The
latest twist in developments at Navistar International (see Navistar ditches DT
466 in Class6/7 trucks) suggests the North American truck maker is moving away
from vertical integration.
At a time when Class 8
rivals Freightliner, Paccar and Volvo are trying to encourage customers to buy
in-house engines, Navistar appears to be edging in the other direction when it
began to specify the ISX 15-litre engine from Cummins Inc.
There was a time not so
long ago when Navistar was embracing Caterpillar’s 15-litre engine as the way forward
towards creating the MaxxForce 15. But this adventure had to be scrapped when
it became clear that an EGR-only strategy for the company’s engines was a ‘no
go’ area as a means of meeting emissions requirements.
We now have the news that Navistar
will adopt the Cummins 6.7-litre engine in its Class 6 and Class 7 DuraStar
trucks, in favour of the venerable in-house DT466, implying on the one hand the
death of the DT466 (and all the implications of that) and the potential end of vertical
integration. Navistar elected to use Cummins's SCR technology for MAN-derived MaxxForce 11 and MaxxForce 13 engines. Navistar seems very close to Cummins. Why did the company not go to MAN for the SCR technology it would add to the MAN-derived engines? That would have seem the obvious route to take. Or is that just tto simple for words?
Customers of Class 6 and
Class 7 medium duty truck are perhaps less discerning in their choice of
engine; they are more concerned with the financial returns the truck will
deliver, so fuel economy and durability are vital matters.
When it comes to Class 8,
as Freightliner (Daimler AG), Kenworth and Peterbilt (Paccar) and Volvo/Mack
have shown, it is much harder to convince potential customers to go down the
route of using in-house engines, even though for the truck builder this is the
most economic route to adopt. That such engines are European designed may be a contributory
factor.
Each of these North
American truck makers has tried to persuade customers to use Mercedes, Daf and Volvo
engines respectively with varying degrees of success. But at the end of the
day, operators of such vehicles like to choose their engine with as much enthusiasm
as they will have a preference for cabs, suspensions and so on.
In March this year, Eaton
and Cummins unveiled a new powertrain package for the North American line-haul
and regional haul truckload markets that could deliver three to six per cent
fuel-economy improvements over separately-specified Cummins/Eaton engine-transmission
pairings that were available previously suggests a coming together of component
suppliers to protect their long-term interests. By joining
forces, the two American
powertrain suppliers are clearly in a better position to resist the powerful,
European-driven, shift towards vertical integration.
How are such fuel economy
gains possible? The advent of electronic powertrain management
– initially of engine fuelling alone, but later by way of turbocharger control
and, more crucially, automated mechanical transmission (AMT) shifting, that matching
of the two crucial elements of the powertrain combination has become ever more
sophisticated.
Engine
and transmission can now communicate with one another in a manner that hitherto
was not possible. Such communications
benefit fuel economy and/or performance, even to the point that customers can
select programs, depending on their operating requirements. Thus,
fleet owners can opt for permanent economy mode, while the owner-driver with
his switch in the cab, can trade off some fuel saving for better acceleration
when needed.
This ‘coming together’ of
engine maker and transmission supplier through the advent of ‘digital
technology’ could have major implications for firms like Navistar. Whether
Navistar will be affected by this remains to be seen, but as the truck maker
and Cummins Inc. grow ever closer and depend increasingly on one another, all
kinds of opportunities may unfold
Extending the line of vertical
integration thinking further throws up another, seemingly outrageous possibility.
Because of vertical integration, Cummins could lose so much of Daimler’s,
Paccar’s and Volvo’s business that it might cut its losses and acquire Navistar
International outright, given that troy Clarke’s turnaround plan does not prove
achievable. In that way, Cummins Inc. would suddenly become a truck and
engine maker, and a vertical integration champion.
Whatever happens next as
Navistar’s supremo Troy Clarke draws up his plans for the future, it would seem
that Navistar is set to make increasing use bought-in engines, and this surely
will have implications for Navistar’s three engine plants as no doubt we shall
hear in the months to come. ∎
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