Detroit has long been known for the “Big Three”. As we look across the early 21st Century Class 8 landscape here in North America, we find “The Final Four”. Daimler Trucks North America (DTNA), Navistar, PACCAR, and Volvo Trucks North America (VTNA) supply 99% of the heavy duty trucks in the NAFTA region.
Gone are Ford, GMC and White. Western Star is a brand, not a company. Autocar focuses exclusively on refuse vehicles. Marmon has gone by the wayside, as has Diamond Reo. Consolidation, past, present and future, would be a good future topic for this blog. But our question today is “How did the West Coast become the headquarters location for half the North American heavy duty truck business?”.
Think about it. The heart and soul of the automotive industry is east of the Mississippi, dominated by OEM Vehicle and Tier 1 companies in Michigan, Ohio, and Indiana. How is it that PACCAR in Bellevue Washington, and DTNA in Portland Oregon, have achieved their many decades of industry leadership and business success?
(Before diving into this further, yes, I do realize that DTNA moved their corporate headquarters to Fort Mill South Carolina. Ask any DTNA employee and they’ll tell you the center of gravity remains on Swan Island just outside downtown Portland Oregon. For now.)
The short answer to the question lies in a combination of opportunity, innovation, and strong business leadership. These companies were able to capitalize on a regional market and use it as the cornerstone for expansion. PACCAR founded their business around severe-service applications like the logging industry, where the rugged durability of the product established their reputation for quality. In the case of Freightliner, it was a lightweight design that spun out of the creative minds at Consolidated Freightways, a west-coast fleet that couldn’t convince any of the existing truck builders to consider innovations that would optimize vehicles for the mountainous terrain.
From there the two companies continued to broaden their product line and dealer network until both could boast a national and eventually international presence. This took the efforts of great people and strong leaders, and the full story requires a book, not a few paragraphs.
Perhaps the best way to summarize their success, relative to all those other companies and brands mentioned at the outset, is to say that both companies have found ways to offer compelling value to an extremely demanding market. Whether you are considering the owner operator who makes the truck his residence for 300+ days each year, or the fleet that operates thousands of similar power units around the clock, these two companies have risen to the top by providing what the customer wants. At the same time, they’ve taken care of their employees and their stockholders. Combined, these are the three legs of the business stool – no company survives without balancing all three.
The success of PACCAR and Freightliner make a great story, and I hope you take the time to read about these organizations in greater detail.
