Bottom Line
The future of spec’ing
Options change as truck makers move toward 'vertical integration'

By Paul Abelson
senior technical editor


Back in the early 1990s, I attended a truck show in Germany. I got in a heated discussion with some representatives of European truck makers.

In Europe, manufacturers traditionally have made or controlled virtually all components in a truck. You tell the maker’s representative what you are going to use the truck for and where you will use it.

The maker responds with a quote based on what power and torque they determine to be best for your operations. They tell you how many gears you will need, what the gear ratios will be in your transmission and drive axle, and so on.

If you approach Mercedes, you have no choice but a Mercedes engine, a Mercedes transmission, Mercedes axles – and whatever brakes, axle ends, wheels and tires and more that Mercedes selects. The same is true with Volvo, MAN, Iveco, Renault and most others.

A few companies offer Cummins or Caterpillar engines, but for all intents and purposes, European trucks are vertically integrated. That term means all components are made or selected by the truck maker according to its own specifications.

We in North America, on the other hand, have traditionally approached things “horizontally.” You, the customer, can select the engine by make, model, displacement and power ratings. You can select the make of transmission you want: the number of gears, the transmission range (direct, overdrive, double-over). You select axles, wheels, tires, steering, and virtually every component on the truck.

“How can you let someone who is not an engineer specify what goes on a truck?” the Europeans asked me. “Truck users cannot know how to design a truck. They cannot engineer the way products work or do not work together.”

That typified the European system, whereby technology is a primary consideration and users rely on integrated truck/engine/drivetrain makers to get the specs correct.

That is quite a contrast to the American custom.

“How can someone who doesn’t use the truck sit at a drawing board or at a computer and tell me what will or won’t work in my operations?” one American asked. “Our decisions are based on experience.”

Perhaps the ultimate example of customer specification was by Roadway in the ’80s and ’90s. The late Don Dawson was vice president in charge of equipment. He was a legend at The Maintenance Council (TMC) before Technology was added to its name. The Silver Spark Plug award winner is still honored and remembered with an annual scholarship to a diesel technician school.

Those plain-looking trucks that Roadway operated were highly engineered for their particular operations, but not by the truck builder. Dawson and his staff analyzed maintenance costs to the last decimal. Problems were identified. They were examined as opportunities to upgrade specifications for greater reliability, lower operating costs and reduced downtime.

The result was that an order for a Roadway tractor could run upward of 30 pages, single-spaced, each specified item with its own line. Dawson specified engines and transmissions, and he specified hoses, fittings, fan belts, radiators and virtually every fastener.

In many cases, he paid an upcharge to get selected components. If an item wasn’t standard with a manufacturer, volume discounts may not have been available. Many nonstandard items had to be engineered into the truck, which took engineering time.

You can add almost anything to your truck once you own it, but before a manufacturer can sell it, they must certify it as meeting all applicable Federal Motor Vehicle Safety Standards.

Today, the situation is complicated further with EPA emissions regulations. No one is allowed to tamper with emissions-related equipment under any circumstances.

These are the two extremes of truck integration: vertical, as developed in Europe, and horizontal, as practiced by Roadway.

The manufacturers prefer vertical integration, whereby they select and engineer only their products or a limited number of sourced products that they have evaluated.

Fleets with high-volume buying power specify products they want, and most truck builders will try to work the products into the production line – or they used to. Now, builders on our side of the pond are finding associated costs that can’t be covered with a reasonable surcharge.

Garrick Hu, vice president of Advanced Engineering at ArvinMeritor, told me about his experiences at a truck maker he used to work for.

When analyzing warranty charges, they found air conditioners to be responsible for an inordinate number of claims, with very high labor dollars. Customers were specifying brand “W” compressors, brand “X” evaporators, brand “Y” condensers and brand “Z” receiver/dryer units.

When something failed, each supplier assigned responsibility to another supplier. By selecting one total system, the supplier could be held responsible for the function of the entire system, and warranty claims were virtually eliminated. Training production workers was easier. They did not have to use different tools and techniques depending on which components were selected. Incompatibilities were eliminated.

By taking control of the sources and simplifying manufacturing, the truck maker slashed warranty claims and saved millions annually. More importantly, they kept more customers up and running and happy.

That thinking can be applied to the selection of engines and drivetrains. Today, all engines and a growing number of transmissions are computer-controlled. Engines and transmission are made using standards set by the Society of Automotive Engineers. They specify mounting points, bolt hole placement and shaft sizes – virtually all that is needed for a good mechanical fit. Physically, engines are interchangeable.

But today engines are far more complex. Essential engine parts, such as exhaust gas coolers, turbochargers, fuel lines and engine computers, must be located where they are away from other components and heat sources. What fits well in one truck may wind up being in a terrible location on another. And with engines and transmissions communicating electronically, systems must be software compatible with each other and with their host vehicle.

Emission-reduction components change every few years to meet ever tightening regulations. They must be engineered into each vehicle, and accessories on each vehicle must be engineered around the emission devices. Where once there were dozens of engine-vehicle configurations that had to be engineered every 10 years or so, today there are hundreds that change every three years or so.

With the introduction of emission controls, the odds of putting your favorite engine in your favorite truck started to diminish. Add in the complexity of automated manual transmissions, and drivetrain choices started to narrow.

Meritor’s FreedomLine and Eaton’s AutoShift and UltraShift can be put behind Caterpillar, Cummins, Detroit Diesel, International, Mack and Volvo engines, but not all engines accept all transmissions in all makes.

Ed Saxman, product manager of drivetrains for Volvo Trucks North America, put it this way: “2010 will be an interesting challenge. As trucks get more complex, truck OEMs don’t have the time or resources to work with a wide variety of engines. Much of the challenge of EPA 2010 installations will be electronic, especially the integration of (on-board diagnostics – second generation).”

The system electronically monitors the status of the emissions system, managing controls and recording status. It will allow government agencies to plug into a truck’s data port to monitor emissions.

“The real benefit of vertical integration,” Saxman said, “is when you pull the drivetrain together. The engine and transmission will work together. It’s the difference between being integrated or just assembled. We still offer Cummins, but not with I-Shift. We can use any transmission behind our engines, but we can’t use any engine in front of I-Shift. The integration in the electronic realm is quite intense.”

Part of the reason that such vertical integration results in increased efficiency is that manufacturers can use more proprietary information in their computers. Saxman said that the I-Shift has a complete “map” of the Volvo engine’s operating algorithms. It anticipates and coordinates electronically with each Volvo engine.

That’s something a vertically integrated OEM can do, but independent engine and transmission manufacturers may not be able to do. The software developers may also be reluctant to provide that information outside their own company.

Cummins supplies engines to all four domestic truck makers, Daimler, International, Paccar and Volvo/Mack, although Mack no longer offers them.

“Worldwide, nine of Cummins’ top 10 customers produce their own proprietary engines,” said David Geraghty, executive director of commercial vehicle engine business at Cummins.

“They are primarily vehicle manufacturers while we are an engine maker. Engines are our fundamental core business and our focus. We have all the technologies in place in-house, from turbochargers on the intake system to exhaust after-treatment (diesel particulate filters).”

Daimler Trucks North America – Freightliner, Sterling and Western Star heavy trucks – have their own Detroit Diesel and Mercedes engines. Cummins is the exclusive non-proprietary mid-range engine supplier for the Freightliner Group.

Geraghty sees a future for sourced engines vs. proprietary engines at all North American OEMs. But, he cautioned, “our products must be better. Our customers must demand them, and our product support and service must be better.”

Cummins is working hard to integrate its EPA 2010 engines with the OEMs.

Next year, Paccar will be making its own Class 8 engines in Columbus, MS. Based on its European DAF engine, the 12.9 liter MX will provide up to 515 hp and 1,850 lbs.-ft. of torque for Kenworth and Peterbilt trucks. The company is already delivering its own PC engines.

Cummins engines will continue to be available for both makes, as will Caterpillar, at least for now.

Most new proprietary engines are in the 12- to 13-liter range, with horsepower peaking in the high 400s or low 500s. For 15-liter and 16-liter engines, PACCAR and International will have to turn to Caterpillar or Cummins. Volvo and Mack have their own 16-liter engines.

Caterpillar’s theme at the Mid-America Trucking Show was “We’re in it for the long haul,” although questions have been raised in the trade and financial press questioning the engine maker’s future in the trucking market.

Caterpillar’s CEO, James Owen, has repeatedly made public statements indicating the company would produce truck engines in 2010 and beyond.

What does all this mean to you, the future truck buyer? There will be more competition, because proprietary engines will still have to prove themselves against vendor engines. Instead of the four big-bore engine builders we once had (Cat, Cummins, Detroit and Mack), we now have seven including Mercedes, Volvo and International’s MaxxForce. Next year Paccar will bring the total to eight.

Competition keeps prices reasonable and drives product improvement. The vertical integration still leaves you choices, far more than any European buyer has, but without the potential chaos that unlimited choice would offer.  LL

Paul Abelson can be reached at