Truck Manufacturing Plants Continue To Produce Products at Record Pace
Jul 1, 1999 12:00 PM, MBT staff
TRUCK manufacturing plants are humming with production, and it doesn't look as if the pace is likely to slow anytime soon. "The growth is just phenomenal, both in our economy and our industry," said Marc Gustafson, president and chief executive officer for Volvo Trucks North America Inc.
Industry demand is expected to be about 250,000 heavy trucks in 1999, up from the previous year of 224,700, and 133,000 medium trucks in 1999, up from 124,000. Gustafson noted that the sale of Volvo's automobile division to Ford Motor Company, leaving Volvo to concentrate on truck manufacturing at its Virginia plant, indicates the company's confidence in truck production.
Gustafson isn't alone in his positive projections. Three other truck manufacturing representatives joined him in speaking to the National Tank Truck Carriers at the association's meeting May 16-18 in Atlanta, Georgia. Offering comments on the state of the industry were Dean Lindquist, Sterling Truck Corporation general manager for the southeast region, and Michael Penland, Navistar International Transportation Corp marketing manager, LTL heavy truck vehicle center.
Sterling, a subsidiary of Freightliner, manufactures Class 7 and 8 trucks at its facility in Canada where production has increased so that units are being moved in large numbers to customers in the United States, said Lindquist.
Penland seconded his colleagues' remarks. "The industry is just flat-out through the roof." Navistar's plant in Mexico turns out about 22 trucks per day. At the same time, he pointed out that the backlog is shrinking as the build rate climbs.
"The world outlook for truck sales is very strong," Penland added.
And that world is quickly becoming more and more technologically oriented. "What we see today is only the beginning of what technology will be for the future," said Gustafson. However, he warned against the introduction of radical changes in new products that will not blend with older vehicles in carriers' fleets.
Added to technological development is the overriding importance of delivering customer service, an essential part of any company's ability to compete. Truck manufacturers will emphasize service from the company itself and through their dealers. Specialization, on-time parts delivery, and uptime are paramount for carriers, said Lindquist.
Dealers are being encouraged to introduce longer service hours to accommodate customers. "The future of the industry is service," said Penland.
Although companies now offer maintenance contracts, the company representatives predict those services will grow. Gustafson said Volvo will eventually sell carriers miles of guaranteed performance. In that eventuality, the trucks would become the manufacturer's responsibility rather than the carrier's.
Lindquist predicted that powertrain component production will become more proprietary with truck manufacturers making their own products.
Gustafson pointed out that driver shortages aren't likely to improve, which calls for trucks that are driver friendly so that carriers can retain employees. He recommended that truck manufacturers and carriers join forces in trying to improve truck stops. Their amenities can be a deciding factor in driver retention. Improvements that could be introduced include parking lots with electrical outlets, Internet-cable linkups, and telephone access.
However, despite the best efforts to ease driver dissatisfaction, serve carriers, and operate in a growing economy, the transportation industry must continue to deal with growing public criticisms. "Safety is a wildcard for the trucking industry," said Gustafson. "The public's attention on truck safety is becoming critical. This is bringing a very high-pressure situation on Washington."
As a result, regulations are likely to be approved that, at the very least, reduce weights and speed. The industry has done a very good job in improving truck safety, and there is new technology on the horizon that will do an even better job. However, the industry should join forces to see that new regulations aren't developed that cause severe problems, Gustafson said.
While manufacturing rates continue to rise, the trucking representatives said they expect to see more company consolidations and acquisitions, a business phenomenon that is occurring throughout the US.
"We see consolidation both in manufacturing and with OEMs," said Gustafson. Lindquist said he expects to see four to five truck companies in the final count.
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