REDFORD, Mich. — In a hockey-themed plant inauguration, Daimler Trucks’ Detroit brand celebrated the start of production of its DT12 automated manual transmission and announced the launch of its mid-range engine line here Friday.
The hot-selling DT12 was previously built in Gagenau, Germany and shipped to North America for installation in Freightliner and Western Star trucks. Daimler pumped US$100 million into its Redford, Mich. plant to bring production to these shores.
“More than 40% of our Freightliner Cascadia and Western Star trucks are sold with an automated transmission and the take rate is still climbing,” said Dr. Wolfgang Bernhard, head of Daimler trucks globally. “It is a huge success and it makes us really proud. It is now time to make the next step; it’s my pleasure today to announce the start of production of our DT12 right here in the US, right here in Detroit, right here in Redford.”
Production at the plant was momentarily halted to celebrate the milestone and about 2,000 employees, media and dignitaries gathered to hear Bernhard’s remarks. The plant inauguration was emceed by former Detroit Red Wing Micky Redmond. It was also attended by a beaming Roger Penske, who bought the company in 1988, saved it from potential bankruptcy, turned it around on the success of the Series 60 and then sold it to Daimler.
“I didn’t know what I was getting into but it was an opportunity,” Penske said, noting at the time the company had lost $600 million in three years, languished with 3% market share and was suffering strained relations with employees. “I’m proud to see what is taking place today.”
Martin Daum, CEO of Daimler Trucks North America, said the company has “completed the hat trick” by bringing DT12 production to Redford, where it also builds its heavy-duty engines and axles.
“We now manufacture the entire powertrain lineup – engines, axles and transmission – right here in Detroit and that means we can integrate, synchronize, make it perfect,” said Bernhard. “We can offer the most powerful powertrain in the country and it gives our customers more reason to demand Detroit.”
Daimler also announced the launch of its medium-duty DD5 and DD8 engines, which will also be built in Redford, eventually. Configuring the plant for the mid-range engines represents another US$375-million investment into the facility.
“Today, we complete our lineup,” said Bernhard. “We launch our new medium-duty engines, the DD5 and DD8 into the US market and what’s more, we’re not only going to sell them in the US, but by 2018 we will also build them right here in Detroit, right here in Redford.”
With the new engine launch, Daimler says it will bring the benefits of vertical integration seen on the heavy-duty side to the medium-duty market.
“Detroit medium-duty engines will provide what no other manufacturer in North America can offer – a total vehicle solution that matches Daimler’s global engineering prowess with the most complete lineup bar none in the industry,” said Daum. “I am pleased to announce that select Daimler Truck North America vehicles will be available with medium-duty power by the end of 2016, and full production will take place in Detroit by the end of 2018.”
In a press conference following the plant inauguration, Daum said Daimler will continue with its two-supplier strategy, offering Cummins engines as well in its medium-duty trucks.
“This won’t change our business with Cummins because we have in every segment a two-supplier strategy. We want to give our customers choice and ultimately it’s the customers that are going to decide,” Daum said.
When medium-duty engine production is brought to Michigan in 2018, it will add about 160 new jobs. Until then, they’ll be produced in Mannheim, Germany. The new engines will be available for order in 2016 in the Freightliner M2. Details regarding engine ratings and other specific features of the new mid-range engines were not yet revealed. Daimler Trucks North America has in recent years become a stronger player in the medium-duty market, capturing about 40% of the US Classes 6/7 segments in each of the past few years.
Daimler also announced its entire lineup will comply with impending 2017 greenhouse gas emissions requirements early.
Daum said he expects the truck market to remain strong in 2016, though orders will likely land somewhere between an excellent 2015 and a very good 2014.
“We will finish the year strong and the start of the year will be strong through the first quarter,” Daum said. “We’ll see how the rest of the year unfolds. We don’t have that security we had a year ago where we were sold out at the beginning of the year but this is not normal for business, you should every day worry for your business and fight for it.”
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