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Changes at VTNA

We receive this:

Effective November 1, Mack Trucks and Volvo Trucks North America will be combined organizationally into one Volvo Group business area called North American Trucks.  Denny Slagle, currently President & CEO of Mack, will head the new business area, reporting to Leif Johansson.  Per Carlsson, currently President & CEO of Volvo Trucks North America, will become Chief Operating Officer of the new business area, reporting to Denny.  This is a natural evolution in line with the steps we've taken over the last several years to improve our efficiency and competitiveness (combining "back office" support functions like HR and IT, and more recently moving the Mack headquarters to Greensboro, etc.)

We will continue to have two strong, distinct brands in the North American market, with separate sales organizations, brand strategies, and vehicle ranges.  This change is driven by our desire to create the optimal organization for strengthening both brands in this market.

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Comments (6)

Kevin Scarbel:

Have you looked at a (US-built) Mack truck - lately. Let's ask ourselves, what is a Mack truck today? Is a truck with Volvo engines and a Volvo chassis still a Mack truck? Yes, it still has a cab and hood unique to the brand. But that in fact is all Mack is now, thanks to Volvo - Mack has been reduced to being nothing more than a brand. There was a time when Mack was a company, a powerful force in the trucking industry that made such revolutionary products such as the Maxidyne high torque rise engine, the Maxitorque transmission and the E-9 V-8 engine. But look at a new Mack truck today at your local dealer. First you'll notice the "new" truck is rusting everywhere because Mack and its suppliers are too busy fighting over who should be responsible (pay for) primer painting that it isn't applied. There's just a thin coat of paint on much of the chassis that yields to rust before the truck is sold. Then look at the shoddy way the wiring and air piping is mounted along the chassis. It's a rude awakening to see that the leading Chinese trucks now have equal or better quality of assembly than a Mack truck.

I know old Mack employees are laughing at the news that Mack production which was taken away from Macungie by an arrogant man named Curcio is now all coming back. But I wonder now, since Mack closed its famous plant 5C and sent highway truck production away from Macungie, how many proud and skilled "Mack people" are left in Allentown (the Macungie plant is located outside Allentown).

The company went downhill after former Mack President Curcio tried to break the union and opened the failed non-union plant in Winnsboro, South Carolina for the highway models, from which production was later shifted to New River Valley in southwest Virginia (a horrible location for a truck plant) where Macks have been assembled by Volvo workers. The union in Allentown had actually voted to take concessions so as to keep all production at Macungie, but Curcio was dead set on his destructive South Carolina plan. Many people don't know that the first year of production in South Carolina was a disaster owing to the incompetent workforce there. It was so bad that over 1,000 incomplete trucks had to be lifted onto low-boy trailers and carried from South Carolina to Macungie, Pennsylvania to be completed properly.

Mack was once an undisputed leader in the fire truck industry, and a long-time manufacturer of massive M-Series off-highway mining trucks up to 100-tons. Mack produced electic trolly buses and diesel municipal buses utilizing Mack's self-designed 2-speed automatic transmission (Scania was licensed to produce Mack city buses in Europe). Mack's ingenious and cost-effective "rail cars" were the forerunner of what light rail is today in the US.

Mack engineering has been snubbed by Volvo Group. Mack trucks now use Volvo truck chassis and Volvo D11, D13 and D16 6-cylinder engines (renamed MP7, MP8 and MP10 respectively). Mack no longer actively promotes its legendary dual-reduction drive axles and incomparable triple-countershaft transmissions.

When Renault purchased Mack in 1981, Renault understood the immense value of the Mack brand, and under the superb leadership of Elios Pascual, brought Mack Trucks back into greatness. However Volvo has demonstrated they do not comprehend the value of the Mack brand with their closure of Mack's headquarters in Allentown. All functions have been transferred to Volvo Truck headquarters in Greensboro, North Carolina (inefficiently putting Mack's Macungie factory and Volvo's headquarters hundreds of miles apart).

Volvo has transformed Mack into a brand without a heart or identity, a brand that now makes mediocre disposable trucks at a quality level we 15 years ago associated with Ford and GMC heavy trucks, rather than the impressively engineered trucks that once made the company a legend and major force in the truck industry. Mack had always set itself apart from other US truckmakers as an integrated truckmaker, designing and producing its drivetrain components; engines, transmissions, axles and suspensions carefully engineered to compliment each other resulting in Mack's "balanced design" that yielded efficient and economical performance.

One of Mack's earliest slogans, "Performance Counts", spoke volumes about what kind of a company Mack was. The phrase "Built like a Mack Truck" was so well earned and respected that it become a part of the common language without being advertised. Volvo wasted their money in purchasing Mack, because they don't understand as Renault did the true value of Mack. It's well known that Mack customers have historically been fiercely loyal. But they're not ignorant. When a Mack truck ceases to be a Mack truck, you have lost all that this unique and inconic brand has until now represented.

Viking Voyager:

Oh, for those halcyon days of the '60s, Kevin.

Pontiac GTOs and Plymouth Roadrunners ruled the streets. Every living room sported either an RCA Victor or Zenith television. Some of them were even in color! Pearls and Schmitzes cooled in Frigidaire and Kelvinator refrigerators, make with US and Bethlehem Steel. In the skies overhead, Lockheed and McDonnell Douglas airliners whisked passengers to all corners of the continent.

Mack, International Harvester, and White Motor Company trucks blanketed the nation's highways, piloted by proud members of the International Brotherhood of Teamsters, and watched over by the benevolent bureaucrats of the Interstate Commerce Commission.

But, Kev, would seem your rose-colored glasses are the wrong prescription for you.

By the end of the 70s, Mack was already in deep trouble, along with the other two. Renault rescued them from oblivion during the 1981-2 recession, while White went bankrupt and International was preserved only through divine intervention by their bankers, and the magnanimity of some of their suppliers.

Rust on today's Macks? Look up "rust" in Webster's, and you'll find a picture of a '78 R-Model taken outside Syracuse in '79 as an illustration.

Volvo came along and bailed Renault out in 2001, after the French company had milked what dividends they could out of the brand without investing to build a future. The Swedes have filled that void, providing capital for new products, regulatory compliance, and system enhancement.

Volvo is taking a beating in the trade and financial press over the decline in Mack market share, unfairly in my view. The traditional regional strongholds of Mack's business, the northeast and the upper Midwest, have been the hardest hit by four out of the last four recessions, and simply don't account for as much of the overall market as they once did.

In the rest of the country, Mack sales rest almost entirely on dumps, mixers, and other work trucks related to construction. These have been as sale-proof as McCain/Palin bumper stickers recently, further depressing market share.

Volvo does have big issues in North America, but they stem from their reluctance to drive meaningful improvements in their cost position when they had the luxury of doing so, not their handling of the Mack product. They've hung in too long with old-line, UAW (Un-Affordable Workforce) plants, while their competitors have shifted well to the south, on both sides of the border.

They have excessive European content in all of their products, when the EUR/USD is unfavorable and getting worse.

Giving the Volvo nameplate to long-serving Mack dealerships has likely done neither brand much good.

And they let their North American rivals run away with both the dealer networks and the customers that went up for grabs in Mexico when the NAFTA agreement went into effect fifteen years ago. Mexico is the only growth market in North America.

Using a common engine platform for both brands is a problem? Grown men weep at the thought of an EPA10 version of the EM7 engine. At least, those grown men whose tear ducts aren't already dry from trying to keep EPA04 variants of that venerable, but outdated, powerplant running.

The customers who ARE active in today's market, truckload and private fleets, and full service leasing companies, wouldn't buy a Maxidyne/Maxitorque/high-entry double-reduction combo if it was the ONLY truck being offered to them.

Sorry, Kevin, but Back to the Future wouldn't work for the Bulldog, any more than reviving the GTO model did for Pontiac.!

Kevin Scarbel:

Thank you for your comments. I actually don't have any "Back to the Future" thoughts, nor glasses of any kind. Mr. Lutz's revival of the GTO wasn't a bad idea, just bad timing amongst unforeseen circumstances.

But about Mack, my thoughts remain that Mack has become a cheap truck. Mack used to stand above many other brands, noted for its durability and resale value. Under Volvo, Mack customers have experienced chronic problems that have all but destroyed the intense loyalty that Mack once enjoyed. The modern Mack has become a cheap "throwaway truck" like a Freightliner, worn out at 400,000 miles. Mack's used to roar into their "second life" while flimsy Freightliners and other lesser trucks roared into the junkyard to be parted out.

Mack's build quality has reached low levels. It's perhaps shocking to note that the leading Chinese truck brands now have equal or better build quality. The Mack truck today is not the Mack product of 15 years ago, which is why Mack is no longer an industry leader. And I can only blame that on Volvo, as they have been pulling the strings.

The Mack E-7 E-Tech engine was indeed "E-Junk". I couldn't agree with you more. But under whose stewardship was that disastrous engine introduced? That would be Volvo Group. They pushed that Renault engine upon Mack rather than allow Mack to design their own engine.

Why doesn't Mack have a V-8 engine today? Because Volvo told Mack to terminate V-8 engine development and use the Volvo in-line D16 instead. Many Mack customers, like Scania customers, appreciate V-8 engines. But Volvo's personal desires are more important than those of Mack's customers. Volvo arrogantly lectures Mack on how things are going to be, and consistently has displayed little interest in "listening" to Mack dealers and customers (why would you want to do that?).

You mentioned that Renault "had milked what dividends they could out of Mack without investing to build a future". I'm sorry, but you must not be in a position to know how things really went. After Mack CEO Jack Curcio ran the company into the ground and bankruptcy looming, there was nothing to "milk". Unlike Volvo, Renault realized the value of Mack and invested huge sums of money after the 1981 purchase to rebuild the company. Mack employees were at first very concerned, needless to say, about what would transpire under Renault. But Mack people quickly realized that Renault was dedicated to rebuilding the Mack Company, and thus, Renault and acting Mack President Elios Pascual quickly earned the respect of Mack employees. Elios Pascual revived the Mack team spirit originally inspired by the legendary Zenon C.R. Hansen. If you look at the numbers, Mack performed extremely well under Renault. Only after Mack was solidly back on its feet again did Renault slowly begin to repay itself the money it had invested in Mack's recovery - a completely reasonably business action.

For a company like Mack, with a long unique history of being the US market's only vertically integrated truckmaker, I think it is a problem for Mack's to use Volvo engines (and chassis), particularly because Mack components were for decades far above average. Every part of the Mack truck from the engine to the axles to the frame and suspensions earned a legendary status so great that the truck's reputation for strength became common knowledge in the American household. Every housewife knew what "built like a Mack Truck" meant. Such respect in the market can only be justly earned. But sadly today under Volvo, Mack has lost all of that respect and become merely one on the crowd.

Viking Voyage:

Pretty much a one-note tunesmith, Kev. The GTO was a great idea in 1964, but a failure 40 years later.

The Maxidyne pretty much followed the same trajectory. The EGR version was largely developed in the Renault era - Volvo would have had only 21 months to develop new, Mack, variants from their own powerplant, and install them in the myriad of models and chassis, so they were stuck with what was already a very long-in-the-tooth design for at least one more cycle.

Volvo successfully litigated against Renault V.I., their largest single shareholder, for redress over the undisclosed and unprovided for warranty issues that plagued the EPA98 Mack engines. They got a reduction in the selling price of several hundred million Euros.

As to the V8, that decision had been reached before the sale. Homologation costs for the EPA04 standards were higher by an order of magnitude than for any previous regime, and impossible to rationalize on a volume of only a few hundred engines annually. V's offer weight and height advantages vs inline designs, but are more complex to install, and to service subsequently, as well as having inherently higher NVH to deal with.

Scania's mainstream engines are inline 6s, and the only large producer still using V arrangements is Mercedes, whose new global engine has six, big, pipes in a row.

Archie McCardell can't be blamed for the issues of today's NAV, and urinating on Jack Curcio's plan to address all of Mack's growing issues in one, fell, swoop, back in 1985-6-7, isn't really relevant today, either. Fortune magazine covered that quite well in a contemporary article.

As I recall, the 4-valve head version that plagued the company at the same time the Winnsboro start-up exploded, was developed entirely in A-town, and assembled by UAW workers in Hagerstown.

There were those pesky corrosion problems....

And, housewives don't buy big trucks!

Kevin Scarbel:

The inarguable point that I have expressed already is that there was a time when Mack was a powerful force in the trucking industry, standing on its on two feet, setting its own agenda, setting industry trends with revolutionary products such as the Maxidyne high torque rise engine, the Maxitorque transmission, Dynamax wet clutch, CF fire chassis, MH Ultra-Liner with Maxi-Glas cab construction, MR Series refuse truck, and the E-9 V-8 engine.

While I was discussing the original 237hp and 300hp true Maxidyne engines, you seem to be discussing the Maxidyne-designated "ASET AMI" high torque rise version of the Renault E-Tech engine.

I don't quite understand your focus on the GTO. In that same light though, the Datsun 240Z was a great idea 40 years ago, and the 370Z is a great idea today. But anyway......

Mack's V-8 range could have continued under development to meet current emissions standards as Scania and Benz have done, to meet customer demand. But as I said, Volvo killed Mack's popular V-8 offerings because Volvo wanted to use the Volvo in-line D16 instead, totally disregarding the V-8 preference of Mack customers.

When Curcio's non-union Winnboro plant opened in 1987, the engine at the time was the extremely reliable E-6 4-valve engine. The tremendous quality problems were with truck build quality. The E-7 E-Tech engines was introduced in late 1989.

If not for Mr. Curcio running Mack into the ground, sending Mack reeling in the direction of Renault and Volvo, Mack would probably still be an independent truckmaker today. It is precisely because of Mr. Curcio's poor stewardship that the company had no choice but to be sold.

I don't appreciate your mention of urination on this forum. I believe we can all express our views while speaking on a higher plane that that.

Kevin Scarbel:

Now Volvo Group's North American truck operations of "Mack Trucks" and "Volvo Trucks North America" will be merged into a single organization called "North American Trucks" (NAT).

In my humble opinion (not worth enough to buy you a cup of coffee), a bland and generic name like "North American Trucks" has as much depth and personality as a piece of drywall. On one hand, I realize they don't want to call the company "Mack-Volvo Trucks North America", because that would be politically incorrect, stating the obvious that Mack is no longer Mack, which would arouse customer questions leading to the realization that Macks are now essentially Volvos, with engines and chassis as a strong example. This would further disallusion what little Mack brand loyalty there is left. It would also beg the question, why buy a Mack truck with so many Volvo components when I can just as well buy a Volvo? And if the customer is not a fan of Volvo product, than "NAT" has lost out altogether due to the Mack-Volvo link as the customer will purchase a competitor truck.

I'm no fan of Navistar, but at least the name "Navistar International" does denote the truck brand, the central pillar around which the company exists.

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