Freightliner Renegotiating Sale-Repurchase Contracts
Oct 6, 2001 12:00 PM
Facing a loss of about $1 billion this year, Freightliner LLC is pressuring truck fleet customers to renegotiate sale-repurchase contracts, according to a report in the Wall Street Journal. Freightliner officials contend that the company can no longer afford those contracts.
Freightliner’s losses result largely from the collapse in values of used heavy trucks during the worst commercial truck industry slump in nearly two decades. Freightliner already is stuck with thousands of used trucks and is obliged under contracts with some large fleet customers to buy back thousands more at prices far above their current resale value.
For the past few months, Freightliner executives have been meeting with truck fleet customers and telling them that the manufacturer can no longer afford to honor those contracts. Freightliner reportedly has proposed that fleets keep their trucks an extra year or two and accept less money from Freightliner when they do return them. It’s unclear at this point how many fleets have agreed to the Freightliner request.