Surviving the economic cycles involves the ability to adapt. Markets evolve over time with the ebb and flow of supply and demand, so companies diversify, simplify and change to bolster business and make a profit.

Since the turn of the century, vehicle and truck manufacturers like GM have adapted to the cycle’s many highs and lows. With recession looming in 2008, General Motors Corp. recently announced it is taking further steps to regulate its business to rapidly changing market conditions, marked by the weak U.S. economy, record high fuel prices, shifts in consumer vehicle preferences and the lowest U.S. industry sales volumes in a decade.

“We are responding aggressively to the challenges of today’s U.S. auto market,” said GM chairman and CEO Rick Wagoner. “We will continue to take the steps necessary to align our business structure with the lower vehicle sales volumes and shifts in sales mix. We remain committed to bringing to market great products that target changing consumer preferences for more fuel-efficient vehicles.”

The reductions will be partially achieved through further adjustments in truck capacity and related component, stamping and powertrain capacity in response to lower U.S. industry volume. Truck capacity is expected to be reduced by 300,000 units by the end of 2009, half of which is from acceleration of prior announced actions and half from new capacity actions.

For liquidity planning purposes, GM is using assumptions of U.S. light vehicle industry volumes of 14 million units in 2008-2009, which are significantly below trend. Other planning assumptions include lower U.S. share of approximately 21 percent and continued elevated average oil price estimates ranging from $130 to $150 per barrel by 2009. Based on those assumptions, GM is taking actions to further reduce structural cost and generate cash, with the goal of maximizing liquidity.

At the end of the first quarter 2008, GM had liquidity of $23.9 billion, with access to U.S. credit facilities of an additional $7 billion. While the company has ample liquidity to meet its 2008 funding requirements, it is taking additional measures to bolster liquidity to protect against a prolonged U.S. downturn. The actions include a combination of operating and related actions, as well as asset sales and capital market activities. The cumulative impact on cash through 2009 is projected to be approximately $15 billion.

Through a number of internal operating changes and other actions, GM expects to generate approximately $10 billion of cumulative cash improvements by the end of 2009, vs. original plans. GM will reduce and consolidate sales and marketing budgets, with a focus on protecting launch products and brand advertising. Engineering spending in 2008 and 2009 will be substantially lower than original plans. These operating actions, combined with the benefits of the 2007 GM-UAW labor agreement, are targeted to reduce North American structural cost from $33.2 billion in 2007 to approximately $26 to $27 billion in 2010, a reduction of $6 to $7 billion.

GM plans further salaried headcount reductions in 2008, which will be achieved through normal attrition, early retirements, mutual separation programs and other separation tools. Read more about GM’s plans at www.gm.com/corporate/about/news.

Buhler to Divest Compact Wheel Loader Line

Over the decades, many brands have joined the Buhler family of agriculture and construction equipment: Farm King, Allied, Inland and Versatile. When Standard Gas Engine Works was purchased by John Buhler in 1969, the company set a course for expanding its product portfolio.

Now, you can become apart of the Buhler family — or at least purchase a part of its history. Buhler Industries Inc. is divesting its line of compact articulated wheel loaders and accessories. In fact, proposals for the purchase of the Buhler B56 line, including several completed units, parts, tooling and accessories will be accepted immediately.

“We reviewed the core areas of our business and made some tough decisions,” explained Maxim Loktionov, vice president of Buhler Industries Inc. “At present we are focusing specifically on the global agriculture market and are allocating our resources with that in mind. As a result, we’ve decided to explore other options for the B56 product line.”

The B56 is an articulated wheel loader that features a 56-hp Kubota engine and is available with a wide array of attachments for maximum versatility. The B56 has a breakout force of 9,200 lbs, hydraulic flow of 17 gpm and driving speed up to 15 mph The successful buyer will also receive intellectual properties such as bills of materials and dealer and vendor listings. Full details are available at www.buhler.com/b56.

Buhler Mfg. is a division of Buhler Industries Inc. that designs, manufactures and distributes agricultural equipment. Buhler operates seven modern manufacturing and nine distribution centers totaling over 1.6 million sq ft of facilities in the United States and Canada and employs more than 800 people.

"Trick My Truck" Outfits Beekeeper with New IMT Rig

The better the hive, the better the honey — it’s a sentiment a grateful beekeeper from Oklahoma is enjoying, with the increased productivity and safety of an IMT crane truck. Iowa Mold Tooling Co. Inc. (IMT), an Oshkosh Corp. company, contributed an articulating crane and operator-training services to a lucky trucker in Tipton, Okla., for an episode of “Trick My Truck” on CMT.

Gary Grose, manager of Tipton Valley Honey Co., received a Hino chassis decked out with an IMT 4/29 articulating crane. The episode featuring Grose premiered on July 4 on CMT. The IMT 4/29 articulating crane features a maximum reach of more than 22 ft and a maximum lifting capacity of 4,520 lbs. It also sports an overload protection system, and Grose’s model came with radio remote controls.

“We are honored to have been asked to participate in this unique opportunity and to be a part of such a special occasion,” said Steve Fairbanks, IMT president. “When we heard about Gary’s situation, we quickly realized how much he would benefit from one of our cranes.”

CMT’s hit series “Trick My Truck” aims to improve the lives of American truck drivers who are in need of a much-deserved break. The cast of the show “steals” the rigs of lucky drivers and then alters the trucks, ultimately improving the truckers’ lives. Grose is going to use the new crane to deliver pallets of beehives from field to field across the country. He previously used a skid steer loader to move the hives around, but that method involved a great deal of manual labor. He said that not only is the crane going to help him be more productive, but it’s also going to mean safer operations for his field crew.

“Beekeepers usually face safety issues such as heat stroke. We wear protective gear out in 110-degree heat while lifting 100 boxes of honey, 75 lbs each, every day,” Grose said. “Now that the crane will do the heavy lifting for us, we’re going to cut down immensely on heat stroke and back injuries.”

Sew Fine
Six Retro International Harvester Fabrics Now Available

Quilters, crafters and sewers — it’s an audience we typically don’t address directly in the pages of Compact Equipment. Yet the time-honored traditions of the fabric arts and other pioneer crafts are linked to the classic age of equipment (especially farm machinery).

A good example is the brand equity of International Harvester and its red tractor prints. Craft connoisseurs have been searching for retro International Harvester, Farmall and McCormick fabrics for years. That wait is over. Case IH is partnering with Cranston to produce new “red tractor” printed fabrics for the V.I.P brand. And with names like Farmall Tractors, Barnboard Patch and Antique Tractor, these designs are just what the stitcher ordered.

“Every week, I get at least one inquiry from folks who want classic Case IH fabrics,” said Sarah Pickett, Case IH licensing and merchandising. “And that doesn’t include Case IH dealers who regularly get similar requests from their customers or Case IH employees who have been requesting these for years.”

That’s why, in addition to making the new fabrics available at retail chains such as Hancock Fabrics — and online outlets including www.bearpawquilting.com, www.overrainbow.com, www.FavoriteFabrics.com and soon at www.equilter.com — they also will be stocked in the future at participating Case IH dealers.

“Those sewers interested in buying close to home also can call Cranston’s customer service line at (800) 876-2756, and we’ll be happy to let them know what stores in their local area are carrying these fabrics,” said Donna McKinney, Cranston marketing brand manager.

Volvo to Produce Backhoe Loaders in Mexico

Mexico is an attractive location for industrial activities. The American neighbor has become a major power player in international manufacturing trade with increasingly strong export prowess and a growing number of free trade agreements.

In order to increase its efficiency and improve volume and profitability, Volvo Compact Equipment will start production of its backhoe loaders in Mexico. The production will start in early 2009 in the existing Volvo Bus facilities in Tultitlán in the State of Mexico (approximately 40 kilometers north of Mexico City).

“Starting backhoe loader production in Mexico opens up a great opportunity for Volvo Compact Equipment to sell more machines and at the same time, improve our profitability significantly. This is the logical and crucial next step in our Path to Profit ‘09 strategy,” said Andy Knight, president of Volvo Compact Equipment.

The machines to be produced in the facilities in Mexico are the center-mount backhoe loaders, models BL 60 and BL 70. These models are currently produced in Wroclaw, Poland, and mainly sold to North America. Initially, the production will be the assembly of CKD-kits, delivered from the Wroclaw, Poland backhoe loader factory.

With a production base in Mexico, Volvo Compact Equipment will be able to profitably grow backhoe loader volumes in Latin America as those economies develop, said Volvo officials. As Mexico is a member of the North American Free-Trade Area (NAFTA) and its economy is closely linked to the U.S. economy, there will be reduced currency risk in relation to the U.S. dollar. Mexico is also a growing industrial location with an excellent supplier base, noted Knight, close to the key markets of North America as well as Latin America with excellent logistics infrastructure in roads and ports.

As for the Wroclaw operations, the move of the center-mount machines to Mexico will release capacity to meet increased demand for side-shift machines, which are mainly sold in markets outside of the Americas. Wroclaw will remain the core plant for the Backhoe Loader Product Area and will, in the start-up phase, supply CKD-kits to the production in Mexico.

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