Tag Archive for 'trucks'

NAVISTAR ANNOUNCES WIDE-RANGING STRATEGIC ALLIANCE WITH VOLKSWAGEN TRUCK & BUS

  • image003Navistar and Volkswagen Truck & Bus to pursue strategic technology collaboration and establish procurement joint venture with Volkswagen Truck & Bus taking a 16.6% stake in Navistar
  • Volkswagen Truck & Bus to invest $256 million in Navistar at $15.76 per share and have the right to appoint two directors to Navistar’s board of directors
  • Alliance will uniquely position Navistar to provide best-in-class products and services to customers
  • Navistar expects to realize cumulative synergies of $500 million over first five years

 Navistar International Corporation (NYSE: NAV) today announced that it has formed a wide-ranging strategic alliance with Volkswagen Truck & Bus, which includes an equity investment in Navistar by Volkswagen Truck & Bus and framework agreements for strategic technology and supply collaboration and a procurement joint venture.

The agreements expected to be entered into in connection with the alliance will enable Navistar to offer customers expanded access to leading-edge products and services through collaboration on technology and the licensing and supply of Volkswagen Truck & Bus’s products and components, while better optimizing its product development spend. The alliance will also strengthen Navistar’s liquidity position. In addition, the procurement joint venture is expected to leverage the purchasing power of Volkswagen Truck & Bus’s three major truck brands, Scania, MAN and Volkswagen Caminhões e Ônibus, in addition to Navistar’s own International® and IC Bus brands, providing Navistar with enhanced global scale.

Navistar expects significant synergies from both the strategic technology collaboration and the procurement joint venture. The company expects the alliance to be accretive beginning in the first year, and for cumulative synergies for Navistar to ramp up to at least $500 million over the first five years. By year five, it expects the alliance will generate annual synergies of at least $200 million for Navistar. This annual run rate is expected to grow materially thereafter as the companies continue to introduce technologies from the collaboration.

“We are very pleased to partner with a global leader who shares our view of the world, in an alliance that will deliver multiple benefits and is consistent with our open-integration strategy,” said Troy Clarke, President and CEO, Navistar. “Starting in the near term, this alliance will benefit our purchasing operations through global scope and scale. Over the longer term, it is intended to expand the technology options we are able to offer our customers by leveraging the best of both companies and enabling Navistar to deliver enhanced uptime. Volkswagen Truck & Bus’s equity investment will strengthen our liquidity position and expand our financial flexibility, while aligning us with a valuable strategic partner.”

“Closer collaboration among our existing brands was a top priority for our commercial vehicles business and we are well on track in this context,” said Andreas Renschler, CEO of Volkswagen Truck & Bus and member of the Board of Management of Volkswagen AG responsible for commercial vehicles. “We are now taking the next step on our way to becoming a Global Champion in the commercial vehicles industry. The strategic alliance with Navistar is an important milestone and will be very beneficial for both sides.”

Navistar will remain a leading, independent truck, bus and engine company, focused on providing best-in-class products and related services to its customers globally and delivering value for its shareholders.

“We expect this alliance will create significant global scale, yielding considerable cost savings for both companies,” said Walter Borst, Executive Vice President and Chief Financial Officer, Navistar. “We believe working collaboratively, the two companies can optimize the capital and engineering expenditures associated with next-generation truck and bus engine development, while providing both Navistar and Volkswagen Truck & Bus with opportunities for substantial procurement savings. This alliance marks another step in Navistar’s journey to be a stronger, more profitable company.”

Equity Investment

As part of the alliance, Volkswagen Truck & Bus will acquire 16.2 million newly issued shares in Navistar, representing 16.6% of post-transaction undiluted common stock (or 19.9% of pre-transaction outstanding common stock). It will pay $15.76 per share or a 25% premium over Navistar’s 90-day volume weighted average price as of August 31, 2016, or 12% over Navistar’s closing price on September 2, 2016. Navistar will receive $256 million from the equity investment to be used for general corporate purposes.

To underscore the long-term nature of the alliance, Volkswagen Truck & Bus has agreed to hold these shares for a minimum of three years. Reflective of its shareholding post-transaction, Volkswagen Truck & Bus will have the right to appoint two directors to Navistar’s board of directors.

Procurement Joint Venture

The procurement joint venture will help source parts for both companies, providing Navistar and Volkswagen Truck & Bus with greater scale and competitiveness. It will also provide additional opportunities for Navistar suppliers to gain access to potential global sourcing opportunities, and create improved pricing for end-customers.

Technology Sharing

The strategic technology and supply partnership builds on Navistar’s open integration strategy of partnering with the best global companies in the industry to integrate cutting-edge technology. It is expected the partnership will focus on powertrain technology solutions, as well as explore collaboration in all aspects of commercial vehicle development, including advanced driver assistance systems, connected vehicle solutions, platooning and autonomous technologies, electric vehicles, and cab and chassis components. This enhanced collaboration will enable the alliance to share the overall costs associated with future vehicle development.

Navistar products will benefit from Volkswagen Truck & Bus components and technology through licensing and supply agreements entered into pursuant to the framework agreement for strategic technology and supply collaboration, which longer term will generate increased parts sales.

Governance

The strategic alliance will receive oversight from an alliance board, comprising top-level executives from both parties, which will align the product development and procurement processes between the companies.

Timing and Conditions to Close

The closing of the share purchase agreement implementing the strategic alliance is subject to certain regulatory approvals, the finalization of the agreements governing the procurement joint venture and the first contract under the technology and supply framework agreement and other customary closing conditions.

J.P. Morgan is acting as financial advisor to Navistar and Sullivan & Cromwell LLC is acting as legal advisor to Navistar.

 

 

Voters Feel Nation’s Infrastructure Needs Attention

Baby & GBy:  Greg Sitek

Days are flying by at a record-breaking pace as the presidential candidates race to the finish line in what, in my opinion, is the most vicious campaign since I was first eligible to vote. No, it wasn’t Lincoln vs. Douglas.

There are almost as many issues as there are dollars in our national debt. Among them is our infrastructure. A failing infrastructure is not conducive to growing a strong economy. Both parties recognize this face and have addressed it in campaign rhetoric.

With 90 days left before Election Day, a national poll released recently by the Association of Equipment Manufacturers (AEM) found that half of registered voters say the nation’s infrastructure has gotten worse over the last five years, and a majority of voters said roads and bridges are in “extreme” need of repair.

The findings were part of a new national poll commissioned by AEM to gauge voter perceptions and attitudes about the current and future state of U.S. infrastructure amid a high-profile election. The poll found that registered voters, regardless of political affiliation, recognize the declining state of the nation’s infrastructure as an issue that should be addressed and believe that the federal government should do more to improve infrastructure across the board.

“Americans across the political spectrum understand the dire state of U.S. infrastructure and believe that the federal government should do more to improve our infrastructure,” said Dennis Slater, president of AEM. “Voters recognized that increased federal funding for assets such as roads, bridges, and inland waterways will have a positive impact on the economy, and they are looking to the federal government to repair and modernize.”

The national poll identified a number of key findings, including:

• Nearly half (46 percent) of registered voters believe that the state of the nation’s infrastructure has gotten worse in the last five years.

• A significant majority (80 – 90 percent) of registered voters say that roads, bridges and energy grids are in some or extreme need of repairs.

• Half (49 percent) of the surveyed population feel that the federal government is primarily responsible for funding repairs to the nation’s infrastructure.

• Seven out of every 10 registered voters say increasing federal funding for infrastructure will have a positive impact on the economy.

• More than eight out of every ten Americans consider water infrastructure (86 percent), solar powered homes (83 percent) and smart infrastructure (82 percent) as the top three important innovations for the future of infrastructure.

• Voters across the political spectrum think that the federal government should do more to improve the nation’s overall infrastructure, with 68 percent of Republicans, 70 percent of Independents and 76 percent of Democrats sharing this sentiment.

Registered voters also feel that government across the board should be doing more to improve the nation’s overall infrastructure, with 76 percent of individuals surveyed wanting more from state governments, 72 percent looking to the federal government to do more and 70 percent expecting more from local governments.

“Both presidential nominees have voiced their strong support for infrastructure investment,” says Ron DeFeo, CEO of Kennametal and chairman of AEM’s Infrastructure Vision 2050 initiative. “The specific ideas and proposals they offer over the next 90 days will be critically important, and voters should consider them carefully on Election Day.”

Currently, there are 4.12 million miles of road in the United States, according to the Federal Highway Administration, including Alaska and Hawaii. The core of the nation’s highway system is the 47,575 miles of Interstate Highways, which comprise just over 1 percent of highway mileage but carry one-quarter of all highway traffic. The Interstates plus another 179,650 miles of major roads comprise the National Highway System, which carries most of the highway freight and traffic in the U.S. Most of the roads in the U.S., 2.94 million miles, are located in rural areas, with the remaining 1.18 million miles located in urban areas. Local governments are responsible for maintaining and improving 3.18 million miles of road or 77.3 percent of the total. State highway agencies are responsible for over 780 thousand miles of road, or 19.0 percent. The federal government is responsible for only 150 thousand miles of road or 3.7 percent, largely roads in national parks, military bases and Indian reservations. Of the 4.07 million miles of road, about 2.68 million miles are paved, which includes most roads in urban areas. However, 1.39 million miles or more than one-third of all road miles in the U.S. are still unpaved gravel or dirt roads. These are largely local roads or minor collectors in rural areas of the country. (Source: Highway Statistics 2013 Table HM-20, HM-10, HM-12, HM-15, VM-202)

You don’t like the way things are going?

Do something about it!

Vote!

Just because you vote don’t think your job is done. Keep track of your representatives in local, state and federal government.

Remember they work for you. You pay their salaries and benefits, and they are well paid. Make them accountable and communicate with them regularly. It is your country.

Additional information is available at: The Atlantic – Donald Trump’s Big-Spending Infrastructure Dream

FORTUNE – Both Republicans and Democrats Want More Infrastructure Spending Now

The Hill – Poll: Dems, GOP agree infrastructure worsening

AEM – www.aem.org

Site-K Construction Zone http://www.site-kconstructionzone.com/?p=12782

U.S. Interstate Highway System Turns 60 Years Old Amid Increased Travel, Rising Congestion; Surging Travel And Insufficient Funding To Make Needed Improvements. Interstate System Continues To Save Lives, Time And Money While Easing Personal And Commercial Mobility

Trip LogoAs the U.S. Interstate Highway System turns 60 years old this week, it faces increasing congestion, unprecedented levels of travel – particularly by large trucks – and insufficient funding to make needed repairs and improvements. The nation’s most critical transportation link continues to save lives with its enhanced safety features and is largely well-preserved, but an aging Interstate system will increasingly require more long-term, costly repairs, according to a new report released today by TRIP, a Washington, DC based national transportation organization.

The TRIP report, “The Interstate Highway System Turns 60: Challenges to Its Ability to Continue to Save Lives, Time and Money” finds that while the Interstate Highway System represents only 2.5 percent of lane miles in the U.S., it carries 25 percent of the nation’s vehicle travel. The system is increasingly congested, with truck travel growing at a rate twice that of overall Interstate travel. And, while the nation’s Interstates tend to be in better condition than other roads and bridges, the aging system lacks the required funding for needed improvements and repairs.

The chart below details the top 10 states whose Interstate systems have the highest levels of congestion, the largest share of large truck travel, the highest increase in travel from 2000-2014, the highest share of pavements in poor and mediocre condition, the highest rate of structurally deficient bridges, and the largest number of lives saved annually. Data for all 50 states can be found in the report’s Appendix.

TRIP 60 1

“Drivers are frustrated with the condition of the nation’s transportation system,” said Jill Ingrassia, AAA’s managing director of government relations and traffic safety advocacy. “While a record 36 million travelers plan to hit the road for Independence Day weekend, nearly 70 percent are concerned that roads and bridges are not in great driving condition. AAA urges lawmakers to keep their eye on the ball to identify a sustainable funding source to maintain and improve our Interstate system for the future.”

The current backlog of needed improvements to the Interstate Highway System, as estimated by the U.S. Department of Transportation, is $189 billion. The nation’s current transportation investment is less than two-thirds (61 percent) of the amount needed to keep Interstates in good condition and make the improvements necessary to meet the nation’s growing need for personal and commercial mobility. And, while the recently enacted federal surface transportation program, the Fixing America’s Surface Transportation (FAST Act) provides a modest increase in spending, it lacks a long-term, sustainable revenue source. By 2020 the shortfall into the nation’s Highway Trust Fund will be $16 billion annually.

“The United States moves in large part thanks to the efforts of many elected officials, organizations and citizens whose shared foresight led to the construction of the national interstate system,” said Bud Wright, executive director of the American Association of State Highway and Transportation Officials. “Now, as we commemorate the 60th anniversary of the Interstate act, it’s clear that our investments in preserving the system are not keeping up even as our nation continues to grow.”

Since 2000 travel on the Interstate system is increasing two times faster than new lane capacity is being added. As a result, 43 percent of urban Interstate highways are considered congested during peak hours and the average annual amount of travel per Interstate lane mile increased by 11 percent from 2000 to 2014. Travel by combination trucks on the Interstate increased by 29 percent from 2000 to 2014, more than double the 14 percent rate of growth for all Interstate vehicle travel during the same period.

“It’s hard to believe it’s been 60 years since the Interstate Highway System was developed,” said Ed Mortimer, executive director for transportation infrastructure at the United States Chamber of Commerce. “The vision of President Eisenhower has enabled economic mobility throughout our nation and showed we can accomplish big things. As we work to maintain, and in many cases rebuild this great system, let’s continue to think big as we work to fund and finance an improved, smarter network.”

Travel on the nation’s Interstate highways has surged since 2014. In 2015 vehicle miles of travel on the Interstate Highway System was four percent higher than in 2014 and through the first three months of 2016 travel on the Interstate Highway System was five percent higher than during the first three months of 2015.

The design of the Interstate – which includes a separation from other roads and rail lines, a minimum of four lanes, paved shoulders and median barriers – makes it more than twice as safe to travel on as all other roadways. The fatality rate per 100 million vehicle miles of travel on the Interstate in 2014 was 0.54, compared to 1.26 on non-Interstate routes. TRIP estimates that the Interstate Highway System saved 5,359 lives in 2014, based on an estimate of the number of additional fatalities that would have occurred had Interstate traffic been carried by other major roadways, which often lack the safety features common to Interstate routes.

While the condition of Interstate pavement and bridges is acceptable, some deficiencies exist. Twelve percent of Interstate highways are in poor or mediocre condition. Three percent of Interstate bridges are structurally deficient and an additional 18 percent are functionally obsolete. Structurally deficient bridges have significant deterioration of the major components of the bridge, while functionally obsolete bridges no longer meet modern design standards, often because of narrow lanes, inadequate clearances or poor alignment.

“The long-term vision that helped establish the current Interstate system 60 years ago is needed again today,” said Will Wilkins, TRIP’s executive director. “In order to maintain personal and commercial mobility, transportation investment and a sustainable, long-term funding source for the federal surface transportation program must remain a priority.”

The above highlighted links will take you to the full report, including the executive summary and appendix of supporting charts and graphs.

or you can scan: Trip ReportTRIP Report qrcode-9

Appendix:TRIP Appendix qrcode-10

Liebherr Announces The Formation Of Liebherr USA, Co. To Further Expand Its Brand Positioning In The U.S.

Liebherr leverages the organization’s capabilities and announces the formation of Liebherr USA, Co., a simpler structure with a broader reach. 

Liebherr began operation in 1949 with Hans Liebherr and the invention of the TK10, the first mobile tower crane.  The company that once employed 110 people and recorded net sales of $ 1.27 million USD in 1950 is now one of the world’s largest and most successful manufacturers of construction and earthmoving machinery employing more than 41,000 people in 50 countries with total sales of $10.3 billion USD in 2015.

Liebherr’s success and expansion in North America followed a similar pattern to its success in Europe and throughout the world.  Liebherr’s commitment to the United States market began in 1970 with the construction of its manufacturing facilities and North American headquarters in Newport News, VA. Over the years  new companies were formed  to fulfill customer needs in different industries.

“As we continue to grow our brand in the United States we are transitioning into a mixed-sales company” said Dr. Torben Reher, Managing Director of Liebherr USA, Co. “We are confident that this new platform will leverage the existing know-how and expertise among Liebherr divisions providing Liebherr business partners and customers with an exceptional and consistent experience in the United States,” Reher continued.

Liebherr USA, Co., the newly formed mixed-sales organization, will serve as the umbrella company and the existing Liebherr sales and service companies will become divisions of Liebherr USA, Co.  Excluded are Liebherr-Aerospace Saline, Inc., Liebherr Gear Technology, Inc., Liebherr Automation Systems, Co., and Liebherr Mining Equipment Newport News, Co.  However, sales and service for mining equipment in the U.S. will be incorporated into Liebherr USA, Co.

“Liebherr USA, Co. will allow us to approach our customers more efficiently and ultimately increase customer satisfaction in the US.”  said, Peter Mayr, Managing Director of Liebherr USA, Co. and Head of the Liebherr Construction Equipment Division.

Liebherr USA, Co. will be organized into eight different divisions as illustrated in the diagram below.

Liebherr USA organization_2 4In practical terms, all points of contact and business relationships will remain the same for our business partners and all contracts/programs/arrangements/agreements will remain in effect.

Daniel Pitzer, Managing Director of Liebherr USA, Co. and Head of the Mobile and Crawler Cranes Division, stated, “Liebherr in the United States is an amazing success story that was made possible by our loyal American customers. The formation of Liebherr USA, Co. will elevate our organization to a higher level.” Pitzer ended by saying, “I’m extremely proud and excited for our customers and for Liebherr to ‘Be Part of something BIGGER’ going forward!” making reference to Liebherr’s new company and emphasizing the strong statement Liebherr made earlier this year during Bauma.

The new organization will become effective on June 1, 2016. Liebherr USA, Co. will be led by a team consisting of three managing directors who will be responsible for providing strategic direction.

Effective June 1, 2016 the following companies will be incorporated into Liebherr USA, Co: Liebherr-America, Inc.,(including Tower Cranes, Refrigerators and Freezers),  Liebherr Components North America, Co., Liebherr Concrete Technology, Co. Liebherr Construction Equipment, Co., Liebherr Equipment Source, Liebherr Cranes, Inc., Liebherr Mining Equipment Newport News, Co. (Sales & Service in the U.S. only) and  Liebherr Nenzing Crane, Co. Excluded are Liebherr-Aerospace Saline, Inc., Liebherr Gear Technology, Inc., Liebherr Automation Systems, Co., and Liebherr Mining Equipment Newport News Co.

About Liebherr 

Liebherr qrcode

TRIP Report: Deficient, Congested Roadways Cost Wisconsin Drivers $2,072 Annually, $6 Billion Statewide

Deficient, Congested Roadways Cost Wisconsin Drivers As Much As $2,072 Annually, A Total Of $6 Billion Statewide. Costs Will Rise And Transportation Woes Will Worsen Without Increased Funding

 Roads and bridges that are deficient, congested or lack desirable safety features cost Wisconsin motorists a total of $6 billion statewide annually – as much as $2,072 per driver in the state’s larger urban areas – due to higher vehicle operating costs, traffic crashes and congestion-related delays. Increased investment in transportation improvements at the local, state and federal levels could relieve traffic congestion, improve road, bridge and transit conditions, boost safety, and support long-term economic growth in Wisconsin, according to a new report released today by TRIP, a Washington, DC based national transportation organization.

The TRIP report, Wisconsin Transportation by the Numbers: Meeting the State’s Need for Safe, Smooth and Efficient Mobility,” finds that throughout Wisconsin, 42 percent of major locally and state-maintained roads are in mediocre to poor condition and another 39 percent are in fair condition. Fourteen percent of Wisconsin’s bridges are structurally deficient or functionally obsolete. The state’s major urban roads are becoming increasingly congested, with drivers wasting significant amounts of time and fuel each year. And 2,743 people were killed annually in crashes on Wisconsin’s roads from 2011 to 2015, with traffic fatalities increasing 13 percent in 2015 to 556 from 494 in 2014.

Driving on deficient roads costs each Milwaukee area driver $2,060 per year in the form of extra vehicle operating costs (VOC) as a result of driving on roads in need of repair, lost time and fuel due to congestion-related delays, and the costs of traffic crashes in which roadway features likely were a contributing factor. Drivers in the Madison urban lose an average of $2,072 annually as a result of driving on deficient roads. A breakdown of the costs per motorist in each area along with a statewide total is below.

WI 1The TRIP report finds that 56 percent of major roads in the Milwaukee urban area are in poor to mediocre condition, costing the average motorist an additional $861 each year in extra vehicle operating costs, including accelerated vehicle depreciation, additional repair costs, and increased fuel consumption and tire wear. Sixty-eight percent of major roads in Madison are in poor to mediocre condition, costing each driver $974 each year.

“An efficient transportation infrastructure with adequate capacity is the circulatory system of a healthy economy,” said Steve Baas, senior vice president for governmental affairs and public policy at the Metropolitan Milwaukee Association of Commerce (MMAC).   “Road congestion throughout our region clogs the arteries of commerce and threatens the life and health of our business climate.”

Traffic congestion in the Milwaukee area is worsening, causing 38 hours of delay a year for the average motorist and costing each driver $987 annually in lost time and wasted fuel. The average Madison driver loses 36 hours annually as a result of congestion, while the annual cost of lost time and wasted fuel for each Madison driver is $911.

A total of 14 percent of Wisconsin’s bridges show significant deterioration or do not meet modern design standards. Nine percent of Wisconsin’s bridges are structurally deficient, with significant deterioration to the bridge deck, supports or other major components. An additional five percent of the state’s bridges are functionally obsolete, which means they no longer meet modern design standards, often because of narrow lanes, inadequate clearances or poor alignment. In the Milwaukee urban area, six percent of bridges are structurally deficient and 24 percent are functionally obsolete. Nine percent of Madison area bridges are structurally deficient, while nine percent are functionally obsolete.

Wisconsin’s overall traffic fatality rate of 0.84 fatalities per 100 million vehicle miles of travel is lower than the national average of 1.08. The state’s rural roads have a traffic fatality rate that is more than double than the rate on all other roads in the state (1.24 fatalities per 100 million vehicle miles of travel versus 0.54). TRIP estimates that roadway features may be a contributing factor in approximately one-third of fatal traffic crashes.

The efficiency and condition of Wisconsin’s transportation system, particularly its highways, is critical to the health of the state’s economy. Annually, $264 billion in goods are shipped from sites in Wisconsin and another $236 billion in goods are shipped to sites in Wisconsin, mostly by truck.

“These conditions are only going to get worse if greater funding is not made available at the local, state and federal levels,” said Will Wilkins, TRIP’s executive director. “Without additional transportation funding Wisconsin transportation system will become increasingly deteriorated and congested, the state will miss WI_TRIP_Infographics_May_2016out on opportunities for economic growth and quality of life will suffer.”

WISCONSIN TRANSPORTATION

BY THE NUMBERS:

Meeting the State’s Need for Safe, Smooth and

Efficient Mobility

Ten Key Transportation Numbers in Wisconsin

 

$6 billion

Driving on deficient roads costs Wisconsin motorists a total of $6 billion annually in the form of additional vehicle operating costs (VOC), congestion-related delays and traffic crashes.
 

Madison: $2,072 Milwaukee: $2,060

 

TRIP has calculated the cost to the average motorist in Wisconsin’s largest urban areas in the form of additional VOC, congestion-related delays and traffic crashes. The average Madison area driver loses $2,072 annually, while each Milwaukee area driver loses $2,060.
2,743

13 %

62

A total of 2,743 people were killed in Wisconsin traffic crashes from 2011 to 2015. The number of traffic fatalities increased by approximately 13 percent between 2014 and 2015, increasing by 62 deaths from 494 to 556.
2 X The fatality rate on Wisconsin’s non-interstate rural roads is more than double that on all other roads in the state (1.24 fatalities per 100 million vehicle miles of travel vs. 0.54).
42% Statewide

68% Madison

56% Milwaukee

Statewide, 42 percent of Wisconsin’s major roads are in mediocre to poor condition. Sixty-eight percent of major roads in the Madison urban area are in mediocre to poor condition, while in the Milwaukee urban area 56 percent of major roads are in mediocre to poor condition.
$264 B

$236 B

Annually, $264 billion in goods are shipped from sites in Wisconsin and another $236 billion in goods are shipped to sites in Wisconsin, mostly by truck.
 

14%

A total of 14 percent of Wisconsin bridges show significant deterioration or do not meet current design standards. Nine percent of the state’s bridges are structurally deficient and five percent are functionally obsolete.
36 hours

38 hours

 

The average driver in the Madison area loses 36 hours to congestion annually, while each driver in the Milwaukee urban area loses 38 hours annually.
 

$274

33

A recent analysis by WisDOT found that the average Wisconsin motorists pays $274 annually in state and local registration-related fees and gas taxes, a level ranked 33rd nationally among states.
 

 

1,393,428

$54.8 B

$10 B

1,393,428 full-time jobs in Wisconsin in key industries like tourism, retail sales, agriculture and manufacturing are completely dependent on the state’s transportation infrastructure network. These workers earn $54.8 billion in wages and contribute an estimated $10 billion in state and local income, corporate and unemployment insurance taxes and the federal payroll tax.

 

 

Eight years after the nation suffered a significant economic downturn, Wisconsin’s economy continues to rebound. The rate of economic growth in Wisconsin, which will be greatly impacted by the reliability and condition of the state’s transportation system, continues to have a significant impact on quality of life in the Badger State.

An efficient, safe and well-maintained transportation system provides economic and social benefits by affording individuals access to employment, housing, healthcare, education, goods and services, recreation, entertainment, family, and social activities. It also provides businesses with access to suppliers, markets and employees, all critical to a business’ level of productivity and ability to expand. Reduced accessibility and mobility – as a result of traffic congestion, a lack of adequate capacity, or deteriorated roads, highways, bridges and transit facilities – diminishes a region’s quality of life by reducing economic productivity and limiting opportunities for economic, health or social transactions and activities.

With an economy based largely on agriculture, food, paper and beverage production, manufacturing, health care, education and tourism, the quality of Wisconsin’s transportation system plays a vital role in the state’s economic growth and quality of life.

In this report, TRIP looks at the top transportation numbers in Wisconsin as the state addresses its need to modernize and maintain its system of roads, highways, bridges and transit.

In December 2015 the president signed into law a long-term federal surface transportation program that includes modest funding increases and allows state and local governments to plan and finance projects with greater certainty through 2020. The Fixing America’s Surface Transportation Act (FAST Act) provides approximately $305 billion for surface transportation with highway and transit funding slated to increase by approximately 15 and 18 percent, respectively, over the five-year duration of the program. While the modest funding increase and certainty provided by the FAST Act are a step in the right direction, the funding falls far short of the level needed to improve conditions and meet the nation’s mobility needs and fails to deliver a

COST TO WISCONSIN MOTORISTS OF DEFICIENT ROADS

An inadequate transportation system costs Wisconsin motorists a total of $6 billion every year in the form of additional vehicle operating costs (VOC), congestion-related delays and traffic crashes.

  • TRIP estimates that Wisconsin roadways that lack some desirable safety features, have inadequate capacity to meet travel demands or have deteriorated pavement conditions cost the state’s residents approximately $6 billion annually in the form of additional vehicle operating costs (including accelerated vehicle depreciation, additional repair costs, and increased fuel consumption and tire wear), the cost of lost time and wasted fuel due to traffic congestion, and the financial cost of traffic crashes.
  • TRIP has calculated the average cost to drivers in the state’s largest urban areas as a result of driving on roads that are deteriorated, congested or lack some desirable safety features. The chart below details the costs to drivers statewide and in the Madison and Milwaukee urban areas.

WI 2POPULATION AND ECONOMIC GROWTH IN WISCONSIN

The rate of population and economic growth in Wisconsin have resulted in increased demands on the state’s major roads and highways, leading to increased wear and tear on the transportation system.

  • Wisconsin’s population reached approximately 5.8 million residents in 2015, an eight percent increase since 2000.
  • Wisconsin had 4.2 million licensed drivers in 2014.
  • Vehicle miles traveled (VMT) in Wisconsin increased by five percent from 2000 to 2014 –from 57.3 billion VMT in 2000 to 60.1 billion VMT in 2014.
  • Vehicle miles of travel in Wisconsin in 2015 were 4.2 percent higher than in 2014. U.S. vehicle miles of travel in 2015 were 3.5 percent higher than in 2014.
  • By 2030, vehicle travel in Wisconsin is projected to increase by another 25 percent.
  • From 2000 to 2014, Wisconsin’s gross domestic product, a measure of the state’s economic output, increased by 18 percent, when adjusted for inflation. U.S. GDP increased 24 percent during this time.

WISCONSIN ROAD CONDITIONS

A lack of adequate state and local funding has resulted in more than two-fifths of major locally and state-maintained roads and highways in Wisconsin having pavement surfaces in mediocre to poor condition, providing a rough ride and costing motorists in the form of additional vehicle operating costs.

  • The pavement data in this report, which is for all arterial and collector roads and highways, is provided by the Federal Highway Administration, based on data submitted annually by the Wisconsin Department of Transportation (WisDOT) on the condition of major state and locally maintained roads and highways in the state.
  • Pavement data for Interstate highways and other principal arterials is collected for all system mileage, whereas pavement data for minor arterial and all collector roads and highways is based on sampling portions of roadways as prescribed by FHWA to insure that the data collected is adequate to provide an accurate assessment of pavement conditions on these roads and highways.
  • Statewide, 42 percent of Wisconsin’s major locally and state-maintained roads and highways are in mediocre to poor condition, while 39 percent are in fair condition and 19 percent are in good to excellent condition.
  • Roads rated in mediocre to poor condition may show signs of deterioration, including rutting, cracks and potholes. In some cases, these roads can be resurfaced, but often are too deteriorated and must be reconstructed.
  • The chart below details pavement conditions on major locally and state-maintained urban roads in the Madison and Milwaukee urban areas:
  • WI 3Driving on rough roads costs Wisconsin motorists a total of $3.2 billion annually in extra vehicle operating costs. The average driver in the Madison urban area loses $974 annually, while in the Milwaukee urban area the average driver loses $861 each year as a result of driving on deteriorated roads. Costs include accelerated vehicle depreciation, additional repair costs, and increased fuel consumption and tire wear.

WISCONSIN BRIDGE CONDITIONS

Fourteen percent of locally and state-maintained bridges in Wisconsin show significant deterioration or do not meet current design standards often because of narrow lanes, inadequate clearances or poor alignment. This includes all bridges that are 20 feet or more in length.

  • Nine percent of Wisconsin’s bridges are structurally deficient. A bridge is structurally deficient if there is significant deterioration of the bridge deck, supports or other major components. Structurally deficient bridges are often posted for lower weight or closed to traffic, restricting or redirecting large vehicles, including commercial trucks and emergency services vehicles.
  • Five percent of Wisconsin’s bridges are functionally obsolete. Bridges that are functionally obsolete no longer meet current highway design standards, often because of narrow lanes, inadequate clearances or poor alignment.
  • The chart below details bridge conditions statewide and in the Madison and Milwaukee urban areas:

WI 4HIGHWAY SAFETY AND FATALITY RATES IN WISCONSIN

Improving safety features on Wisconsin’s roads and highways would likely result in a decrease in the state’s traffic fatalities and serious crashes. It is estimated that roadway features are likely a contributing factor in approximately one-third of all fatal and serious traffic crashes.

  • A total of 2,743 people were killed in Wisconsin traffic crashes from 2011 to 2015.
  • The number of traffic fatalities in Wisconsin increased by approximately 13 percent between 2014 and 2015, increasing by 62 deaths from 494 to 556.
  • Wisconsin’s overall traffic fatality rate of 0.84 fatalities per 100 million vehicle miles of travel in 2014 was lower than the national average of 1.08.
  • The fatality rate on Wisconsin’s non-interstate rural roads in 2014 was more than double that on all other roads in the state (1.24 fatalities per 100 million vehicle miles of travel vs. 0.54).
  • The chart below details the average number of fatalities from 2012 to 2014 in the Madison and Milwaukee areas, and the average cost per driver as a result of traffic crashes.
  • WI 5Roadway features that impact safety include the number of lanes, lane widths, lighting, lane markings, rumble strips, shoulders, guard rails, other shielding devices, median barriers and intersection design. The cost of serious crashes includes lost productivity, lost earnings, medical costs and emergency services.
  • Several factors are associated with vehicle crashes that result in fatalities, including driver behavior, vehicle characteristics and roadway features. TRIP estimates that roadway features are likely a contributing factor in approximately one-third of fatal traffic crashes.
  • Where appropriate, highway improvements can reduce traffic fatalities and crashes while improving traffic flow to help relieve congestion. Such improvements include removing or shielding obstacles; adding or improving medians; improved lighting; adding rumble strips, wider lanes, wider and paved shoulders; upgrading roads from two lanes to four lanes; and better road markings and traffic signals.
  • Investments in rural traffic safety have been found to result in significant reductions in serious traffic crashes. A 2012 report by the Texas Transportation Institute (TTI) found that improvements completed recently by the Texas Department of Transportation that widened lanes, improved shoulders and made other safety improvements on 1,159 miles of rural state roadways resulted in 133 fewer fatalities on these roads in the first three years after the improvements were completed (as compared to the three years prior).   TTI estimates that the improvements on these roads are likely to save 880 lives over the next 20 years.

WISCONSIN TRAFFIC CONGESTION

Increasing levels of traffic congestion cause significant delays in Wisconsin, particularly in its larger urban areas, choking commuting and commerce. Traffic congestion robs commuters of time and money and imposes increased costs on businesses, shippers and manufacturers, which are often passed along to the consumer.

  • Based on Texas Transportation Institute (TTI) estimates, the value of lost time and wasted fuel in Wisconsin is approximately $1.7 billion per year.
  • According to TTI, the average driver in the Madison urban area loses $911 each year in the cost of lost time and wasted fuel as a result of traffic congestion. The average Madison commuter wastes 36 hours each year stuck in traffic.
  • According to TTI, the average driver in the Milwaukee urban area loses $987 each year in the cost of lost time and wasted fuel as a result of traffic congestion. The average Milwaukee commuter wastes 38 hours each year stuck in traffic.
  • Increasing levels of congestion add significant costs to consumers, transportation companies, manufacturers, distributors and wholesalers and can reduce the attractiveness of a location to a company when considering expansion or where to locate a new facility. Congestion costs can also increase overall operating costs for trucking and shipping companies, leading to revenue losses, lower pay for drivers and employees, and higher consumer costs.

TRANSPORTATION FUNDING IN WISCONSIN

Investment in Wisconsin’s roads, highways and bridges is funded by local, state and federal governments. The recently approved five-year federal surface transportation program includes modest funding increases and provides states with greater funding certainty, but falls far short of providing the level of funding needed to meet the nation’s highway and transit needs. The bill does not include a long-term and sustainable revenue source.

  • According to the 2015 AASHTO Transportation Bottom Line Report, a significant boost in investment in the nation’s roads, highways, bridges and public transit systems is needed to improve their condition and to meet the nation’s transportation needs.
  • AASHTO’s report found that based on an annual one percent increase in VMT annual investment in the nation’s roads, highways and bridges needs to increase 36 percent, from $88 billion to $120 billion, to improve conditions and meet the nation’s mobility needs, based on an annual one percent rate of vehicle travel growth. Investment in the nation’s public transit system needs to increase from $17 billion to $43 billion.
  • The Bottom Line Report found that if the national rate of vehicle travel increased by 1.4 percent per year, the needed annual investment in the nation’s roads, highways and bridges would need to increase by 64 percent to $144 billion. If vehicle travel grows by 1.6 percent annually the needed annual investment in the nation’s roads, highways and bridges would need to increase by 77 percent to $156 billion.

TRANSPORTATION AND ECONOMIC GROWTH IN WISCONSIN

The efficiency of Wisconsin’s transportation system, particularly its highways, is critical to the health of the state’s economy. Businesses rely on an efficient and dependable transportation system to move products and services. A key component in business efficiency and success is the level and ease of access to customers, markets, materials and workers.

  • 1,393,428 full-time jobs in Wisconsin in key industries like tourism, retail sales, agriculture and manufacturing are completely dependent on the state’s transportation infrastructure network. These workers earn $54.8 billion in wages and contribute an estimated $10 billion in state and local income, corporate and unemployment insurance taxes and the federal payroll tax.
  • Annually, $264 billion in goods are shipped from sites in Wisconsin and another $236 billion in goods are shipped to sites in Wisconsin, mostly by truck.
  • Eighty-two percent of the goods shipped annually from sites in Wisconsin are carried by trucks and another 14 percent are carried by courier services or multiple mode deliveries, which include trucking.
  • Increasingly, companies are looking at the quality of a region’s transportation system when deciding where to re-locate or expand. Regions with congested or poorly maintained roads may see businesses relocate to areas with a smoother, more efficient and more modern transportation system.
  • Highway accessibility was ranked the number two site selection factor behind only the availability of skilled labor in a 2015 survey of corporate executives by Area Development Magazine.
  • The Federal Highway Administration estimates that each dollar spent on road, highway and bridge improvements results in an average benefit of $5.20 in the form of reduced vehicle maintenance costs, reduced delays, reduced fuel consumption, improved safety, reduced road and bridge maintenance costs and reduced emissions as a result of improved traffic flow.

Sources of information for this report include the Wisconsin Department of Transportation (WisDOT), the Federal Highway Administration (FHWA), the American Association of State Highway and Transportation Officials (AASHTO), the Bureau of Transportation Statistics (BTS), the U.S. Census Bureau, the Texas Transportation Institute (TTI), the National Highway Traffic Safety Administration (NHTS