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Dec 1, 2000 12:00 PM, MODERN BULK TRANSPORTER STAFF

In a move to reduce costs amid slowing United States truck sales, DaimlerChrysler AG and Caterpillar Inc have announced an alliance to develop and make engines and fuel systems for commercial trucks.

DaimlerChrysler and Caterpillar said they signed an agreement to combine purchasing, manufacture, and research for midsize engines used in buses, delivery trucks, and power generation. The companies plan to complete the agreement in second-quarter 2001.

The companies expect to increase engine sales by improving technology with combined research that will cost both companies less, according to Richard Thompson, head of Caterpillar's engine group. Improved engine and fuel-systems technology also could be sold to outside customers, Thompson said.

Caterpillar and DaimlerChrysler will jointly develop and sell fuel systems and other parts for engines, transmissions, and axles. They also will jointly conduct research and develop combustion and exhaust systems to reduce pollution produced by engines.

Eight Caterpillar plants will be involved, including Pontiac and Mossville IL; Greenville SC; Jefferson and Thomasville GA; Peterborough, England; Nuevo Laredo, Mexico; and Gosselies, Belgium. The six DaimlerChrysler plants that will be part of the venture include Glatten, Wolfratshausen, Rellingen, and Mannheim, Germany; Grand Rapids MI; and Sao Paulo, Brazil. Neither company said they expect layoffs to result from the alliance.