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Speculation (or knowledge) on the Chicken and Egg relationship between EMD and CAT

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Speculation (or knowledge) on the Chicken and Egg relationship between EMD and CAT
Posted by YoHo1975 on Wednesday, October 26, 2011 3:24 PM

So, this was sort of hinted at in the NRE genset thread and it's been discussed before and I've seen 2 very very distinct opinions floated on it, so I thought I'd make a thread about it and see if it would generate enough discussion to if not arrive at a likely explanation, then at least get all the opinions on the table. 

 

 

I've heard it suggested that Cat/Progress bought EMD purely for the access to the railroad market. That even if the 2-stroke 710 was better, that we would inevitably see nothing but Cat designed 4 stroke engines in EMD locos in the future.

I've heard other versions of this, that Cat, because they're struggling with their OTR engines wanted the 265H engine.

That cat wanted the EMD engineers that had figured out making the 710 compliant.

 

On the flip side, I've heard that CAT actually wanted the 710 engine. They want into the 2 stroke market. That the 710 is not going to have any problems meeting tier 3 and 4 and would be around for a long time.

 

Here are a few things we know. the 710 can now meet Tier 3 as EMD plans to start selling Tier 3 SD70s in January.

The PR30C with Cat a 3516 is currently in testing to get Certified Tier 4. But it uses "selective catalytic reduction exhaust cleaning equipment and a Zeit control system." whatever that means. 

EMD claims to have met Tier 4 on the 710 in the Lab environment but like GE says they expect release of tier 4 to be a years long project. 

 

Presumably the ECO repower program could go to tier 3 as well, but more to the point, as of right now, it looks like Progress and EMD are going forward with both CAT power and EMD designed 2 stroke on single engine ~high power diesels. So reports of 710's quick demise seem to not be particularly likely. 

But what about going forward? What is the wisdom of the trains.com forums going into the future? Will the 710 be the final 2-stroke design? Will EMD have power over locomotive prime mover design be it 2 or 4 stroke or will it just pick from the CAT catalog? Will 265H have an impact on anything? Will Progress and EMD continue to offer competing products in the repower market?

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Posted by jrbernier on Wednesday, October 26, 2011 7:30 PM

  Speculation is exactly what we have right now.  EMD's 2 stroke design is quite good at meeting emission control standards.  This design is one of the few(and maybe only commercial) 2 stroke medium speed power plants on the market.  EMD have been quite successfully in the marine and stationary power plant market.

  I would suspect that CAT bought EMD for a couple of reasons:

  • 2 stroke design expertise
  • Experience in the rail market

  CAT has their hands in both a 4 stroke and a 2 stroke solution - Their management is covering the bases.  I doubt that the 265H power plant will play into this.  It does not meet even Tier II standards(like the General Electric FDH).  It is now an 'export' market product.

Jim

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Posted by creepycrank on Wednesday, October 26, 2011 8:12 PM

CAT is big in the mining truck market and one thing they don't have is AC transmission. The competition ,Liebherr, use GE's AC set up. Other than that Progress Rail bought the plant in Muncie, IN with no orders and they bought a plant in Brazil also apparently with no orders. It maybe time for CAT to ask Progress Rail -what the heck are you doing?

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Posted by CSSHEGEWISCH on Thursday, October 27, 2011 10:20 AM

I'm quite sure that upper management in Peoria knows exactly what Progress Rail is doing with its new plants and various other business.

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Posted by creepycrank on Thursday, October 27, 2011 11:04 AM

CSSHEGEWISCH

I'm quite sure that upper management in Peoria knows exactly what Progress Rail is doing with its new plants and various other business.

The operative word is SPECULATION. After CAT bought EMD [ probably out of petty cash] they bought Bucyrus - Eire for 10 times as much. B-E makes the BIG stuff such as drag line mining shovels and mining trucks such as Terex and Unit Rig.  the 710 might be considered as a back up and there is the AC power transmission issue. Their competition is Liebherr and Komatsu

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Posted by D.Carleton on Thursday, October 27, 2011 1:51 PM

I suspect CAT purchased EMD of one reason, to make money. Railroading is once again in "growth" mode and CAT is going to capitalize on this market using EMD existing market share. It is a wise investment which should pay off in the long term.

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Posted by edbenton on Thursday, October 27, 2011 2:05 PM

Called a couple people I Know deep at Cat.  They bought Cat for 3 Purposes one was to get a Durable AC transmission system for their Heavy Haul Dump Trucks.  Second is to get a Larger Share of the Marine Market how are they going to do that Get rid of the 710 and 645 Series.  How can they do that simple Stop Supporting them.  Look what Mercedes Benz did in the OTR side with the 60 Series Detroit Deisel the Most Fuel Efficent Motor out there.  They bought out Roger Penske in 2005 and in 2006 the 60 Series was GONE replaced by the MBE 15 and it SUCKS from what every driver says. 

Last they bought EMD to have a larger Market for their larger line of 4 Stroke Diesel the 3500 and 3600 lines that make between 4000 and 6000 HP. 

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Posted by YoHo1975 on Thursday, October 27, 2011 4:50 PM

They don't need to get rid of the 710 and 645 to gain market share in Marine and stationary. Merely owning EMD gives them that market. 

 

Also, dumping support for the 645 and 710 sounds like a good way to lose every single EMD customer out there, not get them to shift to CAT designs.

After all, even ignoring the incredible bad will, GE will still gladly support 645 including new F blocks. Forcing a switch before these engines just naturally end of life seems unlikely. 

 

I thought the Muncie plant was a made in the USA requirement to even be considered for new Amtrak loco orders. Granted Amtrak's funding is far from assured at this point, but that was what I thought the purchase centered around.

Even ignoring that, London cannot produce as many SD70s as Erie can ES44s. That alone would justify increased capacity I would think.

 

I understand all we have is speculation, but we can apply logic and experience to that to come up with likely scenarios.  

AS for the Bucyrus-Erie purchase. They have an AC drive system already, so what does EMD offer there?

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Posted by beaulieu on Thursday, October 27, 2011 10:22 PM

edbenton

 

Last they bought EMD to have a larger Market for their larger line of 4 Stroke Diesel the 3500 and 3600 lines that make between 4000 and 6000 HP. 

Two points counter that first Progress Rail still has to convince the railroads that the Cat powered locomotives are ready for the big time, and second EMD doesn't make or own the designs for the AC Inverters that power its locomotives, they come from Mitsubishi. They do however build the traction motors. Also Cat will have to either redesign their big diesels to work with the EMD alternators or the Alternators to work with Cat diesels. Unlike with trucks where you are dealing with thousands of customers, there are only seven big railroads. Every other customer worldwide is either a piker, is going electric, or is China or Russia.

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Posted by YoHo1975 on Friday, October 28, 2011 12:40 PM

That's a good point, CAT could have bought the same AC components already. Even from the pre-Toshiba supplier. 

 

The acceptance of 3516 powered locos is tepid at best. 

Correct me if I'm wrong, but EMD has sold more ECO engines already than total 3516 powered locos out there Demos and all and that includes some relatively old efforts like the UP GP50 repowers. 

Current SD70 orders I would assume blow Progress out of the water. 

 

Does CAT have a strong "designed in house" bias?

 

I work in the computer industry and Intel has that reputation of buying other CPU manufacturers and then eventually shutting them down in favor of internal designs. Is cat the same way?

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Posted by edbenton on Friday, October 28, 2011 2:45 PM

Cat has a VERY and I mean VERY Storng Bias towards IN HOUSE designs.  For Years the ONLY way you could get Replacement parts was Thru Cats that would work.  You have an Injection pump that Blew up See CAT a Piston Blew See CAT.  I applied to work for them as a tester in 2003 when I separated from my Ex-wife at their Mossville facilaty.  The Non Disclosure and Non Complete clauses I would have to sign just as a Tester were eacgh 30 PAGES THICK.  If I left CAT employment on my own I had to wait 2 years before disclosing or working for any of their Competion. 

 

Yes CAT wouuld do something like this in a HEARTBEAT to get there foot in the Locomotive market.  How are they going to get the RR's to Accept that there is no longer the 710 series in production simple do you think the RR's want GE to be the ONLY new Manufactuor for Locomotives in the Nation.  See CAT is going to have the RR's by the BALLS either accept what we did or your going to be forced to buy GE and then GE can raise their Prices thru the roof. 

 

How will they get the RR's to accept the 3512 before they cut off the 710 simple called start teh 3512 line and sell them CHEAPER than the 710 line cost will play a huge cost in this.  Sell them for 1% over cost and bang your going to get Orders for a Locomotive powered by the 3512. Also ask a class one what they want in a Locomotive and DESIGN one around the 3512. 

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Posted by YoHo1975 on Friday, October 28, 2011 3:22 PM

How much autonomy do both Progress and EMD have? Why do they still exist as separate companies?

 

Doesn't the PR30C and PR43 represent exactly that? Asking what the railroads want and then making it with a 3500 series Prime mover?  If you get rid of the 710, then what does owning EMD even give you at all? EM2000? the radial truck design?

You can't tell me they couldn't have gotten their own bogie design out there if it were worth it to them.

 

Here's the other side of this. 710 is Tier 3 certed and they're working on Tier 4, so I think we can assume the SD70 is going to be around at least through Tier 3. That's 3 more years. Possibly Tier 4 which would likely ride out the decade. At that point. We may not be even talking about the 3500/3600 series of CAT engines anyway. Even if they do dump the 2 cycle engines. There's nothing to say they don't purpose build a new engine to the product. 

Remember also the teething problems of the 265H. The railroads simply didn't buy the product. EMD had to offer the 710. Similar happened to the Super series. GP/SD50s did not sell in volume. 

 

Again, I think the notion of in house bias is strong here, and may color EMD's future, but at the same time. I don't see 710 dying a premature death at this point.

What the next gen will look like though...

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Posted by samfp1943 on Friday, October 28, 2011 5:03 PM

These links might be of interest here: Referencing the EMD 710 Diesel Engine.

http://www.emdiesels.com/emdweb/products/powerproducts/pp_index.html

From this link are additional links to : A Brochure on the 710 ( last sheet lists stats),         (opens as a PDF file.)

                                                            A Video Clip is also linked.

http://www.emdiesels.com/emdweb/international/india_index.jsp

This link features a photo of their 4000hp GT46MAC (India and export with 710 engine)

and linked here is a sheet w/photo showing their H Engine:16v265 @6300Bhp @1000rpm.

http://www.emdiesels.com/emdweb/products/hengine.jsp#

 

 


 

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Posted by YoHo1975 on Friday, October 28, 2011 6:12 PM

Just as a follow up, someone made a comment about Progress buying a locomotive plant without orders? 

Well, the Muncie plant just rolled out their first unit.

http://trn.trains.com/en/Railroad%20News/News%20Wire/2011/10/EMD%20rolls%20out%20its%20first%20U,-d-,S,-d-,-made%20diesel%20in%20almost%2020%20years.aspx

 

Don't know why the export units are being built in the US while the US orders appear to still be in Canada.

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Posted by beaulieu on Friday, October 28, 2011 7:18 PM

YoHo1975

 

Don't know why the export units are being built in the US while the US orders appear to still be in Canada.

Muncie isn't up to speed yet, so production is going to be slow for a while yet. NS wants all 40 of their SD70ACe locomotives as soon as possible, so London will build them.

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Posted by carnej1 on Sunday, October 30, 2011 1:36 PM

Duplicate Post 

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Posted by beaulieu on Sunday, October 30, 2011 3:22 PM

YoHo1975

How much autonomy do both Progress and EMD have? Why do they still exist as separate companies?


 

My take and I don't mean it pejoratively.

EMD all Union Shop

Progress Rail all non-Union.

By making Muncie a Progress Rail shop it doesn't have to be a Closed Shop. I believe that if it was EMD by contract it would be closed.

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Posted by YoHo1975 on Sunday, October 30, 2011 7:43 PM

So EMD is in essence contracting the manufacture out to it's parent.

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Posted by edbenton on Monday, October 31, 2011 6:33 AM

Better pray the NLRB does'nt find out about this or there is going to be HELL to pay.  Cosidering what the NLRB is trying to do to Boeing for trying to Open a NEW factory in SC while leaving the other Factory OPEn across the Nation.  They did not cut any jobs and Still the NLRB is trying to get Boeing to close that 1 Billion dollar plant in SC why because they had the balls to tell the Union NO.  Also because 4 years ago Boeing told the IAM that either give athe company a No Strike clause for the 787 or we will build a line someplace us so if you strike we can keep on building them eliminating the threat of being able to shut down production. 

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Posted by YoHo1975 on Monday, October 31, 2011 1:19 PM

Oh, I don't think that's something I'd worry about.

 

Or rather, I think fighting Caterpillar on moving plants to non-union is old hat.

In fact, why even bring up Boeing? that's pathetic small change. Caterpillar has been executing the Southern Strategy since before Boeing even moved headquarters to Chicago. I remember growing up in Chicago driving through central Illinois, my dad maneuvering around Striking CAT workers. 

I'm not saying a fight won't happen. I am saying that this is Caterpillar we're talking about and:

"What is understood doesn't need to be discussed."

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Posted by daveklepper on Monday, October 31, 2011 2:30 PM

And there ARE other USA diesel locomotive builders other than EMD-CAT-Progress and GE.   Small, yes, but they can grow.

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Posted by CSSHEGEWISCH on Tuesday, November 1, 2011 7:20 AM

daveklepper

And there ARE other USA diesel locomotive builders other than EMD-CAT-Progress and GE.   Small, yes, but they can grow.

Not very likely since none of them have the financial muscle and resources similar to Caterpillar and General Electric.  Most of the smaller builders seem reasonably content in their niches.

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