LOUISVILLE, Ky. — The recovery of the trucking industry from the economic downturn remains slow and uneven, Bendix Commercial Vehicle Systems President and CEO Joe McAleese said here Wednesday.
“The first quarter OE build has been good as the industry was using up the end of the 2007 compliant engine inventory, but there will be a significant correction during the second quarter because of the lack of 2010 engine orders and the third and fourth quarters of 2010 depends on freight, the overall economy and the performance of 2010 engines,” McAleese told reporters at a news conference at the Mid-America Trucking Show under way here.
Looking a little further into the future, McAleese said the industry would face slow job growth and a slow economy recovery for the next three years.
“North American and European truck-build will remain significantly below the peaks of 2006 in North American and 2008 in the European Union,” he said. “Competitive environment will be redefined with a focus on globalization and cost take-outs to maintain competitive advantage.”
McAleese said economic growth in BRIC countries (Brazil, Russia, India, China) would surpass growth rates in developed markets of North America and Europe with OEMs targeting global opportunities.
He predicted Bendix and Bendix’ parent company Knorr-Bremse and other suppliers strengthening their BRIC country footprints.
There was no doubt that 2009 was, because of the economic recession, one of the most difficult years faced by the current generation.
He likened the experience to the television show “Survivor.”
“Why? Because the spirit of the people competing against each other is so impressive, and the situations they face are so demanding,” AcAleese said. “Yet, somehow, despite extraordinary circumstances, competitors find themselves still standing, still alive, and still looking forward to the next challenge.
“Like ‘Survivor’ competitors, we found ourselves treading in unfamiliar waters, competing even harder for our market share and customer loyalty. We had to set new goals and priorities so that we could not only survive, but so that we could thrive in that environment by designing, and engineering, fresh ideas to benefit our customers and our industry, while preparing for the next challenge.”
He cited several factors he said contributed to the challenges of 2009, including a weak U.S. economy, a weak global economy, the significant North American freight recession, significantly underutilized/parked trucks, the collapse of the aftermarket, the collapse of the OE truck build and an extensive global economic downturn that had a significant long term impact on the dynamics of the commercial vehicle industry.
McAleese listed several ways in which Bendix had dealt with the 2009 issues and what it was doing to position itself for the future.
First, rapid cost restructuring actions were taken to revised market conditions and to stabilize business operations, he said.
“We successfully met the challenge in 2009, but we focused on maintaining our growth orientation, and we continued to fund a strong majority of our growth programs,” he said.
Looking to the future, McAleese said Bendix would continue its efforts to adopt safety technology vs. pushing for government mandates, but noted that some government mandates would inevitable, adding that is was only a matter of time.
He said Bendix would continue to push for tax incentives for purchase of the new technologies.
“Our focal point is to develop the value proposition for the fleets as these technologies do have a nice payback,” McAleese said, noting that large, sophisticated fleets were adopting because they had the data to support payback and the funding to buy.
Now the challenge, he said, was to gain larger penetration among smaller fleets.
“ When you think back, the past 12 months have, indeed, been a lot like being one of the castaways on ‘Survivor,’” he said. “The challenges and changes in our industry and our global economy have, at times, been stressful and tested our patience, but they have also made us stronger, more flexible, more resilient. I’m very proud of what the Bendix team has accomplished and where we are going. We’re headed down the road to innovation and growth and we’re getting there together. It’s going to be one heck of a ride.”
Lyndon Finney of The Trucker staff can be reached to comment on this article at firstname.lastname@example.org.