“The outlook – especially for the U.S. market – is clear: we’re in for a rough ride.” –Andreas Renschler, head of the global truck division for Germany’s Daimler AG
It’s hard not to like guys like Andreas Renschler – executives obviously used to hobnobbing with really big names in the global community of business and politics that have absolutely no problem sitting down informally with low-level scribes like myself to talk shop. Armed with written remarks, Renschler -- head of the global truck division for Germany’s Daimler AG -- laid them to one side at our table and immediately asked for questions on anything – the U.S. political scene, the future of alternative fuels and emission regulations, how to restore economic vitality to world markets, the decision to shut down Sterling Truck Corp., you name it.
Renschler’s take on dealing with the current economic crisis, for example: “The biggest support government can do for the economy and truck markets is infrastructure investment. The roads have to be refurbished anyway and for us [as truck builders] stimulating such investment is the best help. There’s no economic growth without transportation and if our customers make money, we make money.”
On a possible delay for 2010 diesel engine emission mandates: “This is the wrong approach, for postponing these mandates sends the wrong signal to the market about the importance of the environment. We understand the concern about costs, so what we did in Europe was incentivizing the emission issue: offer incentives to buy the cleaner trucks. That does two things: stimulate the economy and clean up the environment. We like it, the customer likes it, and it works.”
On raising taxes on trucking: “My point of view is that it is fair to tax trucks – what is unfair is to tax ONLY one mode. You cannot tax just our customers – you must tax the railroads and the airlines when it comes to funding transportation needs. The issue is competitiveness – taxing just one mode of transport creates a competitive advantage for the others and that is what is unfair.”
On why infrastructure strategy is critical: “In Europe, we understand that we are losing competitiveness because we cannot efficiently move goods around. Yes, we put money into infrastructure but only in certain areas: the autobahn [the highway system] and high-speed rail at the expense of secondary roads and regular rail lines. That increased congestion and delays, which pose larger economic issues.”
On alternative fuels: “Understand this: there is no silver bullet when we talk about alternatives. Everyone uses trucks in different ways – that is why we are working on a wide range of vehicle technologies. A diesel-hybrid bus works well in the cities, in stop-and-go operation, whereas a refuse truck is better suited for natural gas. A highway truck, though, needs diesel and there the focus is one of improving that engine’s fuel efficiency. For us, though, the main thing is the customer must gain an advantage from alternatives.”
Renschler’s outlook for truck sales is none too rosy, as you can read in our lead story today. Yet he’s quick to note that Daimler doesn’t plan to throw its hands up over the situation. “Our ambition is clear: we won’t use this crisis as an excuse and we’re very busy controlling the things we can control,” he said. “It’s true we live in uncertain times. But in the truck business, one thing is still certain: there’s always the next upturn.”
Preparing for the current downturn cycle is why Daimler decided to shut down its Sterling subsidiary back in October, he added. “We found that there was a 50% overlap in products between Sterling and Freightliner,” he said. “And with demand falling we had to adopt a new position. It’s a question of being ready for the twists and turns in the road ahead.”
There are sure to be a lot of them over the next year – and it’ll be interesting to see how the truck makers cope.
[Just for fun, I’ve included a slick rock and roll video Daimler put together to highlight its global truck business. Hey, it IS Friday after all!]