Friday, 19 December 2014

Navistar to end engine production?

The decision by Navistar International Corporation to close its foundry in Brookville Road, Indianapolis raises the whole question of ‘make or buy’.
Taken to its limit, Troy Clarke, the company’s chief executive officer, might for a moment, mull the possibility that Navistar should end all engine production and eventually source all it engines outside.

Cost-benefit analysts will be aware of the manufactured cost of every Navistar engine – and prices paid for engines bought in.

In the Class 8 truck sector, it is difficult for the outside observer to ascertain the true level of bought-in engines from third parties like Cummins Inc.

The level of activity is imprecise to say the least. Freightliner, part of Daimler North America Trucks, itself part of Daimler AG, for example is rumoured to make between 30 and 40 per cent of its own engines ‘in house; through Detroit Diesel Corporation, based in Detroit, Michigan, using components shipped in from Mannheim in Germany. The company, which also makes axles, transmissions, safety systems and telematics, builds 13-, 15- and 16-litre diesel engines for heavy duty trucks.

The balance of engines used by Freightliner for Class 8 vehicles is derived from Cummins in Columbus, Indiana, principally the ISX15 and to a lesser extent the ISX12.

Volvo Powertrain, part of Volvo Trucks has an engine plant in Hagerstown, Maryland, which makes D11, D13 and D16 diesel engines as well as I-Shift automated manual transmissions (AMT). This former Mack Trucks engine plant could be sourcing some 30 per cent of Volvo’s and Mack’s Class 8 diesel engine requirements, with the balance of 70 per cent sources from Cummins.

Paccar, the last of the major North American Class 8 truck producers, aside from Navistar International, is thought to make only one-tenth of its own engines – the MX13, developed originally by Daf in the Netherlands

Paccar has taken the subject of in-house engine building serious with a new engine manufacturing facility in Columbus, Mississippi. This new engine plant is rated to feature state-of-the-art CNC tooling in both machining and assembly processes. Paccar engineers argue that this provides the extremely tight tolerances necessary today in all manufacturing operations to meet emissions requirements. Engineers note too these processes result in reliable, long-lasting engines with industry leading design life. The plant however was late in coming on stream.

Built on 242 acres of land with 125,000 square feet of laboratory space, there is also a technical centre that offers a facility to test engine and vehicle integration, 24 hours a day, seven days a week. A high-speed test track as well as a durability test track allows Paccar to thoroughly evaluate components and systems.

However, notwithstanding this investment, the balance of engines for Paccar Class 8 trucks is sourced from Cummins.

So is it possible in future that Navistar could outsource all its engines for Class 8 trucks? This would make it highly dependent on Cummins; the truck-makers might not be keen to rely on one source of supply.

If it did happen however, it would, intriguingly, go directly against the current trend to greater vertical integration set by its three competitors.

Although Navistar’s MaxxForce 11 and 13 diesels are based on European MAN designs, it is understood that ongoing technical cooperation between the German company and Navistar is now practically non-existent. So if Navistar wanted to shutter its Huntsville, Alabama engine plant and curtail production of the MaxxForce 11 and MaxxForce 13 diesels in favour of power units from Cummins, it is unlikely there would be a squeak from MAN, which would have little or no involvement.

Even several years ago, Navistar powertrain engineers were happy to ‘go their own way’, reluctant to listen to engineering advice from their MAN colleagues at the Munich headquarters, and Nuremberg where MAN engines are manufactured.

At least Navistar and Paccar use engines in North America with compacted graphite iron (CGI) block.

Meanwhile, on a different front, Navistar’s lightest truck is the TerraStar, a class 5 vehicle built at the company’s Blue Diamond Escobedo facility in Mexico.

 This vehicle, an ex-Blue Diamond product, is powered by what Navistar classifies as its MaxxForce 7 engine (referred to elsewhere on the Navistar website as the N7). This engine is, to all intents and purposes, the same up-to-300bhp 6.4-litre V8 ‘PowerStroke’ unit previously supplied to Ford.

No optional engine is listed on the website, although the Cummins’ 6.7-litre ISB diesel would offer equivalent performance. It does however raise the question: being a longer, narrower I-6 unit would fit under the TerraStar’s hood? The ISB diesel is already an option in the slightly heavier-duty DuraStar, so both commercially and politically the precedent is set.

In view of the Indianapolis foundry closure in 2015, is it possible the 6.7-litre V8 MaxxForce 7 which prompted the initial – and expensive – spat with Ford, will be cancelled before too long? Is it already on Troy Clarke’s shopping list?

No comments: