This week, we decode warnings about what stressed supply chains mean to truck makers; share some social commentary from Cummins and Wabash National; and look at a busy round of business tie-ups. You can get Truck Talk delivered via email by subscribing at https://www.freightwaves.com/truck-talk.
May the chain be unbroken
Messages from truck makers and major suppliers in their earnings reports this week suggest downtime and production delays impacting the light-vehicle industry may be closing in on commercial vehicles. The big issue is a global shortage of semiconductors. Those are what operate computer-controlled systems in vehicles. That’s everything from the engine to safety systems. Daimler AG (OTC: DDAIF) Volvo Group (OTC: VLVLY) predicted disruptions without specifics. The contagion hit Ford Motor Co. (NYSE: F) again Thursday. It is cutting F-150 pickup production at plants in Michigan and Missouri. The F-150 pickup is the industry’s perennial sales leader and Ford’s cash cow.
In a blog post pushing incentives for increased U.S. production of “the brains of modern electronics,” the Semiconductor Industry Association gave some hope. More ominously, the association suggested that the coming electric vehicle revolution will only require more microchips than are used today.
“The supply base is generally tight, not just semiconductors, which has gotten a lot of press. Many of our components are on longer lead times,” Cummins Inc. (NYSE: CMI) President and Chief Operating Officer Tony Satterthwaite said on the company’s earnings call Thursday. “Our suppliers and we are struggling with absenteeism due to COVID. We are working very closely with our customers to remain connected and to continue to supply them as best we can.”
Don Ake, vice president of commercial vehicles at FTR Transportation Intelligence, said this week that steel plants took longer than expected to fire back up. And imported parts deliveries are being delayed up to two weeks at the ports.
Social issues soapbox
In the days following the Jan. 6 storming of the U.S. Capitol, companies large and small expressed outrage. Almost a month later, Wabash National CEO Brent Yeagy framed condemnation of the act as part of the trailer supplier’s environmental, social and corporate governance (ESG) focus during the company’s fourth-quarter earnings call. “The events that occurred at the Capitol were especially appalling to me, and I’ve ensured both internally at Wabash and externally that my position is clear. It was wrong and an embarrassment to our country and for our democracy to be so specifically assaulted while the peaceful transition of power was underway. CEOs and value-minded companies have an opportunity to lead on social issues, and we choose to do so.”
Yeagy was not alone. Cummins Chairman and CEO Tom Linebarger signed an op-ed that appeared Monday in the Indy Star calling for President Biden and Congress to pass legislation that ensures permanent protection for “Dreamers” or codifies the Deferred Action for Childhood Arrivals (DACA) program. “Let’s focus on something on which we all can agree — we need to do right by Dreamers. They arrived on our soil as children and have done nothing wrong. They are Americans. They’ve grown up here, attended school and are significant contributors to our economy and society; some have even served our country in the military. Let’s remove the fear and uncertainty now and put them on a path to citizenship.”
Second life for batteries
Volvo is looking at the long game of electrification — long as in what to do with a battery when its useful life is exhausted in a commercial vehicle. The newly established Volvo Energy business unit is tasked with finding secondary use for the remaining energy in the batteries. Volvo President and CEO Martin Lundstedt says giving vehicle batteries a second life “is both a business opportunity and a way to contribute to the creation of a circular economy and a fossil-free society.” Volvo Energy also will be responsible for hydrogen infrastructure solutions for fuel cell electric vehicles. It will have profit-and-loss responsibility. It will report financial results through Volvo Trucks. Joachim Rosenberg is in charge of the new business. Volvo sold UD Trucks to Isuzu Motors as part of a technology partnership in electric and autonomous trucking.
Howdy, partner
A busy week of business tie-ups. Where to start? Goodyear Ventures, the mobility investment arm of the tire maker, is putting an undisclosed amount in autonomous truck startup TuSimple. Goodyear (NASDAQ: GT) last year began a strategic partnership to provide tires and tire management solutions as part of TuSimple’s Autonomous Freight Network. … Cummins and Isuzu Motors (OTC: ISUZY) agreed to work on a global midrange diesel powertrain and an advanced engineering collaboration. This builds on the Isuzu Cummins Powertrain Partnership formed in May 2019. Cummins will provide Isuzu midrange B6.7 diesel platforms for midsize trucks. … XL Fleet (NYSE: XL), fresh from its public debut, is partnering with refuse truck maker Curbtender. They will develop a series of battery electric and plug-in hybrid electric commercial trucks for waste management applications. The frequent starts and stops that trash and recycling trucks make is ideal for electrification, which cycles regenerated energy from braking back to the battery.
People, places and things
Chuck Joseph, a former senior executive of Amazon’s (NASDAQ: AMZN) global transportation technology team, has joined autonomous truck startup Plus as vice president of strategic partnerships. … Antonio Ruiz, Nikola’s director of fuel cell vehicle code and standards, will lead a three-year hydrogen fueling global standardization project for the International Standardization Organization’s Technical Committee 197. His committee of international experts will focus on the standardization of systems and devices for the production, storage, transport, measurement and use of hydrogen. … The financial services arms of Volvo Group siblings Volvo Trucks and Mack Trucks will pilot an integrated insurance service on a digital platform. The goal in working with insurtech company REIN is to help drivers get coverage and file claims in real time. … The Nikola Tre battery-electric truck is just in prototype build. But it picked up a nice accolade this week, winning a 2020 Good Design award.
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See you next week.
Alan