Austempered steel and iron components are critical to today’s Class 8 Trucks (over the road trucks with load capacity exceeding 33,000 lbs). Austempered Gray Iron (AGI) cylinder liners make diesels more durable. Austempered Ductile Iron (ADI) suspension, powertrain and engine components make those systems quieter, lighter, more durable and cost effective. (In fact, heavy truck is the number one market segment for ADI worldwide). Austempered and Carbo-Austemperedsm components in heavy duty powertrains push their performance envelopes. Applied Process is proud to be a world-wide leader in Austempering technology and the significant role we play in the production of world-class heavy trucks.
Today’s Class 8 trucks are lighter, more powerful (yet more efficient) and more durable than ever. Tiered, increasing Federal engine regulations in the last ten years have caused sales to lurch initially up, and then downward, from over 350,000 units per year at the peak to less than 150,000 units last year. But those regulations (and the Great Recession) are now behind us and demand is stirring. With TransCore’s North American Freight Index running 10-15% ahead of last year month-to-month and fuel prices moderating, trucking firms are in a buying mood. Heavy Duty Tucking reported on research by ACT Research that orders in the first quarter of 2011 are the strongest since 2006. In fact, the article reports that the backlog (as of June) of orders for new, Class 8 trucks is an eye-popping 126,000 units……a 55 month high.
In an interview with Heavy Duty Trucking, Navistar’s Senior VP of North American Sales was quoted as saying, “There are a lot of orders out there, but I’m going to tell you something: they aren’t going to get built because (there) just isn’t the supply base out there to handle the kinds of increases we’re seeing”. Ditto comments by the President and CEO of Daimler Trucks North America, Martin Daum made at the Mid-America Trucking Show. Hebe referred to supply chain problems with “tier two and three” suppliers in places like India, China and Korea failing to deliver and then, “the whole thing falls apart”. In the interview Herbe verbalized what we already know, that “A lot of production has also moved to Mexico in the past few years. There isn’t the capability to ramp up capacity in those other countries like we have here. It’s just not going to happen”.
Hmmm, that would seem to be an endorsement of US production capabilities. If they went off shore for components and moved assembly to Mexico to save money and now cannot produce say, 50,000 additional trucks this year, I wonder how much money they actually saved?
So, this year in North America we’ll build 225,000 or up to 300,000 trucks depending on how well the Indian, Korean, Chinese and Mexican suppliers do? Thank goodness for our Steady Eddy US manufacturing customers who are stretched to the limit, but supplying high quality components just-about-on-time. I’m all for sourcing parts in China for the Chinese market, or in India for the Indian market, or in Korea for the Korean market, but do you think the Class 8 OEM’s might re-think sourcing parts in those countries bound for trucks built in North America? I guess this year the answer to that question will depend on how much the “low-cost” outsourcing costs them in new truck sales. Don’t mind me. I’m just the heat treater…..it must take a high-paid OEM bean counter to figure this stuff out.