Newport News firm rides boom in demand for big dump trucks

By Gregory Richards

The Virginian-Pilot

NEWPORT NEWS

Inside a white building the size of more than four football fields, the ultimate Tonka trucks are made.

The behemoths made by Liebherr Mining Equipment Co., however, don't dominate sandboxes. Rather, they haul coal, iron, oil sands, and copper and gold ore in some of the world's biggest mines.

The company makes the world's largest-capacity mining dump truck, with a 3,650-horsepower engine that guzzles 50 gallons of diesel fuel per hour; 13-foot tires, and a body that can carry 400 tons, the equivalent of nearly six Army tanks.

"It's kind of like driving a two-story house," spokeswoman Merilee Hunt said of Liebherr's T282B.

Liebherr and other mining truck manufacturers are riding a boom for such trucks, with orders at the highest levels in about 25 years, said Frank Manfredi, publisher of the Machinery Outlook equipment newsletter. Prices for such commodities as copper, gold and iron ore have risen in recent years on increased demand, so mine operators are flush with capital to expand operations and buy new equipment, he said.

So truck producers, like Liebherr, are adding employees and increasing production.

The company added a third shift about a year ago at its Newport News operation, said K. Joachim Janka, president of Liebherr Mining Equipment. The 362-employee plant is a unit of Swiss-based Liebherr-International AG, a global conglomerate with a product line that also includes home refrigerators, aircraft parts and tower cranes.

The factory off Interstate 664 produces about 40 monster trucks per year. Production has increased about 10 to 15 percent in each of the last five years, Janka said.

"We hope we just keep growing like that," he said.

Aside from its 400-ton-capacity top seller, Liebherr makes a unit that can carry 240 tons. It is also developing a 320 -ton model. The list prices for the trucks range from $2.5 million to $4.3 million, said Dion Domaschenz, Liebherr Mining's product marketing manager.

These dump trucks are very different from those seen on highways, and not just because of their size. Electric motors turn the tires, not diesel engines. The trucks’ diesel engines power electrical generators which transmit electricity to the rear-wheel motors. That design was developed decades ago when it was easier to transmit the truck's horsepower electrically than mechanically, Manfredi said. At least one manufacturer, Caterpillar Inc., has developed mechanical-drive mining trucks.

Diesel-electric trucks are more efficient than mechanical-drive trucks, Janka said. The hybrids are lighter and more fuel-efficient. Because of the electric motors, the trucks have fewer moving parts and can get up to speed faster.

Each truck takes 12 to 16 weeks to make, Domaschenz said during a plant tour last month.

Workers spend weeks just welding the frames, attaching the superstructure to hold the cab and various braces. The frames are mounted so they can be rotated, ensuring that they can be positioned for the best possible welds.

Once the frame is pieced together, the welds are cleaned and inspected. The trucks then are painted – white is the standard color. The cabs, engines, motors, tires and other equipment are attached. The finished truck is tested.

Each truck is crafted by hand, without any of the robotic welding seen on auto assembly lines. Liebherr's low volume doesn't support such an investment, Domaschenz said.

When the trucks leave Newport News, they aren't yet ready to haul. Their heavy, steel dump bodies are missing. Suppliers elsewhere make those, shipping them directly to wherever in the world the trucks are going, which saves shipping costs, Hunt said.

About 30 percent of the trucks stay in the United States, Janka said. The rest head to mines in such places as Chile, Canada, Australia and South Africa.

The exported trucks are rarely shipped through the nearby port of Hampton Roads. They mostly are taken to the ports of Baltimore and Houston because those ports and the shipping lines serving them specialize in heavy-duty wheeled freight, Janka said. The trucks are partially disassembled and hauled to the ports on tractor-trailers, he said.

Liebherr holds 35 to 40 percent of the market for 400-ton mining trucks, Janka said. Caterpillar, its main rival, holds the remainder.

Sales for the 400-ton trucks were split about evenly between Liebherr and Caterpillar in 2005, but they started to tilt toward Caterpillar last year, Janka said. The market for mining trucks is highly competitive. Mines bid for haulers, so losing just a few bids can tilt market share either way, he said.

Liebherr opened the Newport News plant in 1970 to make hydraulic excavators, and later, cranes. Production of both was returned to Europe in the 1980s. In 1995, Liebherr entered the mining truck business with the purchase of Wiseda Ltd., a Kansas-based builder. Manufacturing was shifted to Newport News in 1998.

In 2005, the company settled a federal racial discrimination suit filed by 26 black employees. The employees alleged they were subjected to hostile comments from white co-workers and managers, and that they were paid less than less-qualified white workers. The company reportedly paid $4 million, one of Virginia's largest-known racial-discrimination settlements.

Worldwide revenue for Liebherr's construction and mining equipment division, which includes the Newport News plant, was $2 billion in 2005, Janka said. He said he could not break out the plant's revenue.

The plant's near future should be secure. The boom for mining trucks, Janka said, is expected to last at least another four to five years.

Gregory Richards, (757) 446-2599, [email protected]

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