CAT rival will see engine sales climb

  medium-duty trucks Diesel-engine maker Cummins Inc. could see its business climb sharply as a result of an agreement Thursday by two truck manufacturers, observers have told Tootoo.com. Caterpillar Inc. and Navistar International Corp. plan to build and sell commercial heavy- and medium-duty trucks. Caterpillar will continue to sell off-highway engines for mining and power-generation equipment to other manufacturers. The deal is considered good for Columbus-based Cummins because Caterpillar will no longer sell diesel engines for Class 8 trucks once the deal is completed. Cummins has about 44 percent of that market and could pick up another 10 percent, some observers say. "It's a banner day for folks in Columbus," said Charlie Rentschler, an analyst at Wall Street Access in New York. "Cummins is now the sole Class 8 engine supplier." Shares in Cummins rose the most in four years, closing up 9.9 percent, to $69.38, up $6.25. Rentschler, a former Cummins executive, estimates that Cummins could pick up at least half of Caterpillar's $2 billion market share, which he says is around 20 percent of the market. The extra business won't happen right away, as Caterpillar will still be making U.S. engines in 2009, but Rentschler says an increase will be on the way in 2010. "I think Cummins will have the capacity to do that and be very pleased to do so," Rentschler said.