Mack: Truck production at all-time high; 2019 likely another strong year

[kscarbel2]

Aaron Marsh, Fleet Owner  /  August 21, 2018

ALLENTOWN, PA. Has the North American Class 8 truck market—which hit a record high for orders last month—peaked? It's possible, speculates Martin Weissburg, the new president of Mack Trucks, but for now, every indication is that demand will stay very high for at least a few quarters. And 2019 is looking likely to be a strong year for the market as well, the OEM predicts. 

Weissburg took the reins at Mack on June 1, which he calls "the dream job of a career based in the heavy equipment industry," and says he and the company are keeping in close tabs with suppliers to be sure there's enough parts to keep the assembly lines rolling. The company isn't experiencing any shutdowns, but that requires constant vigilance.

"We have our share of challenges in a stretched supply chain. Mack Trucks is not immune to that," he told reporters in a meeting yesterday at the Mack Customer Center. "Just when you fix one [potential supply problem], there's another pain point that pops up."

On that note, he said Mack's truck production at its Lehigh Valley Operations in Macungie, PA, which boasts some 2,400 employees, "is at an all-time high" and the facility is putting out as many trucks as it can. Instead of speeding things up any further to get more trucks out the door, though, "if anything, I'd rather slow the line down to ensure quality," Weissburg noted. "We never let a truck out that's not ready."

He added that with competition extremely high among OEMs, any compromise in quality and decrease in truck reliability would only come back to haunt you. "We view any truck down as a crisis," Weissburg said.

To help with that, since any truck lineup will have breakdowns, Mack's Uptime Center in Greensboro, NC takes calls and assists 24/7 if a Mack truck has a problem. That relatively new facility and service are part of what Mack sees as essential to new truck sales going forward, according to Jonathan Randall, senior vice president of North American sales at the company.

He said Mack has been testing out over-the-air updates with "several hundred" trucks from across Mack's lineup. Rather than having to bring a truck in to a dealership, OTA service can handle a variety of things like software fixes and updates and can be scheduled when the driver has some available time. As it's currently set up, the truck's ignition is switched off and back to "on" and the update/ service can be performed.

Mack began working with OTA service after studying truck repairs. The OEM found that the average time in the shop for trucks was four days, but the average repair took only four hours. So there's an opportunity to save fleets and drivers considerable expense by avoiding that shop visit.

"It's all about limiting breakdowns, but when downtime or dwell time occurs, it's about making it as little as possible," Randall said. With increasing computerization of heavy trucks, OTA service and updates are one approach to solving the problem.

The follow-up after the sale has also become a key point in this market for OEMs to differentiate themselves. "Buying a Mack truck is not just a point-in-time purchase," Weissburg said. "We're a relationship company, not just a vendor of trucks."

Mack has invested some $3 million in its Allentown Customer Center in the last few years and another $80 million in the Lehigh Valley Operations truck assembly plant. That's not a static thing: "There's always the need to spend more in a factory," Weissburg noted.

Mack's dealer network has also been making sizeable investments in shops, personnel, parts, and facilities, according to the company. All those elements of the supporting network have come to bear in this year of very high market demand.

Weissburg also contended Mack has been well-positioned with its product portfolio, including a fresh on-highway offering with the launch of the Anthem tractor last fall. It made for good timing, although he pointed out the company might've wished the launch came about six months earlier.

He said demand for the Anthem "has exceeded all our expectations." While he didn't get into specific figures, he and Randall said Mack has had twice as many orders for on-highway trucks so far this year than the number of those trucks the company delivered in all of 2017.

On-highway was a weaker point for Mack prior to this, and it's an area the OEM is looking to grow its market share. Randall noted that on-highway trucks is where all the frenzy has been this year in terms of truck-buying—so much so that other areas like construction, where demand has been more level, have shrunk as part of the overall sales equation. Still, another big part of Mack's sales continues to be the Granite, which has also seen recent updates and can be spec'd as a dump truck, mixer, tractor, and other configurations.

Also in terms of future preparation, Mack announced this spring it would begin testing a fully electric LR refuse truck with the New York City Dept. of Sanitation. "The first prototypes are in the works, and we're going to bring that out in late '19, early '20 for the first demo units," Weissburg said.

"This is coming," he added. "The conventional wisdom is that start-stop operations like refuse are going to be an absolute winner for electrifying trucks."

Mack hasn't released its predictions for the Class 8 market next year, but Weissburg said the company expects it will be another strong one. There are, however, forces that could constrain things.

That includes tariffs on materials needed to build trucks, he noted, and even if a manufacturer's particular supply lines aren't affected directly, "the tariffs have created an environment for other suppliers to raise their prices," Weissburg said. "So there's price pressure upwards," and overall costs could increase.

The labor market is also extremely tight, he added, with industrial jobs at a 17-year high. "We feel very fortunate we've been able to attract and retain the talent that we have," Weissburg said.

While Mack dealerships have made investments and upgraded facilities, he said "they have their challenges" with labor as well, such as finding and keeping the best technicians.

And of course, it's still difficult to fill all the driver's seats of those trucks—no matter how strong fleet orders and freight demand might be. The industry is short about 50,000 drivers overall, Weissburg noted, and that figure is poised to double.

On that note, he said the Anthem has done well. Though the truck "is a business tool and its first job is hauling freight," fleets that have purchased it have been able to use it as a driver recruitment tool at hiring events, he argued. 

"We've had customers put it out front and say, 'If you come and work for us, you can drive that truck,'" Weissburg quipped.

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[Lmackattack]

That's good news for mack. I hope they continue the upward trend . I do find it odd however ... I don't know of any local company's seriously looking at mack these days and I dont see the once loyalty that people once had. I would agree with their comment that they have moved further into the OTR market and are selling more? I just don't see new macks in construction like I did in years past.

[1965]

Had some limestone delivered today; guys running new granite’s (pedigreed dogs) they had camel back also, M-Drive & the drivers didn’t like the M-Drive. They couldn’t raise the bed while moving?

its another outfit that’s got a bunch of them too & the 1’s I’ve seen were M-Ride. I’m thinking he had M-Dives & traded this last time with Allison. This guy trades real regular. Haven’t noticed if he’s switched suspensions.

[Nobody454]

M-Drive won't engage the PTO while in gear, while an Allison will.  Big negative in my book

[kscarbel2]

Mack's New Top Dog Addresses Company Successes and Challenges

John G. Smith, Today’s Trucking  /  August 22, 2018

Though just recently named president of Mack Trucks, Martin Weissburg is no stranger to the trucking industry.

“My whole career has been with trucks, trailers, construction equipment,” he said during a broad-ranging discussion with media at the company’s customer center in Allentown, Pennsylvania.

He was named president June 1, succeeding Dennis Slagle, who had been in the role since 2008. Before that, Weissburg held senior and executive positions with the Volvo Group, including president of Volvo Construction Equipment in Europe, president and CEO of Volvo Financial Services, and president of Volvo Financial Services America.

Having grown up in Maryland near Mack's headquarters in Pennsylvania, Weissburg described his new position with Mack is "the dream job."

The company has seen improved sales as a result of the economic boom, as well as the success of the Mack Anthem, which helped the company gain share in the highway segment. Sales for models with 70-inch sleepers have doubled in comparison to last year.

"It couldn't have come at a better time," Weissburg said. "The highway segment is just smoking."

Production at the company’s Lehigh Valley Operations facility is now at an all-time high, with 2,400 employees, including 400 personnel added since last year last year.

The booming economy presents its own challenges, though, as it has with other manufacturers.

“Generally speaking, we’re in an environment where costs are up,” he said, referring to the prices of raw materials like steel and aluminum as an example. Not all of those increases are related to Trump administration tariffs. But the tariffs have created an environment that has seemingly given every supplier permission to raise prices.

Labor demands are adding price pressures of their own, with industrial jobs at a 17-year high and more open jobs than there are applicants. “Logistics costs are up for everyone,” he added. Even those who make the trucks are paying more for those services.

“We have our share of challenges in the supply chain as well,” Weissburg said, referring to constraints that keep build rates from growing at a faster rate. “There’s no single, major point of pain. Just right when you fix one, there’s another one.”

To push Mack forward, the company continues to make new investments, primarily geared toward maintenance. Certified Uptime Centers and over-the-air engine updates are meant to cut down maintenance time and address preventative maintenance issues.

Mack is also looking toward electrification, with plans to demonstrate an electric Mack LR refuse truck for the New York City Department of Sanitation in 2019. "This is coming," Weissburg said. "We can envision a fully electric site in the future."

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[kscarbel2]

“My whole career has been with trucks, trailers, construction equipment,” he said

I don't see any background in trucks. He's a finance guy, with zero background in commercial truck R&D, manufacturing, sales and after-sales, parts distribution, service.......

Source - Bloomberg..............https://www.bloomberg.com/profiles/people/16704218-martin-weissburg

Career History

• President Mack Trucks Inc, 6/2018-PRESENT
• Senior Advisor Volvo AB, 1/2018-PRESENT
• Exec VP/Pres: Construction Equipment Volvo AB, 3/2016-12/2017
• President Volvo Construction Equipment SA, 1/2014-12/2017
• President Volvo Financial Services, 5/2010-1/2014
• President:Americas Volvo Financial Services, 2005-5/2010
• President Woodard LLC, FORMER
• President Great Dane Financial, FORMER
• Mktg Management Trainee Caterpillar Inc, FORMER

Expensive bottled water, San Pellegrino and Perrier........to impress?

---

Source – The Morning Call……. http://www.mcall.com/business/mc-biz-mack-trucks-president-martin-weissburg-visits-allentown-20180814-story.html#

MARTIN WEISSBURG

Title: Mack Trucks president and member of the Volvo Group executive board. Also, the senior Volvo Group executive in North America.

Age: 56

Home: Greensboro, N.C.

Background: His career began with Caterpillar Inc. when he was recruited to take part in the company's management trainee program upon his graduation from Purdue University. After getting his MBA from George Washington University, Weissburg went on to be president of Great Dane Financial and then president of furniture maker Woodard LLC. He joined Volvo Group in 2005 as president of Volvo Financial Services America, later becoming global president and CEO of Volvo Financial Services from 2010 to 2013. From 2014 to 2017, he was president of Volvo Construction Equipment.

Truck background?

[kscarbel2]

New Mack Trucks president: It's 'not if we spend more, but where do we spend more next' at Lower Macungie plant

Jon Harris, The Morning Call  /  August 22, 2018

Martin Weissburg became president of Volvo Construction Equipment on Jan. 1, 2014, taking the helm of the second-largest segment within the Sweden-based Volvo Group at a time when the low-performing business had marginal sales growth and weak earnings.

Fast-forward to the end of 2017. That’s when Volvo Construction Equipment boasted a 31 percent sales increase and its operating margin, a key measure of profitability, grew to 11.9 percent — top among its peers.

With the turnaround complete, Weissburg was ready for his next task — one that would bring him closer to where he grew up in Maryland. So when the position of Mack Trucks president became available, the 56-year-old said he quickly raised his hand for what he considers “the cherry on top” of a career based in the heavy equipment, truck and trailer industry.

Weissburg officially assumed the top job at Mack on June 1, though he arrived in the United States in January and worked closely with Dennis Slagle, who had led Mack since 2008. Weissburg joins Mack at a good time, with the truck maker in recent years pumping $3 million into its Allentown customer center, another $84 million into its Lehigh Valley Operations assembly plant in Lower Macungie Township and millions more into marketing and partnerships, such as the match-made-in-marketing-heaven deal with Oakland Raiders star Khalil Mack.

Business isn’t bad either. Mack is taking in more orders this year, largely on the strength of its new highway truck, Anthem, that was unveiled in September and hit the assembly line in Lower Macungie this year. But Mack, like most of the trucking industry, is grappling with supply chain constraints as parts suppliers try to keep up with the hot market. As such, Mack has a backlog of orders that company officials say is longer than they would prefer.

The company employs about 2,400 people at its Lower Macungie plant, an all-time high for that facility, which completed its first highway truck Nov. 19, 1975, with a 700-strong workforce. Weissburg said the plant added another “many dozen” over the course of the summer.

Looking forward, Weissburg said he expects the robust demand for Mack products to continue for at least a few more quarters as 2019 also is shaping up to be a strong year. But inevitably, he noted, there will be a correction downward in the cyclical heavy-duty truck market, though it’s not clear yet when that time will come.

The truck market, supply chain constraints and the company’s Lower Macungie plant were among the topics Weissburg discussed Monday at the Mack Customer Center in Allentown during a question-and-answer session with reporters. Here are excerpts from the session:

Q: Are you building on market share in the highway segment?

A: Absolutely. We’re building significant share. Again, it’s from a position lower than we wanted to be historically but you can say from that position, there’s significant opportunity for us to gain highway share. By virtue of the Mack Anthem, we have gained share in the highway segment, and we’ll continue to gain share in the highway segment. When you spend the money and time developing a product like the Mack Anthem, it’s not to sit back and hope it goes OK. It’s to play offense, and that’s what we’re doing.

Q: Are there particular supply constraints that are holding you back?

A: We have our share of challenges and a stretched supply chain, as well. … Without getting into the details, because I won’t, there’s no single major point of pain. Just right when you fix one, there’s another one point of pain sometimes that pops up. I’m close also with our suppliers, and I empathize with their challenges. The market is very hot, strong demand on component suppliers, castings. And, I’d say less so for us but more so for our suppliers, it’s very difficult to attract skilled labor to some of our suppliers. I think a lot of them have the ability and capacity as well from a fixed-asset standpoint, but from a labor standpoint, a lot of them are really stretched thin. We work very closely with our suppliers to make this happen. One of the benefits of being part of a very large, very strong, very well-managed global group is that we have a global supply chain and we leverage that, I think, pretty darn well.

Q: How do you maintain quality when there’s a boom and there’s pressure to get them out the door?

A: We never ship something until it’s ready to be shipped. And we never rush it. I’d rather be a day or two or more late and make sure it’s the quality of a Mack truck.

Q: So you don’t just speed up the line?

A: No, sir. That’s the last thing we would do, because that’s just asking for problems on the back end. If anything I’d rather slow the line down by X percent to ensure we have Mack quality and maybe have to push the delivery. The Mack brand promise carries a certain expectation of quality, reliability, durability. One of the greatest joys I get, and I’ve only been in my current role for a few months, is looking on the highway or looking on the job sites and see: How old is that Mack truck that’s pulling the dirt trailer? That’s one of the greatest joys I get. Trust me, we love to see them trade it in and buy a new one, don’t get me wrong, but it’s that reliability and durability of Mack, and it all starts with the quality designed in and the manufacturing quality before it ever leaves the plant.

Q: Could you talk a little bit about the core of the operations that are in the Lehigh Valley and the future of the operations here?

A: When we think of Mack Trucks, we think of the Lehigh Valley. For us, we can’t separate the two. This is our ancestral home. The company got started in Brooklyn in 1900 and moved here in 1907. Terrific workforce for all those generations. We continue to invest in the facility here. It’s the only Mack factory as far as truck manufacturing. So by definition, we are in partnership with the Valley and our employees. We are very invested, not just in the facility, not just from a financial standpoint, but as a community member and a citizen.

Q: Where is everything at with the $84 million investment in the Lehigh Valley Operations (LVO) plant? Is everything completed, running as efficiently as it should or is there still some work to be done?

A: In my prior position, I had 15 factories located around the world, so I will tell you that none of my factories are ever running as efficiently as we would like them to be. The LVO plant has made just very impressive improvements in productivity and efficiency and culture over the years. Every factory, every operation, including the executive office, always has room for improvement. The $84 million, that’s what has been invested to date recently. That’s not earmarked for future investment. That’s what we’ve already spent, and we’ll continue to spend as needed.

There are always needs in a factory for additional spending. I won’t go into the details of that now, but I had a meeting earlier [Monday] and ones [Tuesday] at the factory, where we’re talking about not if we spend more, but where do we spend more next because you have to maintain state-of-the-art technology and facilities and keep moving things forward. We will continue to do that here in the Lehigh Valley.

Q: Is there still capacity at the Lehigh Valley Operations plant? Could Mack need another plant down the road?

A: Right now, we’re well-invested and, I would say in the capacity that we have in all of our facilities, things are working well. It’s hard to forecast the future, but there’s ample room in the LVO factory right now.

Q: Is it kind of landlocked over there?

A: It’s a bit landlocked, not as much as you think. In an industrial setting, we’re working and our local leader, Rickard Lundberg, is doing a very good job of efficiency and productivity improvements. You can have the same footprint but as you do things differently and even in a smarter and smarter way, you can get more productivity out of the same square footage. That’s what the team there has been doing successfully, and there’s always room for improvement on that still.

Video - http://www.mcall.com/business/mc-biz-mack-trucks-president-martin-weissburg-visits-allentown-20180814-story.html#

[brenner]

3 hours ago, Nobody454 said:

M-Drive won't engage the PTO while in gear, while an Allison will.  Big negative in my book

Unless they have changed something, my 2013 will engage it in gear and spread as well

[Nobody454]

6 hours ago, brenner said:

Unless they have changed something, my 2013 will engage it in gear and spread as well

no kidding? the way I understood it, the MDrive can't be in gear and have the PTO function at the same time? Maybe there are different ways to set it up...company here can't spread with their MDrive tractors, only the allisons

[Maxidyne]

They must not spread with dump trucks in Sweden...

[Maxidyne]

Weissburg said. "We're a relationship company, not just a vendor of trucks."

Sorta like another failing company, HOG(NYSE)? Stuck too with a legacy product that's no longer competitive, will the Mack dealerships start to look like Harley dealers?