In the heady world of North American Class 8 trucks, for the likes of
Cummins, Eaton and Meritor, life is a constant battle (in engines,
transmissions and axles) against the forces of vertical integration that are steadily
being imposed by European-controlled OEMs.
In a recent
interview with Automotive World, Eaton’s new vice-president of
technology Gerard DeVito, questioned about the growing trend towards vertical
integration in the North American commercial vehicle industry, puts on a brave
face.
DeVito asserts
that the new competition faced by Eaton, as a truck and bus transmission
manufacturer – and by independent engine maker Cummins – is ‘a
motivational factor’ in improving their products and technologies.
More
specifically he admits that “while it has put pressure on us, it has kept us
smart on our game, motivating us to be ahead in terms of innovation.”
Two of the ‘big four’ heavy-duty truck
builders in the US, that is Daimler-owned Freightliner and Volvo (which also
controls Mack Trucks), both long-time OEM Eaton customers, are now increasingly
promoting their own in-house gearboxes instead; although Paccar and Navistar
remain predominantly ‘Eaton dependent’.
Many would argue that Eaton for years,
as an independent supplier, had enjoyed an effective monopoly, albeit
challenged in 2006 under US anti-trust laws by Detroit-based Meritor, acting in
conjunction with its joint-venture partner from Germany, namely ZF. Last June,
Eaton lost its case and allegedly paid a US$500 million fine to avoid a US$2.4
billion damage claim from ZF-Meritor, as reported by Automotive News. http://www.autonews.com/
Automotive News noted: “Meritor
Transmission and affiliate ZF Meritor LLC sued Cleveland-based Eaton in 2006
for violating antitrust laws. A jury ruled in 2009 that Eaton damaged Meritor
and gained 90 percent of the market for truck transmissions by offering ‘exclusive
dealing contract’ and unfair rebates.”
Meritor could therefore, if it felt so
inclined, go ahead with a marketing putsch to compete on heavy-duty gearbox
supply, with what is a ZF-engineered product. It would be competing not only
with Cleveland-based Eaton Corporation but with the vertical integrators
Daimler and Volvo.
But Meritor, if it decided to make a
move of that kind, would be likely to focus its efforts on Paccar. Paccar’s
Kenworth and Peterbilt trucks are already offered with diesel engines of
European heritage, developed by its subsidiary DAF in the Netherlands.
Significantly, all DAF heavy trucks are equipped with ZF transmissions. (Significantly
too, both DAF and MAN engines use compacted graphite iron (CGI) I6 cylinder
blocks, though Volvo has yet to declare its production hand in this area). It would be logical to transfer that well-proven European engine-gearbox package
across the Atlantic.
Paccar could justly claim that its own
in-house engines and ZF gearboxes are as well matched as the wholly in-house integrated
powertrains currently proclaimed loudly by Daimler and Volvo – and, crucially,
by the Cummins-Eaton ‘partnership’, itself regarded in many quarters, not least
by Daimler and Volvo, as a product of marketing desperation.
Observers will closely monitor the
Cummins-Eaton ‘collaboration’ as, in the words of DeVito, the products are described
as “more competitive”. The latest ‘package’ teams the Cummins Westport ISX12G –
an engine powered by natural gas – and Eaton’s Fuller Advantage Series Automated
manual transmission (AMT). Of these, DeVito claims “they meet the current
demands of the industry and the ever increasing push for efficiency and
reductions in emissions”.
Likewise,
when considering fuel efficiency, Jodi Presswood, vice president and general
manager, heavy-duty truck product line at Navistar International is reported as
saying “the use of the Cummins-Eaton SmartAdvantage powertrain is essential”.
Navistar has also announced that it will continue to update and improve the
package.
Navistar,
however, has not been without various ‘slip-ups’ on its own account in the area
of vertical integration. The company dare not shout too loudly.
For, while
MAN recognised that downstream SCR (selective catalytic reduction) would
be essential in meeting Euro 5 and EPA 2010 requirements, for some reason
known only to himself (perhaps) Navistar’s then chief executive
officer turned his face against adopting SCR for his new CGI-based MaxxForce 11 and 13 engines
that had their lineage linked to two similar-sized MAN engines.
This failure on the part of Daniel
Ustian effectively led to the non-compliance of the MaxxForce 11 and 13 power
units as well as and, just as important, the company’s diesel engine strategy being
further shattered to the point that many pain-staking years of development lay
on the cutting room floor.
This left the Lisle, Illinois
business with no alternative but to go cap-in-hand to Cummins for SCR technology and compliant diesel
power for its Class 8 trucks, simply to maintain its ability to push new trucks
out of the factory doors and generate income.
As it was,
Navistar had failed earlier to update its long-established mid-range 7.6- and 9.3-litre
in-line, and 6.4-litre V8 engines to meet tougher emission regulations while
remaining competitive on fuel efficiency and reliability.
The loss of the contract to supply
the V8 PowerStroke engine to Ford added a further humiliating blow, leading eventually
to the recently-announced closure of Navistar’s engine foundry in Indianapolis –
a CGI foundry no less.
Many observers expect Navistar, no
longer the diesel engine power house that it was, to make further moves away
from in-house engine supply. The 15 litre-Cummins ISX is already specified
increasingly by heavy-duty International tractor customers, in favour of the
12.4-litre MaxxForce 13. Cummins is undoubtedly keen to see its own
equivalent-performance ISX12 on Navistar’s options list, with a view to its
also becoming the standard offering
So Cummins’ latest link-up with Eaton
could be the precursor for a further diminution of Navistar’s engine portfolio,
providing the current chief executive officer, Troy Clarke, with the
opportunity (should he need it) to possibly cut engine manufacture altogether and
move further away from vertical integration
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