Roger Nielsen started his career at Daimler Trucks North America in 1986 as a Freightliner manufacturing engineer responsible for wiring harness testing.
“I started off as an engineer in the electric shop, putting together the systems that finally brought continuity testing of new wiring harnesses,” Nielsen said in a wide-ranging Zoom interview Feb. 19. “Until I showed up, the only way they tested a wiring harness was they started up the truck at the end of the [assembly] line and if all the lights turned on, I guess the harness was good.”
Nielsen said even today, he could probably figure out a electrical problem in a Freightliner FLD or older truck. “I still know all the circuit numbers.”
“We went through some exciting times back then. We had new technology. We moved from pneumatic wipers to electric wipers there in the ‘80s.”
Now, Nielsen is retiring April 30 after a 35-year career at Daimler, including the last four as its president and CEO. The “new technology” has changed a whole lot in that time.
Under Nielsen’s leadership, DTNA started several customer trials of battery-electric trucks with the Freightliner eCascadia and eM2 and launched the Thomas Built Buses Jouley electric school bus. In addition, he renewed the Western Star product lineup and the vocational truck business. And autonomous trucks are on the horizon.
"This next decade, the transformation is going to go so fast."
He’ll be replaced by John O’Leary, who’s coming back from a stint as the chief transformation officer for Mercedes-Benz Trucks in Germany. Previously, he also served as president and CEO of Thomas Built Buses, senior vice president for DTNA’s aftermarket business, and chief financial officer of DTNA.
We talked to Nielsen about the upcoming transition, the challenges and changes in the trucking industry, and a look back over his career. (This interview has been lightly edited for length and clarity.)
Q: It's a pretty exciting time for the industry and for Daimler. Why retire now?
A: I wish I was 25 again, because you're right. It's an exciting time. This has been the plan since I took the job four years ago. I turned 60 in January, and I get my 35 years of service in April. And so all those little milestones come together, and I said, I'm still young enough to take a halftime break. You know, my grandmother will be 103 on April 3, so I might have a long life yet in front of me and I want to make sure that I take advantage of it now.
But you're right, there's a lot of exciting things going on. This next decade, the transformation is going to go so fast. And the technology is coming on so fast. I still have a passion for battery electric. I still have a passion for autonomous. I still have a passion for trucking. Believe me ... I won't be walking away completely.
Q: So do you have a bead on exactly what that next stage is going to be? Are you looking to pick up a dealership or do something completely different in trucking?
A: You know, there was a rumor already that I was buying all the dealerships here in the Carolinas and Virginia, but I forgot to call the guy and tell them it's false. [laughs] No, the dealership business is running great. We have some great dealers and honestly a lot of them have some great succession plans, [but I have] no interest at all.
My passion is really is the technologies – battery electric, hydrogen fuel cell, autonomous. And the challenges facing this industry, from what do we have to do in Washington, D.C., and in each of the states’ legislative houses, to get people convinced that autonomous will work, and putting the infrastructure together for battery electric and hydrogen. And then all the challenges that come with transforming the business model of a trucking company to take advantage of all those technologies.
Q: What do you think of the way the DOT is approaching autonomous vehicle development at this stage? They're letting the OEMs and the technology people kind of take a lead in this before they step in and start making rules.
A: Honestly, we are so far away from being able to drive autonomously, completely without a human inside the cabin, that it would be really premature to even imagine what regulations are required. And it's hard to start regulating things that are normally in the realm of what a regulator would look at. We saw the same thing with [emissions regulations], as they learn what's possible, they start imagining ways to regulate it to a tighter standard.
At the moment, when we talk to regulators about autonomous, we're basically saying, ‘Hey, we’ve got a lot of things yet to invent. There's still so many discussions to have about first making it technically feasible. And secondly, do we need smart infrastructure to make it work? What's the operating model? All the businesses would have to change along the way to make all that work.
You can't get too far ahead with regulatory action. And I think we've seen that that can go bad. For example, [the early 2000s] emission standards, they started regulating way beyond what's technically feasible. So I think for now, they have some guidelines out there that are discussed occasionally. And when we are ready – and long before we're ready, frankly – the regulatory agencies will get involved, I'm sure.
Q: You mentioned transformation a couple times. Your successor, John O’Leary, is coming from a role as chief transformation officer for Mercedes-Benz Trucks, and we had the recent announcement that Daimler Trucks is splitting from the Mercedes automotive business. With O’Leary having a background as CFO, is the timing particularly right for someone with that kind of background?
A: John will tell you he left the finance world back in 2000. When we started the turnaround at Freightliner, in the late ‘90s, U.S. truck residuals were much higher than the actual market value of the vehicles (let's leave it at that; you all know that story.)
I'll tell you a story about when I first met him in 2001. We met at this little round table. We had a McKinsey consultant in between us. And we yelled and cussed at each other so loud because I absolutely didn't want to work with him on the [turnaround] project. I said, 'Man, I just got appointed to run American LeFrance and Orion Bus and Thomasville Bus and FCCC (Freightliner Custom Chassis Corp.) [as president, Specialty Vehicles Group].' And the last thing I wanted to do was move back from North Carolina to Portland to work on the turnaround on the company.
But John convinced me to join him. When we got the company turned around in 2003 or so, John went on to replace John Thomas III at Thomasville Bus. We'd bought Thomasville bus five years before, and John was the first non-family member to run that company in what, 80 years. And so he ran Thomasville bus for seven years, the full scope of the business from product development through sales and marketing and service. And so he is truly a businessman in this industry.
And he left there when and took over aftermarket and was my aftermarket partner for four or five years, and then he returned in 2012 to become CFO. Truly, he's seen all aspects of the business, and now he's been in Europe since the middle of 2020 running Mercedes Benz trucks in the absence of the retired CEO that left mid-year. And he's been running that as well as putting together their own transformation/turnaround program for Mercedes Benz trucks. So he's finishing up that assignment; they had a great fourth quarter 2020 and they got some great momentum going there. And so we're really proud of what he's been able to achieve there. So yeah, he's a trucker through and through. He's not a finance guy.
Q: So what do you think will be his biggest challenge?
A. He has three challenges right now.
First, the 2020 demand is exceeding the capabilities of the supply chain. And we have world class supply chain experts in our group, but it is a battle every morning, to make sure by nightfall that the factories are completely supplied for the next day. So he has that challenge. On top of that challenge of supply chain, the demand in the marketplace for new trucks right now is much higher than this industry is able to supply. And so we're all going through that challenge of how to respond to customers.
Challenge two, as we are well into the launch of the new Western Star 49X, you've heard our aspirations in the vocational truck market to get ourselves pushed up to not only number one in on-highway, but number one in vocational, and John’s job now is to make that a success.
Challenge three is to bring battery-electric vehicles to series production, which will happen towards … yeah, I can’t give out dates. In battery electric, we have gen one on the road right now in the Innovation Fleet, you've seen the 38 vehicles we have running around. We have gen two now, which is in its final trials, and in prep for series production. And we have gen three in development.
"He's got that challenge to really make battery-electric and diesel equivalent as far as total cost of ownership."
And when we get to Gen three, he has to have a solution which removes the obstacles of cost, where a customer can truly look at his purchase options, diesel versus electric, and make a choice based on what his operating model needs to be and what his desires are for powertrain – without having to lean on incentive grants for purchase price support. So he's got that challenge to really make battery electric and diesel equivalent as far as a total cost of ownership.
With those three in front of him, he'll be busy for sure.
Q: Roger, you mentioned about in the past dealing with the turnaround and the challenges with the used truck market. What have been some of the biggest challenges of your career?
A: The biggest challenges we had was facing the large market success and being able to grow quick enough to respond to the market demands.
You know, when I started with the company, we were in the low teens in market share. I always said we were seventh out of four brands – I think only Ford or GM were below us in Class 8 market share. And we started growing the company, and I tell you we were working 120 hours a week just to bring the capacity on board.
I remember when I turned up at the MAN city bus factory in Cleveland to buy it. I wasn't even 30 years old, and I was across the table from another guy who was 30 years old to negotiate the takeover and then the expansion of that Cleveland plant. And then through the 90s we did all those expansions with fire trucks and ambulances – with very limited success, let's call it – and then Freightliner Custom Chassis.
I still remember on Martin Luther King Day in 1995, I got the phone call that said hey, can you go down to Gaffney and take a look at what Oshkosh has for sale, see if we should buy it. We went down there, the lights were off, they had the day off in honor of Dr. King's birthday. And in eight hours, we decided to buy the business. And that was the best deal we ever made in my whole career here. [The Oshkosh chassis division became Freightliner Custom Chassis Corp.] But then we were faced with [handling] the growth, and then Thomas Built [Buses] came, Sterling came.
But if anyone asks, 'What's the highlight of your career,' it would actually be the selection and construction of the Saltillo plant in Mexico. To truly to put together a world-benchmark factory in the middle of the Mexican desert to supply the new Cascadia launch was a great achievement from the whole team, and something I really enjoyed.
But then you know, as you go through that whole time, always underlying all that was the diesel exhaust emission standards, and this ever-tightening noose on the output of both NOx and particulate matter. That is probably the biggest technical challenge we had. And you saw what we did in 2007. We took that development risk to put [selective catalytic reduction] on the road. And there were some naysayers out there. And it was definitely a bet that could have gone a different way.
But now that we're really past the tough diesel exhaust emission standards changes, and we have the [greenhouse gas emissions regulations] completely within our grasp of achieving all the different steps between now and 2027, it's really back to the new technologies.
What are we doing with battery electric? What are we doing to satisfy our customers’ needs to have connected trucks? What are we doing to set the stage for hydrogen fuel cells and eventually autonomous? So, challenges everywhere, and the challenge is where to put your attention – because, boy, I'm an engineer, I could dive deep into every one of those topics.
Q: Roger, we're doing this as a Zoom call, instead of in person. Obviously a lot changed with COVID-19. Do you think we're getting back to that point where we can expect to see a lot more in-person shows and that kind of thing come coming in the fall?
A: Yeah, that’s the question: What will be the coming out ball for the commercial vehicle industry in 2021? The North American Commercial Vehicle Show? The American Trucking Associations Management Conference in October, which for us is a big chance for us to thank our customers?
I believe we're going to get back to there. I watch the daily vaccination rates just because I'm a statistics guy. I definitely believe we're on the trend, where cases are going down, and vaccination is going up, that we could be back face to face.
But it has changed how we interact. You know, we used to get on a jet and fly and visit 15 customers in five days, and come home on a Friday night just dead to the world. And I think I've talked to 15 customers in the last 24 hours on Zoom. We appreciate the ability to interact. They appreciate the ability to for us not to waste their time. And we have great conversations. After you've done a Zoom call with the customer every week for what, going on 48 weeks now, this is how we do business. And I can't imagine that changing. I can't imagine that changing. It actually has allowed us to grow customer relationships tighter and better than ever imagined before. I enjoy it to one extent, but I miss the one on one contact with people.
Q: Roger, when we spoke to you last year, you had mentioned that DTNA was going to become more involved in social justice issues. It sounded like that was something that was important to you. Do you expect that effort to continue under the new leadership?
A: Oh, absolutely. We established Dr. King's birthday as a national day service for our employees, both in the shop as well as in the white collar side. And it was tough this year [with pandemic restrictions], but we were able to organize service activities for anybody who wanted to participate. And that really has brought a cultural change that, [people think] hey, this company is serious about this, they're gonna pay us to do this and help us get organized. And through those activities, we found our staff get excited about various organizations that we introduced them to, and they are continuing to serve them going forward. So we think through the employee action that we've helped initiate, we can have an impact on society.
You know, being in Portland, Oregon, for our headquarters, which has had more than its share of strife in the past nine months or so, it really is important for our employees to take this on. We feel, being a large employer in Portland, we feel it's our responsibility to help make the community better and stronger.
Q: Another time you just stopped things at the company was to address the customer experience.
A: We had a customer tell us, you know, your people are great, your products are great, but your processes suck and we don't like doing business with you. That’s a tough message to get, and it was a gut punch when the customer told me that.
But they were kind enough to introduce us to some people they worked with to change the culture inside their company. And with that, we started this whole customer experience adventure. We shut down the company for a day in the fall of 2017. And we've done that now, every year since, to give a chance for every employee to sit and listen to dealers and customers tell us how it is to do business with us. And I truly believe that if we are enjoyable to do business with – of course, underlying that with great products that serve their needs – but if we're enjoyable to do business with, it's yet one more step towards a higher level of loyalty with customers.
Our employees are getting it. And we've delegated to them the responsibility to make customers happy. And the old guys in Portland say it's kind of like Nordstrom [which is famous for its customer service]. And that's kind of our people now. Hey, if a customer comes in with a problem, let's solve it. And we're going to solve your problem and take it on with the same urgency that the customer sees it. And I think we'll keep that going. John O'Leary is a big believer in that.
I had a guy here two weeks ago from a little trucking company who was having difficulties seeing his truck data on our Detroit Connect portal. And so he sends me a note on LinkedIn and said, 'Hey, Roger, can you get this fixed for me?' You know what, we got it fixed. And now he's my best friend.
I carry around some Freightliner hats in my car, and whenever I go to get fuel, I usually fill up a truck stops because I just like to see what's going on. One time, I saw this guy sitting there [in his truck], and so I jumped up on the fuel tank steps, and I’m getting ready to hand him a hat and I look in the window and he's got his whole dash apart in his lap, looking for an air leak. He was a little gruff, 'What do you want?' And I said, 'Well, I'm from Freightliner and I came over to say hello, and thank you for driving one of our trucks.' And he goes, 'Can you help me fix my problem?' And I asked him what it was, and it was an easy problem to fix. It was just an air leak in the dash. And so I helped him decipher it and we had him back on the road in about 10 minutes.
Q: Did you ever tell him who you were?
A: Nope, I never told him. I just gave him a hat and thanked him.
Equipment Editor Jim Park contributed to this story