PACCAR to begin production at St-Therese truck plant in September

BELLEVUE, Wash. (July 23, 1999) – PACCAR Inc.’s refurbished truck plant in Ste-Threrese, Que., will officially begin production in September, chief executive officer Mark Pigott said yesterday.

PACCAR, maker Kenworth and Peterbilt trucks, has spent the last 18 months and $80 million to rebuild and expand the factory. It was closed in 1996, suffering from both outdated, inefficient machinery and an untenable relationship with the Canadian Auto Workers.

When it reopens, the plant will be capable of producing 20,000 medium-duty trucks a year.

Pigott made the announcement to PACCAR shareholders while reporting the company’s latest financial results, “the best in PACCAR’s 94-year history,” he said.

The company achieved record sales and earnings for the second quarter and first half of 1999. Second quarter consolidated net sales climbed 18% to a record $2.2 billion compared to sales of $1.8 billion in the second quarter of 1998. Net income for the quarter surged to $139.5 million ($1.77 per diluted share), an increase of 33% compared with $104.9 million ($1.33 per diluted share) earned during the same quarter a year ago.

This is the tenth quarter in a row in which operating profits exceeded the comparable quarter a year earlier.

First-half 1999 sales and earnings also reached all-time highs. Sales for the first six months were $4.2 billion, an increase of 18% from the $3.6 billion recorded last year. Net income of $259.0 million ($3.29 per diluted share) for the first half of 1999 exceeded 1998 first-half earnings of $205.3 million ($2.61 per diluted share) by 26%.

“A 10-month industry backlog and good incoming order rate provide a platform for future growth. We are achieving market share gains in the class 6,7 and 8 markets as our build rates have increased 65% in the last 24 months,” Pigott said.

His only cautious words surrounded third-quarter financial results, which will include the impact of the traditional summer holiday factory closures at PACCAR’s DAF, Leyland, and Foden divisions.

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