pass it directly on to us )

 

Agree. Stock price is total non-sequitur to question at hand.

 

If you figure into the equation that Freightliner owns Western Star, then yes they are building there own engines i/e Mercedes and Detroit.

 

I'm with Mikey, scr?w the bankers and analysts. They sit around drinking coffee making a fat check but wouldn't know a nut from a bolt.