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Final act for Foden as Paccar calls time
Page 6
Page 7
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FODEN DEMISE
Paccar has called time on Foden.
The CM news team explore the implications of the marque's demise.
NEXT YEAR sees the end of 150 years of manufacturing history as Foden ceases operations.
Although its parent company Paccar says it is -evaluating the option to retire the manufacture of its Foden Alpha range from August 2006" insiders at the Sandbach firm say closure is inevitable. Paccar stopped truck building at Sandbach in 2000 and moved production to its Leyland plant.
The need to create extra manufacturing capacity within Paccar's Leyland factory to produce more Daf trucks is apparently behind the closure. Paccar is struggling to keep up with current levels of demand and has created an extra 300 jobs at Leyland this year.
Paccar says that if the closure goes ahead the 42 Foden employees at Sandbach will be offered positions at either Leyland or Dd.
It cannot he expected that the marque's customers will follow. David Burke. marketing director of MAN ERF UK, adds: "It is always sad to get the news of a proud British truck brand ceasing production. However, this is an evolutionary step in the truck business, and one that is not dissimilar to that experienced by ERE "Certainly, if previous such demises are anything to go by, not many Foden operators will automatically switch to the parent manufacturer, in this case Daf, but will take the opportunity to review all potential competitors. I would be very disappointed if we could not satisfy at least 12-15 % of the former Foden customer demand, say around 100-120 units."
Foden had recently turned the corner in terms of product quality following the low point of the early 1990s where years of under-investment had begun to take their toll.
Last year Foden sold 915 trucks according to SMMT figures. IT'S NO COINCIDENCE that the same press release which trumpeted the fact 300 new jobs were being created at the Leyland assembly plant should also contain the sentence: "Paccar is evaluating the option to retire the manufacturer of its FodenAlpha range from August 2006."
Right now Daf is desperate for more production capacity to cut its lead times, especially in the UK where it's currently market leader with a record 28.2% slake. Moreover, Foden's modest order intake was probably not enough to justify its production space at a time when Daf s Eindhoven plant has hit a capacity"brick wall",leavingLeyland the only place where more Daf chassis could be built.
The figures say it all. Last year 13,000 right-hand-drive Dafs rolled off the Leyland line — and only 915 Fodens. And while this year some 16,000 Dais will be built at Leyland, Foden's production total is expected to be little different from 2004.
In short, Foden chassis are getting in the way of building more Dais — and not just on a straight chassis-for-chassis swap either, as Paccar can argu ably build two, muchneeded, Daf LF 7.5ton ners in the same production slot needed to complete a single Foden Alpha eight-wheeler.
When CM spoke to Foden's managing direc tor Erik Hansen he said he was disappointed by the announcement. "Foden is fully committed to the continued support and after-sales care of its customers and dealers." he adds.
However, Hansen knows that despite any remaining support and goodwill for the famous "kite" marque when it comes to getting atten tion, Daf has always been the senior partner in Paccar's European product portfolio. While he clearly didn't come to the UK to shut the company down, finding the definitive business case for Foden's long-term survival has proved elusive for Hansen.
In an interview a year ago Paccar boss Mark Pigott confirmed:"Every company in Paccar presents their case for all their product development.
That's the way we do it ...we look at the best in investments that meet our thresholds.Insisting Foden had "tremendous potential" he added: "If you generate the best returns, you get a good amount of investment."
On that basis Foden's returns clearly haven't been enough to attract that all-important investment, despite various bids for more money and new products, including a Foden-badged 'big' tractor based on the XF cab. Moreover, its limited numbers and higher cost-base (through using proprietary driveline components) mean it's been unable to match the discounted prices of major Continental rivals, especially on big fleet deals with tractors.
Although Paccar has never broken down the financial figures for its two European subsidiaries within its overall annual report, insiders tells us Foden has slipped into the red. In the end it was never going to be anything other than what it always was — a niche player, surviving on a loyal customer base. And in an increasingly global market, that's no longer enough.
• Foden dealers have had a very good reputation in the marketplace and many have worked hard to improve the penetration of the marque overlie past few years, particularly since UK rival ERF was bought by MAN.
Many have been disappointed by the news. Richard Crump, chair of the Foden dealer body, summed up the mood of most dealers: "It's very disappointing, but the most important thing is that Paccar has guaranteed customers will be supported with parts and service for the indefinite future."
Royston-based Foulger (CVS) is a service agent for, and operator of, Forlen products. Director Glenn Foulger said: "We were at a dealer meeting with Foden about a month ago and there was no indication of this then."
How many will remain as service dealers is another matter.
John Baillie at Elgin dealer Baillie Bros, Foden's dealer of the year, says optimistically: "The products will continue to be built until next summer. Get your orders in now!"
Dealers are preparing for a meeting of the network on 16 June.