THE CAPITULATION OF CAT
Cat trucks are on the edge of extinction, bringing to a close one of the most tumultuous, disjointed and ultimately disappointing brand histories to ever impact the Australian trucking industry. In this special report, Steve Brooks reflects on a past and
IF, SOMEWHERE in a future far, far away, the Caterpillar company decided to rejoin the mainstream truck business in any shape or form, it would surely be an amnesiac or perhaps cerebrally challenged individual who would, with any confidence, give anything more than cursory consideration to forming an association with the yellow brand.
Not necessarily because of any fundamental flaw in whatever product the company may decide to produce, but because history has the remarkable and often ugly capacity to repeat itself.
And let’s face it, the modern history of Caterpillar’s association with the Australian trucking industry is drenched in dubious assumptions and abandonment of those loyal individuals who, in more cases than not, literally bled yellow.
It’s a long, convoluted story and US outfit Navistar certainly plays a major and somewhat moot role, but we’ll get to that in due course.
As things stand right now, there are little more than a handful of new Catbranded trucks remaining on dealers’ lots, and the likelihood, according to many sources within the Cat network in this country, is that once current stocks run out, there will be no more.
From all appearances, typified to some extent by their complete absence from the recent Brisbane Truck Show, Cat-branded trucks will simply slink into oblivion. No noise, no fuss, no explanation, and almost certainly no apology for any inconvenience.
Gone, just like the engines which were once such a proud and prominent player in the big end of the truck business, and yet again leaving Cat’s often maligned dealer group to maintain parts and service requirements for engines and trucks bearing the iconic nameplate.
And it’ll be the same dealer group left to wrestle with the wrath of disgruntled operators who took the Cat truck plunge believing – naively perhaps, given Caterpillar’s 2008 desertion from the on-highway truck engine business – that the master of buckets and blades would not abandon its trucking faithful a second time. Naïve indeed! Even so, in the cold, hard light of commercial reality, any capitulation of the Cat brand from the truck business should not come as a complete surprise. After all, sales numbers over the past few years in particular tell the simple, sombre truth that Cat trucks have not done well, failing dismally on the back of
“In all of 2016, just 63 Cat-branded trucks were sold across the country”
a brazen belief that a Cat badge and yellow engine would be enough to ensure success and, in the process, dissolve the disappointment of its ’08 exit.
In all of 2016, just 63 Cat-branded trucks were sold across the country, representing a miniscule 0.6 per cent of the total Australian market for heavy- duty trucks.
This year is shaping to be no better with a paltry 31 trucks delivered in the first six months.
Obviously enough, these are not figures to build faith in the future, nor a fiscal foundation commensurate with the requirements of a hugely competitive industry where truck operators are spoilt for choice. So given the numbers, Cat’s dawdling demise from the trucking fraternity has over the past few years at least become increasingly predictable.
No matter how you look at it, though, it’s all a far cry from the hype and hope of 2010, when the world’s first Cat-branded highway trucks were launched in a big-budget event under the star-speckled sky of central Australia.
In close to 40 years of reporting on trucks from almost every part of Earth, I’ve managed to collect a few mementoes from one new model launch or another, but among the most intriguing is a framed boomerang accompanied by a small plaque stating ‘Cat Trucks World Launch, Uluru Australia 2010’.
Seriously, as far as truck launches go, it would take something very special to beat the Cat trucks release at Uluru. Stunning!
Funny thing, though, I’d been to another impressive truck launch in the same place under the same star- speckled sky more than a decade earlier when Iveco launched the original, uniquely styled ‘Darth Vader’ Powerstar. The irony, of course, is that Iveco is once again in corporate cahoots with International parent Navistar for the supply of the International ProStar model on which the Cat truck is based.
However, back in 2010, there was definitely no love lost between Iveco and International. To cut a long story very short, the two had enjoyed a reasonably successful association for several years, with Iveco assembling and selling International 7600, 9200 and 9900 models. Even today, there are people who bemoan the departure of those trucks from the Australian market – not least a few who still work for Iveco.
Anyway, the association with Iveco came to a blunt end after Navistar and Cat conspired to form an entity
called NC2, or ‘NC squared’ as some would call it.
Code-named ‘Big Tuna’ in its formative phase, the deal between Cat and Navistar had been on the drawing board for quite a while, with some US commentators suggesting that at least part of the reason for NC2’s creation came from Cat’s begrudging realisation that its much-touted ACERT technology was not the North American success it had hoped for.
More to the point, perhaps, Cat viewed the increasing prevalence of US truck makers sporting their own engines ( Paccar MX, Daimler and Detroit, Volvo and Mack) as a direct impediment to the ongoing viability of its on-highway truck engine business.
Consequently, with a dwindling slice of the North American heavyduty truck business, and faced with massive development costs if it were to meet the US 2010 emissions standard, Cat in 2008 threw in the towel, hanging up the gloves in its long and loud technology battle with Cummins and Detroit.
More appealing, certainly more convenient, vastly less expensive, and a seemingly practical way of exporting engine stocks soon to be obsolete in the US, was the prospect of ‘creating’ its own brand of highway truck for markets with less demanding emissions constraints. Australia, for example! And judging by early comments by people like former Westrac chief Jim Walker, there were powerful Cat dealers in Australia right on side with the prospect of again adding the trucking industry to the business portfolio.
All Cat needed was an agreeable truck maker to share the risk and, maybe, the rewards. For whatever reasons, Navistar bit the bullet, big time!
However, as time would also show, not everyone within Navistar’s executive sanctum was in love with the idea of a close coupling with Cat. During a visit to Navistar’s Chicago headquarters in late 2014, a senior executive, who would soon be one of several Navistar veterans sent to Australia to sort out the aftermath of the NC2 kerfuffle, openly conceded that the deal with Cat was flawed from the start.
His blunt and fiercely expressed opinion, like several others during and after that trip, was that rather than climb into the corporate cot with Cat, International would’ve been better served by either continuing its established relationship with Iveco, or entering the Australian market with a direct factory-backed operation. Or, given the fact Navistar had plenty of pressing issues in the US to contend with, maybe forget about the Australian business altogether.
Like it or not, though, NC2 went ahead and the deal was formalised in the US in September 2009. Initial indications were that any Cat-branded truck would be developed specifically for heavy haulage, mainly vocational work in oil fields, mine sites and the like with models known as the CT660 and, later, CT680.
It was soon apparent, however, that much bigger plans were at play with development of the CT610 and CT630 highway models, powered by Cat’s C13 and C15 ACERT engines respectively. The trucks were to be initially based on International’s TranStar and ProStar models but it wasn’t long before both would be built on the sleek ProStar platform.
Yet while the 2010 Uluru event was a ‘world-first’ unveiling of Cat-branded highway trucks, it was actually a press conference at a Melbourne truck show earlier the same year – less than two years after Caterpillar’s departure from the on-highway engine business and just a few weeks after scrapping the relationship with Iveco Trucks Australia – which left no doubt of NC2’s intention to make a bold play for the Australian market, among others.
MEN AND MACHINES
There were big plans for NC2, including talk of a Cat-badged cab- over, and a statement issued at the Melbourne press conference proclaimed: “The joint venture leverages the potent combination of Navistar’s truck manufacturing expertise and Caterpillar’s powerful global network [and] a 2010 business plan has been formalised embracing high-potential markets, with initial focus on Australia, Brazil and South Africa.”
Australia was defined as a ‘highpriority’ market and, as events would soon reveal, it certainly rated higher than Brazil and South Africa, where Cat trucks simply failed to launch. Soon enough, the big plans would be in disarray, if not decay.
Meantime, heading the Melbourne press conference was Navistar executive and NC2 president Al Saltiel, alongside former Volvo Australia operative Jeff Tyzack, newly appointed as NC2 general manager of sales and marketing.
In the background, though, standing quietly at the back of the room among a group of Cat and Navistar executives, was a man well known to the Australian market – Caterpillar’s Bill Fulton.
Corporate Cat to the core, Fulton was the front man for the truck engine business in Australia when Cat pulled the plug in 2008.
Beating a hasty retreat, he was soon back in the US, effectively abandoning Cat’s local and incredibly loyal representatives to face the ire of an army of engine customers bleeding yellow blood. Little was heard of Fulton again until 2011 when he became the first of a string of managing directors to head the truck business based at Cat’s Tullamarine
“Navistar bit the bullet, big time!”
( Vic) facility. In an interview soon after taking the reins of Cat trucks here, Fulton was asked: “Do you concede that Cat’s departure [from the on-highway engine business] was badly managed and left a sour taste in the mouths of Australian customers who had been loyal to Cat?”
In what could only be termed a soft response, he replied: “From a communications standpoint, we could’ve handled it better,” then proceeded to deliver a lengthy and long overdue commentary on Cat’s reasons for the engine exit.
Nonetheless, it first seemed Bill Fulton and Jeff Tyzack, backed by the pragmatic Adrian Wright as chief engineer and the innovative marketing mind of Glen Sharman, would provide a solid platform for the long-term future of the Cat trucks’ expedition into one of the world’s toughest truck markets.
Unfortunately, it wasn’t to be, and, for reasons which have never become clear, Tyzack departed suddenly, taking with him the local experience so critical to the brand’s formative performance in a hugely competitive market.
Yet Bill Fulton’s tenure wasn’t too extensive either. Just a year or so later, he, too, was gone as NC2 unravelled and Navistar hurriedly took control, creating a company called Navistar Auspac to import CT610 and CT630 models built and marketed under a licensing agreement with Cat.
However, management structures at Navistar Auspac have been nothing short of farcical. Appointed to run the new entity after serving a short stint as Fulton’s lieutenant was former Detroit Diesel and Freightliner executive Kevin Dennis.
But he didn’t last long either, opting to join the burgeoning Penske organisation, where he is now managing director of Penske Commercial Vehicles. After that, Navistar Auspac sailed under a couple of short-term masters retrieved from International’s executive archives: the taciturn Dave Allen and the likeable Tim Quinlan, each ultimately following the other into retirement.
Left to steady the ship, at least in an operational sense, were the two people who had remained loyal to the Cat cause from day one, Glen Sharman and Adrian Wright. Soon enough, Sharman’s days were done, while Wright is now largely ensconced in the latest Iveco and International venture.
What’s left is a jumbled Navistar Auspac Cat trucks operation run by a skeleton staff guided again by veteran International executives including one based in Johannesburg, South Africa. Go figure!
For a short while, however, Bill Fulton wasn’t completely out of the picture. Back in the US, he was next seen in a video promoting Cat’s decision to separate from Navistar and go its own way with building the square-jawed CT660 and CT680 on-highway vocational models.
Yet despite the claims of greater commitment to truck operators, Cat’s decision to go it alone with the vocational trucks was soon another dead venture. In early 2016, Cat HQ in Peoria, Illinois, issued a statement announcing the end of production of its vocational trucks, citing the business climate in the truck industry and a thorough evaluation of its own business as its reasons for withdrawing from the market.
In comments remarkably similar to those made in 2008 when it pulled out of the truck engine business, a Caterpillar spokesman explained: “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.”
Cat was finally and officially wiping its paws of the truck business. Over and out!
In corporate terms, the ball was now completely in Navistar’s court, basically left to pick up the pieces, with Cat’s only apparent involvement being continuation of the licensing agreement to use the brand and the yellow engine.
Still, Navistar Auspac at least attempted to deliver something more than simply a continuation of a Cat trucks business struggling for existence in a crowded market. In fact, and despite the chasms of corporate complexity, local engineering continued to produce models well suited to the Australian market.
With the versatile ProStar obviously providing the platform, the standard day cab, extended sleeper and the flagship CT630LS models were joined by the CT630S for highvolume B-double work and, soon after, its full sleeper version – the impressive CT630SC. Last came the CT630HD, a model aimed at satisfying the requirement for a triples-rated prime mover.
But again, as the numbers testify, it has all been to little avail.
Navistar’s end game, it appears, is to see the Cat venture to its inevitable end while securing the platform for the reintroduction of the International brand through a new deal with Iveco. Fortunately, ProStar in Cat guise has at least shown its ability to be
“The product and its customers deserved better”
a durable and versatile competitor under Australian conditions.
And therein resides the great disappointment and even sadness of the Cat trucks adventure – the product and its customers deserved better. So, too, did some of the people at both company and dealer level who gave the exercise their best shot and stayed loyal despite market adversity and remarkable corporate ineptitude.
There’s no question that across Australia there are many operators more than satisfied with their decision to buy a Cat truck. In far more cases than not – everywhere from Darwin to Tasmania, Brisbane, Sydney, Melbourne across to Adelaide and Perth, even the desert heart of the country – various Cat models have showcased inherently high standards of handling and road manners, reliability, performance, fuel efficiency and comfort which have at least kept the product respectable.
In short, the truck has shown itself to be far more resilient than the brand.
Other issues, however, have not been so great. Cat service in some areas has not been up to scratch, but arguably the greatest detriment to the product’s progress has been the inconsistency of the entire exercise and, specifically, the lack of corporate commitment right from the start.
In fact, it’s at the start where we probably find the most salient reasons for the end.
… AND FINALLY!
Again, the Uluru launch of Cat trucks was exceptional in scale and scope. About 300 guests and their partners were flown in to be part of a ‘world-first’ event with the sole aim of letting the wider world know that the vast Cat organisation, with all its strength, resources and wealth, had partnered with truck manufacturing giant Navistar to enter the on-highway truck business. But only outside North America.
Of course, there were those among the audience who still carried a sour taste of Cat’s retreat from the truck engine business, and, as one yellowblooded fleet owner told me at Uluru, “It came as a shock and, fair dinkum, gutted us.
“We’d been loyal to Cat for years and I’d hate to think they’d do it again if the trucks didn’t live up to their sales targets over the next few years.” Little did he realise!
However, such was the passion for yellow iron that the same man was among many to say he would not let his disappointment of Cat’s withdrawal from the engine business deter his consideration of a Cat truck. But what may have deterred him, at least initially, was the price.
Despite the fact that the first CT610 and CT630 models had a relatively limited specification and were untried in the Australian market, NC2 chief Al Saltiel was determined to label Cat a top-shelf contender. Indeed, the vociferous claim was that the Cats were equal to any other premier brand on the market and would therefore come with a premium price.
This was despite the fact that many people at the launch event saw the Cats fitting neatly into the void left by the recently defunct and relatively basic Sterling brand, rather than matching it for quality and price with the likes of Kenworth and Western Star.
Yet Al Saltiel stuck stubbornly to the script. In fact, several times during an occasionally testy press conference, Saltiel was asked if he was being overly optimistic or even arrogant in his assessment of the Cat trucks’ position against such established competition. And each time he fired back with increasing annoyance that Cat was at least the equal of any brand in the market.
As time would soon show, though, an indefensibly inflated price tag would be one of the biggest barriers in Cat’s early efforts to build a foundation in the Australian market.
Back at Uluru, much hype also surrounded the fact that Cat engines were back in the Australian market. Fair enough, but the hype was partnered by an undisguised assumption that lovers of yellow iron would be only too happy to buy a truck carrying the same badge as the engine. A big assumption indeed.
Likewise, a big noise was made about the local assembly of the trucks at Cat’s Tullamarine plant. About 540 trucks would ultimately be built there, all hastily put together to beat the deadline for a new emissions standard (ADR 80/03).
After they were built, though, workers were paid off and trucks were simply imported from the US.
However, the impacts of high price, a largely untried truck, a glut of stock with ageing compliance plates, and backlash from Cat’s exit from the engine business – even today, it’s hard to know if Cat and, to a lesser extent, Navistar, ever fully comprehended the extent of derision – all combined to make Cat a hard sell.
Yet none of these things entered the equation at Uluru and it was, I must admit, easy to be caught up in the hype and the hope. The product had potential, no risk.
Here’s the thing, though. As festivities at The Rock drew to a close, it became blatantly clear that no one from Cat in the US had even bothered to attend the launch. Sure, there were a couple of Cat’s local representatives, but the silence from head office in Peoria was as deafening then as it is now. Anyway, I still have the boomerang to prove I was there. Better still, I reckon it’s the non-returning type.
Navistar US executive and first president of the failed NC2 venture, Al Saltiel at the spectacular 2010 launch of Cat trucks in Central Australia. No one from Cat in the US bothered to attend
Smiles all round in late 2011: Left to right, Jeff Tyzack and Bill Fulton before an acrimonious split, and former Westrac chief Jim Walker. Unfortunately, ‘100% Committed’ proved to be a hollow claim XXXX
Flagship: Cat CT630LS working for Dunn’s Earthmoving in the harsh conditions of the Moomba oil and gas fields. In more cases than not, durability has been a strong point for Cat trucks
Yellow iron: C15 ACERT engine did well in Australia but Cat’s abrupt 2008 departure from the truck engine business left a sour taste. Creating a Cat truck did little to soften the scars
Construction Cat: initial thoughts were that Navistar and Cat would build vocational models only but bigger plans were in play. Even so, Cat would eventually walk away from the truck business completely
Despite the corporate complexities, local product development continued with models such as the CT630S designed specifically for Australian B-double work
International ProStar provided the platform for the Cat trucks exercise and is now the foundation of a renewed relationship between Navistar and Iveco
Triples rated: CT630HD was the last major local development for Cat trucks in Australia. Operator interest was stymied by questions over Cat’s future