The escalating cost of steel had manufacturers talking at the Bauma trade show held March 29-April 4, with two manufacturers, Volvo Construction Equipment and CNH, saying the situation will prompt them to temporarily raise their prices by 2 to 3 percent. “We’re feeling tremendous pressure,” said Tony Helsham, Volvo president and CEO, in announcing the company’s surcharge, which will start June 1.
They’re not the only ones. CNH announced its own steel-related, 3-percent temporary surcharge for both construction and agricultural North America products, effective May 1.
Asked whether Caterpillar also would raise prices because of the steel situation, Jim Owens, the company’s new chairman, said, “We’ll see.”
The Chinese connection
Another hot topic was China. Its explosive growth has gobbled up the lion’s share of the world’s steel and contributed to the present pricing situation.
While the North American equipment market was in the doldrums in the past two years, the sales volume of construction machinery in China during the same period went up 30 percent, according to the China Construction Machinery Association. (See chart on page 90.) And, according to the association, the country’s equipment needs are still great – its wish list includes engines, heavy-duty excavators, loaders and dozers and all-terrain cranes.
At Bauma, companies were eager to talk about their participation in this off-the-charts market.
Volvo Construction Equipment is especially bullish on its China expectations, according to Helsham. “We produced 800 excavators there in 2003 and expect to double that this year,” he said. “By the end of 2003, we had 20 dealers in China, and we’ll add five to 10 more this year.” In addition, Volvo corporate has just established a joint venture to manufacture engines in the country. Helsham said the company is exploring additional products to make in China, especially wheel loaders, “which seem the next logical development.”
Ron DeFeo, Terex chairman, announced that the Atlas excavator plant in China would carry the Terex name in the future. “It’s one of the many initiatives we have in China,” he said.
Commenting that Caterpillar entered China “after President Nixon left,” Owens said the company may expand its present excavator product manufacturing there to include motor graders and dozers. Later on, Gerald Shaheen, group president, during an editorial roundtable said, “We want to have a leadership position in China. We now have indigenous managers throughout the entire country. The 2008 Olympics in Beijing are going to be their coming out party and they’re going to be ready for it.”
Tier 3 engines
With the United State’s Tier 3 and Europe’s Stage 3a off-road emission regulations on the horizon, several manufacturers used the show to usher in their Tier 3-compliant engines and offer a peek into future technologies.
John Deere Power Systems chose two sets of technologies to address Tier 3 regulations, said R. Ramshankar, manager, worldwide marketing. “We had to be sensitive to our low-cost markets as well as to those where performance is much more critical than cost, all without a significant sacrifice in torque rise,” he said.
For performance customers, Deere offers its PowerTech Plus engines. “There’s no fuel economy degradation, and it offers both high torque rise and high power output,” Ramshankar said. Deere uses cooled exhaust gas recirculation and a variable geometry turbocharger (VGT), which helps drive the EGR.
Cat introduced six new Tier 3-compliant engines, which joined the already-launched C18 to form a family of off-highway engines ranging from 119 to 785 horsepower. All feature Cat’s Acert technology; three additional engines will be launched later this year. Among other products, the new off-highway engines will appear in Caterpillar’s T Series dozers – D8T, D9T and D10T – due out in October.
Cat’s sister company Perkins Engines used a 3-D multimedia presentation to introduce its Tier 3 engines. The 4- and 6-cylinder, 1100D Series engines come in both mechanical and electronic versions, with the latter using Acert technology. With Acert, the engines feature major boosts in engine performance with up to 43 percent more power and 51 percent more torque available across the range than previous engines.
While retaining the same name as the current engine, Cummin’s all-new QSB Industrial engine platform is a clean sheet design to meet Tier 3 regulations. A top-rated 170 horsepower at 2,500 rpm output for the four-cylinder, 16-valve version represents a 30-percent increase over the current engine. Cummins said its Tier 3 solutions will carry the company forward until 2015 without any major changes.
JCB will begin producing its first engines by the end of this year, although the company has made no announcement regarding which JCB products will first feature the new engines. “This will give us the ability to manufacture the complete power train,” says John Patterson, group chief executive. The engines – with initial outputs between 72 and 125 horsepower – will be produced by the newly formed JCB Power Systems.
Since Volvo’s Tier 3-compliant V-ACT engines (acronym for Volvo Advanced Combustion Technology) will allow power and torque to be available over a broader engine speed range, the company says it will be able to better tailor power characteristics to the specific application needs of its equipment. Although Volvo is not giving the details at this point, it did say the company had passed on using external aftertreatment, exhaust gas recirculation or variable geometry turbochargers. The new engines will, however, feature high-pressure fuel injectors and the company’s engine management system.
Here’s a rundown of what manufacturers were touting on the show floor:
In North America, the company began operating as Atlas Construction Machines this past October, based near Cleveland, Ohio, said Des Jarvis, Atlas product sales manager, during an interview at the company’s Bauma stand. Previously, the company’s product was distributed in North America by its Hudson, Ohio, dealer Coyote Loader Sales and branded Coyote. Coyote Loader Sales will continue to sell the Coyote machines and Atlas will sell the Atlas-branded loaders through a new distribution network.
Atlas showcased several new loaders, including the AR 85, which was also introduced for North America.
Bomag usually announces its products in Europe about 18 months before they appear in North America. One exception will be its new generation of reversible vibratory plates, which will be available here this summer. The plates will feature a fully redesigned vibration system and robust engine hood offering complete protection from impact damage.
Cat is on track to reach its long-stated goal of $30 billion by the end of this decade, said Owens. “In fact, if global growth remains at 3 percent and above, we’ll probably achieve that goal closer to 2006,” he said.
New products included:
· The 325 UHD (ultra high demolition) excavator, with an operating weight of 34 to 37 metric tons.
· SystemOne Undercarriage offering reduced owning and operating costs for dozers and track loaders (for more on this, see the Best Practices article on page 25).
CNH had five brands on display, including the three marketed in North America: Case, New Holland and Kobelco. In the middle of what it calls a “massive project of innovation and product renewal,” the company said by the end of 2004, 80 percent of its construction equipment revenues would be derived from the sale of new or upgraded equipment.
New introductions that can also be seen in North America include:
· Optional pilot controls on New Holland backhoe loaders, featuring integrated and adjustable ergonomic hand supports for comfortable operation.
· New Holland’s EH35SR and EH45SR compact excavators.
Celebrating the production of its 500,000th backhoe, JCB also announced five new machines that will make their way to the North American market. These include:
· A 20-horsepower Mini Backhoe, with a dig depth of 8 feet, 2 inches.
· Three new telescopic handlers, including two compact models, the 524-50 and 527-55, plus the full size 535-140.
· The JS130 excavator, featuring auto mode.
On home ground, Liebherr had a massive presence, with a 107,000-plus-square-foot exhibit that showcased more than 70 products. World premier products included:
· The T 282 B diesel-electronic mining truck, which offers a payload increase of 36 metric tons over its predecessor, the T 282.
· Five new “stereo” loaders: L 506, L507, L508, L509 and L510, with power ranging from 58 to 79 horsepower.
The Manitowoc Crane Group introduced 11 new cranes at Bauma, and offered the first time joint showing of all three of the company’s crane brands – Manitowoc, Grove and Potain. The company also used the show to announce its sale of Delta Manlift, a French vertical-mast lift manufacturer, to JLG. New products include three new Grove units:
· GMK3055, a three-axle, 60-ton, long-boom, all-terrain unit.
· GMK3055-1, which features a full-power boom and a 55-ton capacity.
· The 90-ton RT890E rough-terrain crane, which completes the company’s E-Series RT range.
“Terex is introducing more products here than anyone else,” said DeFeo. “Because of this, I take issue with
the opinion that we don’t invest in research and development.”
Some of those introductions include:
· Three models – TA25, TA27 and TA30 – of Generation 7 articulated dump trucks.
· Three backhoe upgrades, with the 820 replacing the 760, the 860SX replacing the 860SE and the 970 Elite replacing the 960 Elite.
· Six Terex Demag cranes, including four all-terrain cranes, one 350-metric-ton crawler crane and two city-class cranes.
DeFeo also announced a new brand/logo system “to build the Terex brand in a cohesive way” in the wake of the company’s many acquisitions. “We are a quilt of brands,” he said, “and we want to be a blanket.”
The new three-logo system will include the main Terex brand logo, a Terex transition brand logo – which teams the Terex name with the brand that the company has acquired – and a “legacy brand logo,” in which the acquired logo will take precedence with “A Terex Company” listed underneath the brand. The legacy brand logo will apply only to the Genie, Powerscreen and Bid-Well brands.
“There is a clear turnaround in North America and we expect a number of years of good growth,” Helsham said. Volvo Construction Equipment’s 2003 sales were 10 percent more than 2002 and its machine volume rose 23 percent over 2002, with more than 24,300 machines sold.
Commenting on Volvo’s 2003 acquisition of eastern U.S. dealer LB Smith, Helsham said the dealership was “stabilized and profitable and we’re now identifying people to acquire pieces of the company to put it back into private hands.”
Volvo introductions at the show included:
· The ECR88 8-ton, mid-range excavator featuring a compact rear counterweight that allows the unit to turn within the width of its track.
· L50E wheel loader, featuring a greased-for-life rear axle cradle.
· The EC45 Pro 37-horsepower compact excavator with a new bucket interface that allows it to accommodate a 30-percent larger bucket.
Volvo’s line of soil compactors will be launched at next year’s ConExpo-Con/Agg in Las Vegas.
ZF introduced several transmissions at Bauma, including:
· HL 250, HL 270 and HL 290 models for excavators up to 25 metric tons.
· ZF-Ergopower transmission series for wheel loaders.
· Rigid or steered rear axles MT-2075/2085 and MS 2075 for backhoes.