ONLINE EXCLUSIVE: Freightliner chief bemoans lack of engine incentives

TORONTO — Outdated engine technology is effectively being promoted by the U.S. and Canadian governments, says Freightliner LLC president and CEO Chris Patterson.

By failing to provide incentives to truck buyers in support of buying environmentally superior 2007 engines, both Washington and Ottawa have left many fleet managers and owner-operators with no option but to avoid the substantial extra cost of the new diesels. And with a “profound” price increase coming again in 2010, he fears yet another up-and-then-down sales cycle launched “by human intervention” alone.

“In my opinion this is bad public policy,” he told attendees at the Heavy Duty Manufacturers Association breakfast held during the recent Mid-America Trucking Show in Louisville. The result, he said, is that the efforts of the Environmental Protection Association (EPA) to provide cleaner air have been compromised as old engines are being used longer than they should be.

Freightliner could be building half its trucks in
Mexico over the next five years, Patterson tells us.

In terms of truck sales, this meant a record year for all truck and engine makers in 2006, but it’s had a devastating effect on ’07. Worse, in fact, than once anticipated. In a private interview at Mid-America, Patterson told Today’s Trucking that fully 70 percent of his company’s existing orders are booked for the second half of the year. Hardest hit are sales to the over-the-road class 8 market, the company’s core strength.

“I’m beginning to see the ramp-up later than August,” he said. “Definitely before the end of the year we’re going to see a big surge in orders.”

Patterson’s projection for 2007 class 8 sales industry-wide is 220,000 in Canada and the U.S., which is on the low end of the consensus. Other OEMs and tier-one suppliers have been predicting sales in the 220,000-230,000 range. But it’s still going to be the 7th or 8th best year on record.

That said, for Freightliner at least, medium-duty sales are showing strength, vocational sales are largely isolated from the OTR trough, and export sales are very strong. Patterson noted increasing market share in Latin America, supplied out of Mexico, where the company is presently building a new US$400 million factory.

“By 2012,” Patterson told Today’s Trucking, “we could conceivably have 50 percent of our class 8 build down there, and possibly some medium-duty too.”

On-highway Freightliner trucks have already left the company’s old, original plant in Portland, Oregon. Production of such trucks there came to an end last week, moving to plants in both North Carolina and Mexico, and taking some 750 jobs away in the process. Only Western Star and military trucks are built in Portland now.

There’s other news on the Freightliner horizon, with the coming launch of both an all new heavy-duty truck and a “world” engine in the next few months. In May, dealers and the press will see the introduction of an entirely new tractor, with production — in North Carolina — slated to start in August. And that same month will see the birth of a new Detroit Diesel motor.

Aimed at all DaimlerChrysler markets globally, the engine will be available first in North America and it’s slated to be Freightliner LLC’s only heavy-duty offering in 2010. That means only one aftertreatment system will have to be conceived, engineered, and manufactured. It will be built in Detroit, Japan, and Germany, with parts sourced from literally all over the world. After its launch here, it will be sold alongside the Series 60 and MB 400 until 2010.

As far as ’07 engines are concerned, there still aren’t enough of them in the field, in owners’ hands and working, to get a good fix on how they’re performing. Freightliner will deliver 1000 of them in the first quarter of this year, as many as 3000 in the second quarter, Patterson said. But the Detroit Diesel test engines in the field — having done some 30 million miles — have proven reliable, he added. And drivers like them, he said, because of the improved throttle response derived from the variable-geometry turbochargers they use.

— Look for more of this exclusive interview with Freightliner chief Chris Patterson in the May issue of Today’s Trucking.

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