Changing Times, Changing Industry

"The Commercial Vehicle Industry in Transition" was the theme of this year's Heavy Duty Dialogue, held Feb. 16 in Orlando, Fla., by the Heavy Duty Manufacturers Association.

When organizers came up with that theme a year ago, little did they know how prophetic that theme would be.

"With everything going on in our industry today: environmental laws and regulations, shifts in the customer base, globalization, energy issues, liquidity problems, and others, all we really needed was a good old-fashioned recession to make this year complete," noted HDMA President and COO Tim Kraus in his opening remarks.

Joe McAleese, president and CEO of Bendix Commercial Vehicle Systems and 2008 chairman of HDMA, noted that you can't pick up a newspaper or watch the TV news without constant reminders of the economic situation.

"A national journalist recently summed up our current environment by saying all us are feeling a lot like Bill Murray's character in the 1993 movie 'Groundhog Day,'" McAleese said. "Every morning, we wake up and it seems like the same old day all over again: Poor economic news. More job cuts, closings and negative projections. Companies delivering disappointing financial results."

Companies are all developing plans to cope, he said. Worldwide, companies are adjusting their cost structures, restructuring their businesses, cutting jobs and "right-sizing" their operations. A timely economic turnaround, he noted, still seems far from certain.

"Dr. Robert Schuller, a noted pastor and author, once said, 'Tough times never last, but tough people do," McAleese said. "As we address today's business challenges, his words have never been more true."

McAleese also recalled that at HDAW '08, he said that as he looked to 2008 and beyond, he saw opportunity for tremendous growth. "I mentioned that as suppliers, we must foster relationships that enable us to consistently provide value-added solutions to a broad and complex range of issues. I talked about how, as suppliers, we must be deeply committed to being a strong partner, and helping our customers succeed.

"None of that has changed."

McAleese handed off the reins to Dennis Michels, president and CEO of Link Manufacturing, who is 2009 HDMA chairman.

"When we selected this theme almost a year ago, it seemed appropriate. Today, it's an understatement," Michels said.

He noted that Heavy Duty Dialogue in prior years has focused on one or two emerging issues, such as technology, legislation, and globalization.

"Each important and each potentially game changing," he said. "But, it's not just about diesel engine emissions anymore. It's not just about China.

"And, it's not just about steel or energy prices. Recently, rock solid institutions have crumbled, fortunes have been lost, and confidence has been shaken to the core."

"Today, it's a whole new game, with a multitude of challenges to be addressed simultaneously, in an environment we've never experienced before. Profound changes are taking place that will impact the decisions that we make for years to come. We're no longer talking about evolutionary change; now we're talking about revolutionary change."

"When we look back at these times, will we have learned anything?" Michels asked. "Will we conduct business in the future a little differently? Will we be more judicious in entering agreements that are not good for us or that provide too little margin for error? Will we manage with a longer term perspective and avoid the seduction of short term gains? Will our shareholders?

"These are unique times with profound lessons. We're paying the tuition right now. How good of an education we get from it is up to us."

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