Last summer, Navistar named longtime Paccar executive Jeff Sass as senior vice president of North America truck sales and marketing.
Sass is not the first Paccar executive to see opportunity in Navistar’s recent struggles. Two years earlier, Navistar named Bill Kozek as president of its North American Truck and Parts business.
We caught up with Sass at the American Trucking Associations Management Conference & Exhibition last month to talk about his first few months on the job and what’s in store for the future.
HDT: I’m sure I’m not the first person who has asked this, but why go to Navistar? It’s a company that has been facing some serious challenges the past few years.
Sass: There are probably 39 different reasons. The top three were, first and foremost, a chance to work with Bill again. We met in ’99; he was my boss when we were both in dealer development at Kenworth and have been friends for 15 plus years. The opportunity to go work for him again has been fantastic.
The second reason is I see a lot of potential at International. They obviously had a great product in the past. They had a little bit of a hiccup, so to speak, but have turned the corner and are putting out the best quality truck in their history. I’m excited about our dealer network, about the nimble approach with which we go to market. With my background and what I can bring, I think I can help them out.
The final thing was, having been at Peterbilt, I got to know Rusty Rush [of Rush Truck Centers] and Jeff Hunter [of Hunter Truck Sales], and I saw them investing in the brand, and it gave me a lot of confidence, because they are smart business people.
HDT: What do you mean by the nimble approach to doing business?
Sass: Like with the OnCommand Connection, we’re going to be first to market with over-the-air engine reprogramming. We have already gone through our first two phases of testing and are looking to be the tech leader in that space. It’s a quality product and that’s something that will really benefit our customers.
That’s what I see first and foremost in every decision I’ve been involved in so far – it’s all about the customer. We truly are a customer-centric company, where I think some of the vertically integrated ones are more product oriented. We want to find out what our costumers need and find the product that meet their needs.
Over-the-air reprogramming was announced a few weeks ago. The target is the first quarter of 2016. Two things we have to have in order to go to market, though: It has to have security and incredible support. We don’t want a 12-year-old in Nebraska reprogramming trucks. When a customer has to get their engine reprogrammed today they take it to a dealer or distributor, and if there happens to be a glitch, there’s a technician dealing with it. We have to have 24/7/365 technical support in order to respond to any possible problems. The last thing we want is for a fleet not to be able to start their trucks the next day if it wipes their ECM.
HDT: What have been your top priorities your first few months on the job?
Sass: To go out and meet dealers and customers. I have been on the road 94% of my time to familiarize myself with the dealer network as well as trying to drum up some truck sales.
HDT: What are you hearing from them?
Sass: The customers have been really impressed with the new product we’re putting out. Obviously we had some hiccups with the MaxxForce product, but the SCR [selective catalytic reduction] products have been really performing — both the Cummins and our own N13. We are getting really positive reviews. We have some ground to make up with some of the relationships we hurt with our original EGR [exhaust gas reduction] strategy, but I think those will be repaired as we continue to show performance with the new product.
The quality of truck we’re putting out today is the best International has had in their history. The fuel economy is fantastic, drivers love them, the room, they’re spacious, the instrument panel is very intuitive, things are where they should be, and it’s a great truck.
We’re not getting every deal but we’re getting our fair share. Class 8 order intake over the last three months has been second best in the industry. In July we beat [industry market share leader] Freightliner. Medium-duty intake has also been very strong; we actually beat Freightliner in medium-duty last month and continue to see growth. Bus orders have been good as well, so we’re really excited about where the product has taken us and for dealers to take care of customers.
One of the things we learned with MaxxForce is the true capacity of what our network can do. Today with fewer problems and fewer MaxxForces on the road we get to see how quickly our dealers can react. What we call dwell time, the amount of time from opening an order to closing it out, has gone down 30% in the last year.
HDT: That seems to be what we’re hearing: It’s all about uptime.
Sass: I was with a large fleet recently and they asked me, ‘What do you think cost of ownership means to us?’ They said cost of ownership is all about driver retention. And the number one thing that retains drivers is keeping the truck on the road so they can get paid. We want to provide a truck that is reliable and high quality and the drivers like to drive.
HDT: But when it does break down to get it in and out quickly.
Sass: Right. You don’t want it to sit two days to replace an alternator. You get it in and triage it… so the fleet can plan. It’s not just about getting the trucks in and out fast, it’s also about getting the information to the fleet — and then meeting those expectations. And that’s what we’ve been working on with the dealers.
HDT: Do you have an official program aimed at improving the customer experience at dealers?
Sass: We launched the Accelerate Service program, part of International Edge [initiatives to focus on ease of doing business and enhanced customer uptime] a year ago, but we’re taking it to the next step in the next year. We are going to start grading our dealers on things such as parts availability and dwell time and give them a diamond rating and advertise the ones that are the best. So the fleets know we’ve got a five diamond International dealer just right here. Our goal is to make sure [dealers] all get there. A little competition never hurt.
HDT: What’s the outlook for the industry and for Navistar for the rest of 2015 and for 2016 as far as truck sales?
Sass: I think it’s going to be strong. I think we’ve had a very good last couple of years in the Class 8 market; it probably won’t be as high in the on-highway sector, maybe down 5%, and the vocational sector will be flat to up a little bit and we feel medium will be up.
We believe 2016 will be a strong year in truck sales and we’re excited about it. We’ve gained a couple points of share in medium this year, we plan to gain a couple more points in medium. We think we’ll see an uptick in market share for on-highway as well. And with the introduction of our new vocational product I think we’ll see growth there. I see nothing but upside for Navistar in 2016.
HDT: So tell us more about this new vocational product.
Sass: We’ll unveil it in February at World of Concrete in Las Vegas and the first trucks will come off the line in April. This will replace the PayStar and will be referred to as the HX series, followed by a three-digit code signifying whether it's a long hood, short hood, set-forward or set-back axle.
HDT: Why the move to a different name?
Sass: It’s just time. We have a chance for rebranding and an opportunity to provide the customer with a new experience with Navistar in their International products.
HDT: The proposed greenhouse gas standards seem to be generating quite a bit of discussion, with environmental groups pushing for earlier implementation, California talking about adding stricter NOx standards, and concern expressed by OEs in their comments on some issues such as the testing protocols. What are your thoughts?
Sass: The first set of GHG regulations put in a couple years back really seemed to help both the manufacturers and the customers. We are hopeful as the EPA moves forward that they will continue to look at the type of implementation that will aid both the owners and manufacturers. Whatever the final rule Navistar will certainly comply with it.
HDT: Navistar has had some pretty big announcements this year, such as the collaboration with GM on Class 4 and 5 trucks. Tell us a little more about that.
Sass: We’re excited about it. We’ll have a Class 4/5 product now. We’re going through styling reviews with the GM people. It’s been a great collaboration working with them. It’s replacing the TerraStar and will be branded the CV for commercial vehicle. They will brand theirs under Chevy. There will be some differences in the styling; we will have our International version. We appeal to different customers for the most part. We think there’s a market for both of us to go forward.
The Blue Diamond program [with Ford] is gone and we’re off to our next one to continue to supply the right products for customers’ needs.
HDT: Who do you see as the customers for these trucks?
Sass: A lot of our heavy-duty customers have some light-duty needs. We’re a big supplier in the lease/rental sector, and I see them having some use for that; maybe landscapers that have a few other trucks. That way they can have a one-stop shop for service and parts.
HDT: Another recent announcement was that you will be offering the Allison TC10 automatic transmission coupled with the Cummins ISX15 on the ProStar. You previously were offering it with your own 13-liter engine in the ProStar and TranStar, right? How’s that been received?
Sass: It’s an automatic transmission, and it will appeal to a certain customer base for that smoothness of shifting and the way it operates. Obviously we’re also very good partners with Eaton and it also is a good product.
That gets back to our whole open integration philosophy. We partner with the experts in transmissions, like Allison and Eaton, with the experts in engines like Cummins. That’s the key to how we’re going to go to market with the best component manufacturers. We don’t have to be experts on everything; we just have to be experts on our truck and the integration with the supplier partners.
HDT: We learned here in Philly that no truck makers will be exhibiting at the Mid-America Trucking Show in 2016. Navistar had announced its decision to skip next year’s show earlier this year. Can you tell us a little more about that decision? What will you be doing instead?
Sass: We have plans for two big customer events that will launch new products next year, the HX vocational at Word of Concrete, and it’s our plan to have an event for the LT series replacement for the ProStar in the late summer time frame. It will be with the new configurations for 2017 GHG.
These will be big customer events where we can be more focused on customers we want to bring in, rather than hoping they come to an event that has everybody. It will be a more focused process. And with our proving grounds in New Carlisle [Ind.], we’ll have events there where we can get customers to come out and drive our trucks.
HDT: One of the reasons cited by some manufacturers to skip next year’s MATS is a desire to get on an every other year schedule with IAA, which speaks to the increasingly global nature of the industry. With your background with Paccar and its international operation DAF, where do you see that globalization heading?
Sass: It’s a small world. There are customers and suppliers all across the world that every OE is using these days, and the collaboration you can see between them … the Euro 6 and EPA 2010 regulations finally got together so we were able to commonize on aftertreatment and that kind of thing.
You see it in every walk of life, not just in trucking. It’s a very small world and we get products supplied to us from all over. Globalization’s happening whether we want it to or not. The way information is shared; when I was in college I would write a letter to my parents. My kids communicate with me in 140 characters over a text. And that makes the world smaller as well.
HDT: What are your goals for the future?
Sass: I want to return International to be a dominant player in the Class 8, medium-duty and school bus markets. I want to help restore profitability to the company, and I want to make sure our customers are served in a manner that provides them opportunity to make money and operate better as well.
HDT: What else would you like our readers to know?
Sass: I really am excited about the opportunity. I believe the darkest days are behind us and we offer a product the customers will recognize as being top-of-the-line and the best option on the market for them to accomplish their goals in trucking.