Kawasaki Heavy Industries, Hitachi Construction Machinery Ltd. And TCM Corp. last week reached an agreement to form an alliance focusing on their wheel loader businesses. The new corporation will consist of Kawasaki’s wheel loader operation, of which Hitachi will obtain a 34-percent stake through newly issued shares.

The main purpose of the alliance is to join forces in the development and production of wheel loaders throughout the world, the companies said. By joining the technological strengths and realigning the production capabilities of these three companies, the companies expect the resulting wheel loader line will be able to compete more effectively in a crowded global heavy equipment marketplace.

The alliance will allow the new company to pool technological and financial strengths to focus on a Tier IV emissions-compliant wheel loader product line. Kawasaki Construction Machinery Corp. of America will continue its operations in Kennesaw, Ga., and Newnan, Ga. The wheel loader line will continue to be marketed under the Kawasaki name in North and South America through the current Kawasaki distributor network. The operation will become an independent subsidiary in April 2009. TCM, a manufacturer of total logistics systems with core technologies in both software and hardware, is already a majority-owned subsidiary of Hitachi, which owns a 50.1 percent current share.

Kawasaki’s current wheel loader line features 12 machines ranging in size from the 50Z, with an operating weight of 7.9 tonnes to the 135Z, with an operating weight of 79.9 tonnes.
Tier 4 emission-control regulations are scheduled to take effect in 2011.

The three companies will continue discussions on establishing a broad alliance encompassing areas such as joint material procurement, dividing manufacturing operations and responsibilities for products and supply one another through reciprocal arrangements.

“This is exciting because it will join the R&D capabilities of Kawasaki and Hitachi in the development of the Tier IV product,” said Gary Bell, vice president and general manager of Kawasaki Construction Machinery. “Hitachi is a well-established and respected wheel loader manufacturer in Japan. We now have the resources of both companies available to improve our product and remain a competitive factor in the worldwide market.”