Jason Skoog quietly took over as general manager of Peterbilt in March after more than 20 years at Paccar, most recently as assistant general manager – Operations at Peterbilt’s sister company, Kenworth. We caught up with him recently to get his thoughts on the hot truck market, the sizzling pace of technology advances, and why little things mean a lot. (This interview has been lightly edited for clarity and length.)
HDT: You’ve been at Paccar a long time, most recently at Kenworth, where you were assistant general manager of operations before taking over at Peterbilt in March. What insights has this experience brought in your new position?
Skoog: I think it goes back to the beginning of my career. I’ve been with Paccar for 24 years now and I’ve only been in the truck business. I’ve never been in any other line of work. 16 of my 24 years was at Paccar Financial, and while I was at Paccar Financial I called on both Kenworth and Peterbilt customers and dealers. So I already had insight into the Peterbilt dealers and customers.
And that isn’t just because I worked at Kenworth; I’ve grown up in this business. I know this industry. It actually is in my blood. I have both a father who was in the business and a grandfather who also was in the truck business. I’ve been around tucks since I was 6 years old. My grandfather on mother’s side was general manager of a Kenworth dealership in western Washington. I used to go to work with him on Saturdays when I was 6 years old and run up and down the parts aisles. And if I close my eyes, I can still smell what it was like to be inside that dealership. As I graduated from college, my dad worked at Kenworth at the time, so I kind of had that insight. And that’s what really drove me to Paccar, that my grandfather was at a Kenworth dealership and my dad worked at Kenworth.
HDT: How has that time on the financial side helped you in your latest role?
Skoog: You’re often looking at financial statements and so being able to read a financial statement is very important to being a general manager; you’re obviously responsible for the profit or loss of the division. And the other thing was the exposure to customers and dealers. And the other thing to say is there are so many transactions in the truck business that rely on different types of finance structures, and so if I’m in front of a customer I know the finance business and I’m able to figure out maybe how to meet a customer’s needs on the finance side.
HDT: What has been your focus these first six-plus months at Peterbilt?
Skoog: I knew a lot of the people that are my current direct reports just having grown up in this organization; many have been with the company for a long time. So it was more of a re-introduction to them. But it’s not just about getting to know the people that directly work for me, but getting to know all the people in the Peterbilt organization as much as I can, whether it’s having lunch with a group of high potential individuals in the organization, trying to understand what they’re bringing to the table, and I’ve also spent a lot of time walking through the plant, meeting people who work in our fabulous factory here in Denton, Texas. The team here is a great team, whether it’s the manufacturing team, the sales team, all the people we have.
And then also it’s been either acquainting myself or re-acquainting myself with the Peterbilt dealer network. I had exposure to a lot of the dealers [when I was with Paccar Financial], but not every one of them. So I spent time with the Peterbilt dealer principals and understanding their businesses better and figuring out ways we can work together to really serve our customers better.
HDT: How have you seen the dealer role change in your time in the industry?
Skoog: Certainly the size of the network is the first thing that comes to mind. With our 2017 15.3% record market share and all the investments our dealers have made in the last four to five years, the dealer network has grown 100 locations in five years and will grow by another 18 this year. The number of truck sales Peterbilt has had has generated great parts and service business, which has allowed them to modernize their facilities and grow the network.
HDT: You took over the top spot at a nearly unprecedented time in truck sales. What are your projections for this year and next?
Skoog: You know, they say timing is everything. In all seriousness, Paccar has given forecast for 2018 with a range of 265 to 285 [thousand]. We’ve got three months left; I think that forecast makes sense to me. You’ve seen the level of industry orders out there. Paccar hasn’t specifically forecast anything for 2019.
HDT: What challenges and opportunities does the market present for Peterbilt? How’s the backlog looking? How are you dealing with any supplier bottlenecks?
Skoog: Our opportunity is to continue to meet our customer needs. We’ve grown our fleet business significantly in the last five years. And so that allows us to create a good base of business as we look into 2019.
I think the challenge is, as you probably see in the industry, with the level of orders that has increased backlogs. And the biggest challenge is just prioritizing the orders and putting them into the build schedule in the fairest way you can to meet all the needs of your customers who have been your customers for a long time and the new ones you’ve brought along.
We’re constantly working with our suppliers to ensure that we have the parts right next to the assembly line when we need them for production. And I think, my 24 years in this industry have taught me probably a lot of things, but one thing is there’s always going to be one or two suppliers that you are watching and working with and helping to ensure that they’re going to get what you need when you need it. And even at lower build rates you run into that scenario. It never really ends. Our materials team, our purchasing team and operations team, they do a fantastic job of managing our supply bases and making sure we have the parts on time when we need them.
HDT: Do you get a sense of how many of those new truck orders are for replacement or expansion?
Skoog: I’d like to take a step back and give you my general sense of why it’s so good. So you have a lot of things that really start with the strength of the North American economy. The second thing you have is rising oil prices, which have encouraged more of our oil and gas customers to invest in their businesses, which means buying more trucks. So the oil and gas business is very good, and Peterbilt has a very high share of oil and gas customers as our top customers. And thirdly, the construction market is very strong, and Peterbilt also has excellent vocational trucks that customers want to own. And so you have a strong economy, you have oil and gas, you have construction. And then you have the traditional over-the-road sleeper business, and that sleeper business is very strong because that’s hauling the goods that consumers are buying with consumer confidence high and GDP at higher levels than what we’ve seen in this extended recovery since the Great Recession.
The other thing I would say is the transition to e-commerce has added some trucks to the population out there. When you look at e-commerce, when you look at oil and gas, when you look at construction – those are not replacements, those are growth units. And really with the over-the-road group, you see the industry headlines about driver turnover, those customers are refreshing their fleets to attract and retain drivers.
HDT: So where are all those used trucks going?
Skoog: Used truck pricing is very good right now. When you have a supply and demand problem, typically used trucks prices would go down, but used truck prices have remained firm this year, which tells me we don’t have a supply and demand problem.
HDT: I remember a time when hot truck sales led to a huge used-truck glut.
Skoog: I’ve seen it happen before too, but I don’t see that as we sit here today.
HDT: I was at the launch of the Model 579 UltraLoft in February, shortly before you came on board; it generated a lot of interest among our online readers. Please give us an update. How has it been received by customers?
Skoog: Yes, I hear you’re up to what, 600,000 views [on YouTube] of the video you did? So the UltraLoft has been a great story for Peterbilt. You saw it in February, and we went into full production on July 2, and since that time we have taken over 7,000 orders for the 579 UltraLoft.
I’ve got two interesting stories that relates to how customers have reacted. When I was at the Mid-America truck show right around the time I was transitioning into being Peterbilt general manager, I was hanging out in the booth standing by the new UltraLoft. I saw a customer walk out of the UltraLoft who I personally knew from being in the truck business. That person did not see me standing there, and that person’s comment was, “Wow, this puts Peterbilt back in the game for fleets like mine that run a high-roof integral sleeper. And as soon as he said that, I said, “I’m glad you said that,” and he turned around and said, "Oh hi Jason, how are you?” I’m not going to tell you who it was, but it was a very big fleet in the trucking world.
Secondly, when we went into production, we had a little ceremony here in Denton and handed the keys [of the first truck off the line] to David Freymiller, one of Peterbilt’s long time customers, and in fact he celebrated 50 years in business, and he used the word “game changer” when it comes to the UltraLoft. He said the 579 UltraLoft is truly a game-changer for Peterbilt, and I truly believe that. It gives us another option in the wide breadth of trucks we offer and will give us something to meet needs of customers today. That’s not to say the previous sleeper we offered doesn’t still have a place. A lot of customers like that mid roof; they may have a lower profile trailer like a tanker or a flatbed. And we still have many thousand discrete sleepers in our backlog for 2019.
HDT: Peterbilt and other truck makers are researching advanced technologies like advanced driver assistance systems, autonomous trucks, and electric trucks. What are your thoughts on these kinds of technologies?
Skoog: Let’s talk about electric trucks first. We at Peterbilt feel there’s really three applications electric trucks are good for. It’s medium-duty; it’s drayage or port, a regional haul day cab; and they’re also good for the refuse market. Those applications that are going to drive around and be somewhere at night to recharge the batteries.
If you look at what Peterbilt is doing, by early next year we’ll have 12 Model 579 electric trucks, and about three Model 520 electric trucks, in customer hands gaining real work experience. The goal of those trucks is to have various configurations of the electric powertrain, and along the way we’re going to be learning which ones work better than others, which ones provide lower cost of ownership than others. So when the infrastructure’s ready for it, when customers are ready for it, Peterbilt’s ready for it. There’s a lot of grant funding out there for electric vehicles and we’re participating in them… by early 2019 we’ll have 15 trucks in operation, and by the end of 2019 I would expect that to double to 30 or perhaps a bit more. In addition to the 520 and 520 we’re looking at also the Model 220, the medium-duty cabover, and we’ll have six of those on the road by 2019.
HDT: So what about advanced driver safety assistance and autonomous trucks?
Skoog: Peterbilt was the first to announce Bendix Wingman fusion on our vehicles as standard, and we’ve always been a strong believer in safety. All of the recent safety equipment as you know are the building blocks toward eventual autonomous trucks in the future. I certainly am not able to predict the future, but as other people have said, there are a lot of things that have to come together for autonomous to happen. I like to thing of all these technologies as driver assistance technologies. They make a driver’s life safer, they make it easier to drive a truck, whether it’s lane departure warning, collision avoidance, the ability for a truck to stop and go in traffic – those are all available today or will be in the next six months, and it’s certainly stuff that makes a driver’s life easier on the road.
HDT: What are your next priorities moving forward?
Skoog: I think as we look forward at Peterbilt, the most important thing is continuing to develop products and options that meet and exceed customer and driver needs. And while the UltraLoft is a fantastic product, that’s a major investment – it’s practically a brand new truck. But it’s not just about the big things, It’s also about the small things we can do that make drivers life easier on the road. For instance the pass-through seat we just announced. That makes it so much easier to load, whether it’s groceries or 24 bottles of water, to get it from ground level up into the truck. It goes right under the seat, then you get up into the truck and position those items where you want them.
Another example, through a partnership with WIT, is the sleeper alert switch. You can spec it and if a driver feels like they’re in danger in the sleeper, they can turn it on and the horn honks, the lights blink.
That’s just a couple examples. I challenged the team when I first got here, what can we do, what options can we offer, that customers and drivers aren’t asking for today, but when we give that to them, they say, "How can I have ever lived without this before?"