This summer, Wabco Holdings named Jon Morrison president of its Americas business unit. He has spent 30 years in the global transportation industry and most recently served as president, North America for American Axle & Manufacturing. From 2006 to 2014, he was president and general manager of Meritor Wabco. We sat down with him to find out more about his first few months in the position.
HDT: What has been your top priority your first few months on the job?
Morrison: The very first thing for me was reconnecting with our customer base, our partners, and also industry leaders here in North America. I was in North America, then I went to Europe for a while, and came back. So I am reaching out to understand how we’re doing, how we can do better and how we can help the industry going forward. As you might expect, I’m busy working on a five-year business plan, while evaluating what I can do to help our customers and help Wabco make progress in the short term.
HDT: What are some of those industry issues Wabco can help with?
Morrison: We joined the Commercial Vehicle Safety Alliance. That to us is an important organization. Wabco supplies air disc brakes globally and we're growing that business in North America. This year we announced a relationship with Hendrickson focused on air disc brakes for trailers. One of the big issues for us is ensuring there’s a very good, widespread understanding of the benefits of air disc brakes. We feel, in supporting CVSA, we can help in the education process.
As well, I think the discussion on automated vehicles has accelerated quite a bit in North America. Sensor and brake systems are capable of supporting a path to autonomous driving, as are some of our current technologies like stability control, and collision mitigation systems like OnGuard. I don't want us to forget that they're both platforms for autonomous driving, but they also provide some very important short-term benefits for us as an industry.
HDT: Until a few years ago, many Americans only knew the Wabco name through the joint venture with Meritor. Can you give our readers a snapshot of Wabco and how it relates to the joint venture?
Morrison: Meritor Wabco has been a very important part of Wabco globally for over 20 years now. The Meritor Wabco joint venture is a partnership between Meritor and Wabco, initialized originally to bring antilock braking systems to North America. It has grown to include trailer ABS, stability control and OnGuard. So as the market has developed, the number of products has increased. More importantly, we have a strong partner in Meritor that provides us outstanding field service and the ability to connect to the aftermarket distribution network, allowing Wabco to take advantage of its scale in the marketplace to help it grow.
We launched the North American Wabco organization three years ago. Globally we operate in 38 countries with 11,000 employees and are considered a leader in commercial vehicle safety and efficiency technologies. We recently announced two more partnerships, one with Hendrickson and another with SmartDrive Systems. We also have a partnership with Cummins.
HDT: What are Wabco’s primary product offerings in North America?
Morrison: Wabco brings its full line to North America, either through Wabco directly or through partners. As far as air disc brakes and wheel end solutions like slack adjusters are concerned, we bring those in directly as Wabco. We considered these growth products, prmarily because of the braking improvements they offer, such as increased performance and cost of repair and repalcement. And when you talk about air disc brakes and the growing automation trend in the industry, braking performance will become increasingly important. We see this as really a pivotal time where the industry is recognizing the benefits. We just have to continue to work on highlighting the cost/benefit advantages and promote the brake performance advantages disc brakes bring. We think North America will continue to move to air disc brakes in the next five to 10 years.
HDT: At one time, it was thought that new reduced stopping distance requirements would drive a move to air disc brakes, but that didn’t happen, at least not as much as once expected.
Morrison: The industry remains focused on cost benefit and ROI, and the industry was able to develop a compliant solution so a wholesale move to air disc brakes wasn't required. However, we have seen steady, progressive growth in air disc brakes since then, and some OEMs are now making air disc brakes standard. I think this is a sign that OEMs recognize the improvements available though disc brakes. With higher levels of adoption and better understanding of the value proposition for both truck and trailer, we will see the adoption rate continue to grow.
HDT: What would you say are Wabco’s strengths in North America?
Morrison: I think first and foremost our strength is the connectivity to the global Wabco. Wabco is a very globally diverse company. We have a unique approach in how we relate to customers globally. As the industry becomes more globalized, we bring that into North America. We just announced an ABS brake system called mBSP, which stands for Modular Braking System Platform. MBSP is capable of being deployed in an electronic braking system as used in Europe or in an ABS environment. This approach brings powerful cost and performance synergies at the component level. It takes advantage of a more common design approach, providing fewer differences between ABS and EBS. We can draw upon those global connections.
Secondly, we have some really great partnerships with Meritor, with Cummins, and one [announced this year] with Hendrickson on the Maxx22T trailer air disc brakes. Also, our investment with SmartDrive Systems is really a link to the future.
And lastly, I’d have to say it’s the passion of Wabco's people, the passion for the customer and passion for execution, and we certainly have that in North America.
HDT: Do you feel there’s good brand recognition here of the Wabco name?
Morrison: I do. As I travel to different customers and industry events, I think Wabco is a very recognized brand. Particularly in the last few years we’ve been much more present and prevalent at industry events like the Mid-America Trucking Show. I think the value proposition is getting through and we want to continue to work on that. Globally, Wabco is the leading commercial brand for air disc brake systems.
HDT: Are there products that Wabco currently produces for other markets that might make their way to North America?
Morrison: Generally, we are bringing the full value of Wabco today into North America. One of our technologies, automated manual transmission controls, has grown quite substantially in the past couple of years. Roughly 17% of trucks in North America are being built with AMTs. That’s a product that had its origins in Europe. We provide the controls hardware and the actuation, and we see that continuing to grow rapidly.
Electronically controlled air suspensions also originated in Europe. We introduced ECAS in the U.S. in 2013, and while the adoption rate has been slower than expected, we still see the 6x2 configured trucks continuing to take advantage of it.
Lastly, I would say air disc brakes. In Europe they have been prevalent for many years. That technology is now is on a similar growth path in the U.S.
HDT: The AMT market here has exploded over the past couple of years. Did that surprise you? What do you believe is driving it? How has it affected Wabco’s operations here?
Morrison: I think it’s surprising to some. There are three things really driving the growth. One is AMT transmission technology has proven itself from a cost and shifting performance point of view. As a result, it’s a much more acceptable product in the market than it may have been in the past.
We also typically are seeing a 3% to 5% fuel economy improvement when using an AMT transmission. When we look at the current and future greenhouse gas standards, this becomes an important contributor.
And last but not least is driver retention. Many young people have never shifted anything in their lives. Moving to an automated transmission takes the entire shifting process out of the equation, allowing new drivers to be hired and drive optimally without having to be an expert at shifting a transmission. We expect AMTs to be a substantial part of the Class 8 build going forward.
HDT: There has been a lot of attention recently to collision warning and avoidance/mitigation systems, such as OnGuard and OnGuardActive. The National Transportation Safety Board has called for a mandate for such devices on all vehicles. Do you think that’s the right thing to do?
Morrison: We look at the market as the first place to drive new technology. Our focus is to make products available that the market will recognize as having high value. We don’t rely on a mandate to do that. Collision mitigation technology has been on the NTSB’s top 10 list for several years. We have sold over 90,000 systems since OnGuard was introduced in late 2007. Our customer experience has been the upper 80s in terms of collision reduction and severity reduction. That’s what we like to view as delivering the results. We’ve seen double digit growth in implementation over the last eight years and expect that to continue. Even without a mandate, the market has recognized the value of collision mitigation. The other nice thing is that full stability control is required for any collision warning system implementation, so that’s brought more stability control penetration. It’s been documented that CWS provides about a 60% desline in stability control related rollovers.
Those are the things we focus on, and certainly the NTSB has been very vocal about the benefit – but the market is also telling us that it works well.
HDT: The NTSB’s report on the Tracy Morgan crash noted that the Walmart truck had a collision avoidance system but they weren’t able to recover data from it about whether or not it was working properly in the crash. Can you talk a little bit about this issue?
Morrison: I think what we’ve seen, even with stability control, is a growing interest since the late 2000s from fleets wanting to be able to obtain critical event data from these electronic systems. In the earlier days, it started out with hard braking, and then moved on to stability control events and to the availability of more data, particularly when vehicles had a radar sensor or camera. Fleets have recognized there is information available that can be used. Wabco invested in SmartDrive, which provides driver video data analytics as well as a fairly robust dashboard of information that can be obtained from the vehicle on a real time basis. Our goal is to continue to make this kind of data available. It's robust and valuable to fleets that want access to that type of information at a deeper level.
HDT: An article late last year in Barron’s said Europe spends more than $3,000 per truck on the kind of safety and efficiency gear Wabco sells. That compares with less than $1,000 per truck on similar gear in North America and less than $300 in China and India, they said. Is that changing?
Morrison: I think it’s the summation of a lot of what we’ve talked about already. If you look at the advent of even AMT controls, the AMT has had a larger presence in Europe. As it grows in North America, that’s additional content. Air disc brakes in Europe are all the way around on a truck. The growth in air disc brakes does add [upfront] cost, but in the long run you gain improvement in performance and lower cost all around. So we're very optimistic about the increased adoption of air disc brakes.
ECAS [electronically controlled air suspensions] are standard on most truck and trailers in Europe and is growing now in North America. It adds content and quite a bit of capability. Stability control and collision mitigation systems also add more cost and more value. Statistics show there’s a payback there that continues to improve in what is a very challenging world in terms of truck costs. This is why we really try to help our customers understand the benefits of these systems.
HDT: We’ve been talking primarily about North America, but I’m assuming that as “president of the Americas” that South America is a part of your purview, as well. What can you tell us about what’s going on there?
Morrison: South America is a challenging place right now, in particular with the commodity price reduction and an adverse impact on currency, particularly in Brazil. That’s putting pressure on all companies operating there. The good news is sales and production levels seem to be aligning. We’re cautiously looking for some level of stabilization. Our plant in Campinas, Brazil, has a great team. They’re very focused on doing everything they can to continue to outperform during these very challenging times. I spend my time working with them to support them and also leverage what they bring to the table to benefit North America.
HDT: What are your long-term goals for Wabco in the future?
Morrison: I would say it’s three things. One is continuing to grow and expand the Wabco brand in North American in particular and in the Americas in general. We would do that through providing value and continuing to strengthen customer relations.
Two is technology. Wabco’s history over the past 30 years has been to bring some remarkable technology to the marketplace, so we’re going to build on our legacy of technology innovation.
Third is to deliver benchmark execution in the region. Wabco is known for its ability to execute and for its passionate people, and that’s something we will continue to focus on going forward.
We’re really executing in North America what we execute through the rest of the world.