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Sterling Gets Western Star, DaimlerChrysler Takes Detroit Diesel

In a one-two announcement in late July, Freightliner LLC announced it would buy Western Star Trucks while Freightliner's parent, DaimlerChrysler, said it was acquiring Detroit Diesel Corp.

The Western Star purchase could give Freightliner a bigger share of the Class 8 owner/operator, heavy-duty and vocational markets. The Western Star brand will be managed through Freightliner's Sterling Truck subsidiary, Freightliner President Jim Hebe said.

After the Western Star announcement, DaimlerChrysler said it would acquire all of Detroit Diesel Corp. Daimler already owned 21.3% of the engine builder.

Western Star's Class 8 market share is about 1.5% but growing as it ramps up production at a new plant in South Carolina. The trucks should become more popular with Sterling dealers able to sell them, and thus raise Freightliner's and Daimler's overall share in world vehicle markets.

The Detroit Diesel deal will create interesting reactions among truck builders, according to some observers. Freightliner Trucks can be expected to concentrate on Detroit and Mercedes diesels, leading toward a more vertically integrated product. But what will happen to Sterlings and Western Stars, which most often have Caterpillar power?

Meanwhile, Paccar's Kenworth and Peterbilt already shy away from Detroit because of Daimler's partial ownership, and this could increase that estrangement. And some feel the Detroit deal could also push International Truck and Engine, or its Navistar parent, to buy Cummins Engine.



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