Peterbilt Motors Company

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Peterbilt Motors Company

1700 Woodbrook Street
Denton, Texas 76205-7864
U.S.A .
Telephone: (940) 591-4000
Toll Free: (800) 4-PETERBILT
Fax: (940) 591-4112
Web site: http://www.peterbilt.com

Division of PACCAR Inc.
Incorporated: 1940
Employees: 2,000
Sales: $5 billion (2006 est.)
NAIC: 333924 Industrial Truck, Tractor, Trailer, and Stacker Machinery Manufacturing; 336111 Automobile Manufacturing; 336120 Heavy Duty Truck Manufacturing; 336211 Motor Vehicle Body Manufacturing; 441310 Automotive Parts and Accessories Stores; 532120 Truck, Utility Trailer, and RV (Recreational Vehicle) Rental and Leasing

PRINCIPAL COMPETITORS

ORIGINS

Though its name is closely associated with the romance of the lonely highway, Peterbilt’s history predates that of the U.S. interstate highway system. The company counts its founding date as 1939, but its predecessor, Fageol Motors Co. of Oakland, California, had been started in 1915. It was originally known for luxury cars, but soon shifted to trucks.

Like Peterbilt, Fageol had a reputation for making high quality trucks with the best possible components. A bid to expand to the East Coast failed, however, and in 1932 Fageol was taken over by the Waukesha Motor Company and the Central Bank of Oakland.

Six years later, Sterling Motors bought Fageol’s assets and announced plans to close the company. However, it was soon sold again to T. A. Peterman. According to The Evolution of Class, Peterman paid $50,000 for the factory and equipment, which was located on 13.5 acres.

Peterman ran a huge logging operation based in Tacoma, Washington, and needed logging trucks. Plans to produce a chain-driven model at the newly acquired plant did not pan out, but other trucks proved popular. The company’s new name, Peterbilt, came from a line of wood doors produced by one of Peterman’s facilities. The liberal use of plywood in the interior of early “Petes” was another link with Peterman’s lumber operations.

From April 1939, when Peterman bought the company, to the end of the year, Peterbilt shipped 14 trucks. The first was a partially completed model destined to become a fire engine in Centerville, California. In 1940, 82 trucks were made. While wartime rationing slowed production following the nation’s entry into World War II, within a couple of years, Peterbilt was producing for the military. By 1945 production was up to 324 units. In its earliest days, the plant kept busy by renovating various makes of truck.

POSTWAR INNOVATION

After the war, Peterbilt incorporated new materials and techniques into its production. Its trucks had had aluminum grills since the Fageol days, but the company began making more components such as hoods out of the lightweight metal.

The company’s trucks underwent a major restyling in 1949. Peterbilt soon brought out its first cab-over-engine model. These compact, boxy tractors could carry longer trailers than conventional models while remaining within length limits.

The company added a number of varieties of specialized working trucks in the 1970s. The Montreal plant began building garbage trucks in the early 1970s. (These were marketed under the Kenworth brand.) Peterbilt also rolled out new trucks for the construction industry.

The company was making as many as 17 different production models at a time. One of its most enduring successes was the Model 379, introduced in 1986. For many years, it occupied nearly all the production of the Denton, Texas, plant.

CHANGING FACILITIES

Peterman died in 1945, leaving the company to his wife, Ida. A group led by company President Lloyd A. Lundstrom then acquired it in a 1947 management buyout. With the land beneath the plant slated to become a shopping mall, the managers sold Peterbilt to Pacific Car and Foundry Company (later renamed PACCAR) in 1958.

PACCAR, based in Bellevue, Washington, made railcars and other steel items. It had owned rival Ken-worth Truck Co. since 1945. PACCAR allowed its truck brands to continue to operate independently of each other. Around 1959, Peterbilt’s print advertising had begun to feature the word “Class,” which would be a longstanding theme. While the company’s models underwent numerous stylistic refinements over the years, liberal use of polished chrome helped the brand retain its unique luster.

In August 1960, Peterbilt was moved south to PACCAR’s brand-new plant in Newark, California. It was soon making 800 trucks a year; production was nearly 2,800 units by 1965. Another Peterbilt plant was established in Nashville, Tennessee, in 1969. It was expanded within four years, as Peterbilt’s total production reached 8,000 vehicles. In 1975, the company set up a Canadian subsidiary.

Peterbilt opened a factory in Denton, Texas, in 1980. This plant was originally devoted to the Model 359. The manufacturing line at the Newark, California, facility closed in 1986. Moving production eastward helped support the brand’s geographic expansion, while taking advantage of much lower labor costs in the South.

NEW HQ IN TEXAS

In 1993, Peterbilt relocated its headquarters and about 200 employees from Newark, California, to a newly renovated office building in Denton Texas. Its plant there employed more than 1,200 people and had been expanded during the year.

The Tennessee plant had a couple of labor strikes in the 1990s; one in 1998 lasted more than six months. The plant in Texas was not unionized. In 2000, the company laid off a quarter of the roughly 1,500 employees and managers in Tennessee, complaining of a sluggish truck market. There was another strike in 2003 as the company again tried to shift more healthcare costs onto the workers. When the local union refused to ratify the contract, Peterbilt locked the workers out as negotiations dragged on for ten months.

COMPANY PERSPECTIVES

Peterbilt has reigned as America’s premium quality truck manufacturer since the company’s founding in 1939. Our dedication to deliver products and services focused on improving customers’ performance, image, profitability and peace of mind truly makes Peterbilt the Class of the Industry.

Peterbilt had built more than 197,000 trucks by the time of its 50th anniversary in 1989. Production had risen from fewer than 7,000 units in 1980 to about 18,000 by the end of the decade. Notable newer models included the 377, designed with an emphasis on aerodynamics and fitted with a fiberglass hood for weight savings and fuel economy.

A new 425,000-square-foot plant opened in Ste. Therese, Quebec, in 2000. It was dedicated to medium-duty trucks, which parent company PACCAR had identified as a key growth segment. There were layoffs at the other plants as the heavy truck market slowed. Sales conditions began to improve in 2004 thanks to a stronger economy.

THE ROAD AHEAD

Peterbilt’s last Model 379 was delivered in April 2007. More than 230,000 of this type had been built over the course of its 20-year production run. The Model 379 was replaced by the Model 389, which featured improved aerodynamics and other refinements.

Peterbilt continued to try new things. It introduced its first Class 5 truck, the Model 325, extending its range of medium duty trucks to those rated at less than 20,000 pounds gross vehicle weight.

Peterbilt quickly developed a product to meet a new series of emissions regulations for 2007. The Model 386, introduced in 2005 as fuel prices soared, was more efficient than its predecessors. It also offered improved visibility. It only took a year and a half to develop, the company’s chief engineer told the trade journal Fleet Owner.

Peterbilt had also begun to produce hybrid-powered trucks in limited quantities. These featured a drivetrain developed by Eaton Corporation. Wal-Mart Stores, Inc., which was aiming to make its fleet 25 percent more fuel efficient while cutting emissions, became one of the first customers in 2007. This was not Peterbilt’s first use of alternative power supplies. The company had built a couple of jet turbine–powered trucks in 1972.

PACCAR did not break down sales for its Peterbilt and Kenworth divisions, though they traditionally held similar market shares. The two together delivered 95,500 trucks in 2006, up 15 percent from the previous year. PACCAR’s truck revenues for the United States alone were $8.5 billion in 2006.

Frederick C. Ingram

KEY DATES

1915:: Fageol Motor Car Company is established in Oakland, California.
1939:: T. A. Peterman acquires assets of Fageol Motors and launches Peterbilt.
1947:: The company undergoes a management buyout following Peterman’s death.
1958:: Pacific Car and Foundry (PACCAR) buys Peterbilt.
1969:: Plant is added in Nashville, Tennessee.
1975:: Canadian unit is established.
1980:: Factory opens in Denton, Texas.
1986:: Long-running Model 379 is introduced.
1993:: Headquarters shifts from California to Texas plant.
2006:: Hybrid model is introduced.