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Premature retirement
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The ripples continue to spread from Paccar's announcement that it's considering "retiring" the Foden brand in 2006 — but for many it's still "business as usual". Brian Weatherley reports.
The comment from Ken Grindrod, sales director of Leeds-based main Foden dealer Pelican Engineering probably sums it up best: "If anything can be done to reverse the decision then we'd love it to be done," he says. "But if that decision is to be made then we've got to move on."
When Commercial Motor caught up with Grindrod he was manning Pelican's stand at the Lincoln Show complete with five new customer vehicles on it. "We'd got the stand and marquee paid for so we're here even though we're Foden we've got big Pelican flags flying too." Grindrod's 'business as usual' approach is typical of the response CM has encountered from dealers and suppliers.
"People are still buying them," he confirms. -On Saturday morning we took orders for two 6x4 double-drive tractors. Foden's saying that they'll produce vehicles until August 2006, we're still taking orders for new vehicles and will continue to do so." However, Grindrod reports that Pelican is already looking to take on a new CV sales franchise. "We'll not wait till 2006," he says, adding: "With block exemption the manufacturers cover the UK and don't have many 'free spaces' -but yes, we're looking around for a dealership to sell a different range of vehicles."
Foden, meanwhile, retains strong support. -Haulage companies who've historically bought Foden will keep buying Foden until the death wherever they can get them," reckons Grindrod. Trevor Fletcher, chairman of the Hardstaff Group which includes Nottinghambased Charnwood Truck Services, advises caution and not letting emotions runaway."! honestly and truthfully don't know what's going to happen. They've not made an official statement that production will cease, we're all reading between the lines and assuming yes, it will. But there's no recent information that says anything other than Foden is evaluating the options. It would be very wrong of any of us to have pre-conceived ideas, I'd say don't make a rushed judgement"
Increasing aftersales
Meanwhile, Fletcher admits: "We're not naive. Selling trucks is not necessarily the sexy side of the business but if you don't increase your vehicle parc you can't increase your aftersales business downstream." However, if the axe does fall Fletcher says finding anew OEM sales franchise "would be a duty I'd have to the staff in the dealership as both owner and employer -I'd do everything in my power."
And Fletcher maintains it's still too early to talk about possible compensation for Foden sales dealers. "I think that's an opportunity written into all manufacturer agreements but it will be subject to an actual announcement and we haven't had that. We're all waiting for the outcome of the evaluation there's likely to be an announcement around the middle of July."
"Obviously if someone [in Paccar] says 'we're willing to sort compensation out' it will be different for each dealer. Every dealer would want to take up any offer but there are no details published so what would it be based upon truck sales?" Fletcher's comments clearly reinforce the view that, in lieu of any definitive statement from Paccar on Foden's long-term future, right now its dealers are in limbo.
Supplier reaction
When we tracked down Caterpillar's European on-highway engine business manager Matt O'Sullivan, he was with a group of Foden operators visiting the company's massive demo site in Malaga, Spain. "Our objective is to try to maintain our relationship with these guys until we're told otherwise," he says. So far Cat's received no concrete word on Foden's fate. "Basically, they've told us the information that's on the press release," reports O'Sullivan. "A decision's been made based on what has to he done that makes sense for that organisation ."However,he admits:" Obviously, it's a risk for us as we wouldn't retain that business if the brand should go."
While Cat's Foden volumes aren't high (mainly selling its C12 engine) O'Sullivan insists: "It's significant as far as our presence in the European market is concerned the number of non-vertical manufacturers left in Europe is limited and that has an impact on our current business, Things are much the same with Cummins. However, manager for marketing and communications Steve Nendick reports that if, as predicted, Foden trucks built at Paccar's Leyland plant are replaced by much-needed Daf chassis, the blow may be cushioned as Cummins will inevitably gain some alternative business with its smaller ISBe engines in LF models. B ut the news still hurts.
"It's a shame losing a long-standing British marque and customer for over 30 years," says Nendick. "Paccar and Daf are also longstanding customers. We'll work with them and we understand their desires to meet current business pressures.We're still supplying engines to Fodenabout 400 are sold with ISMes each year. From a volume perspective Foden's a modest-sized customer but it's still an important business to us."
Meanwhile Foden customers will "still get support for years to come. It's important they understand that whatever happens. Cummins users will be looked after," added Nendick.
With a Om turnover business providing around 130 Cat-powered Foden Alpha-based dual-fuel trucks a year, Leyland-based Clean Air Power (CAP) could be forgiven for being worried by Foden's announcement. However, managing director Mike Ellithorn remains pragmatic. "In the short term we know how long`the future' is.The worst case scenario is February/March, the best is August if we didn't move on we wouldn't have a strategy."
Indeed he reports that CAP has already been talking to other OEMs about forming a new dual-fuel technology and chassis supply partnership. Interestingly enough, Ellithorn cites Daf as a strong front-runner not least as Paccar has experience with the dual-fuel Cat engine."Holland is desperate to have more gas vehicles and we could provide a left-hand-drive model," says Ellithorn.
Retiring the brand
Whatever the engine, Foden trucks won't disappear overnight if Paccar does 'retire' the brand. Mark Brown, Foden's UK contracts manager and responsible for the used division, stresses that it's only the production of Euro-4 based engines that is finishing,not FodenTrucks as a company. Its after-sales division will continue in its present form fully supported by Paccar, maintains Brown."Only the selling part of 21-dealerships will be affected after August of next year. We have a portfolio up to 2012 with contracted vehicles. Aftersales, and Paccar, will continue to fully support Foden truck users." Considering the support UK hauliers have given Foden in the past that seems only fair. •