BUSINESS PROFILE - Life on the Red Line

Saturday, March 17, 2018

Cummins New Zealand general manager Daniel Gallagher says the business is in a very good place right now. In 2017 the company brought around 700 automotive engines to market, with industrial, marine, power generation and mining on top of that.


Big Red's at home in the toughest workplaces.

“The company-owned footprint and our Authorised Dealer network is in very good health for the future, which is nice.”

Daniel says Cummins has been focused on a strategic review to ensure a level of sustainability so customers receive the level of service they expect well into the future.

One of the ways Cummins is looking ahead is by becoming involved with educational training bodies to keep a steady flow of workers entering the industry.

“We have spent a lot of time over the past two to three years working with UCOL and MITO and Manukau Tech, predominantly to provide a feeder for our apprenticeship programme, and it is working quite well actually.”

Cummins is keen to inject diversity into their apprenticeship programme and now have a female apprentice in every branch in New Zealand.

“We’ve also got Tracey Hockly, who is our branch manager in Auckland. Tracey has been with us for more than 15 years, she started at front reception, was thenPA to the general manager, then the administration manager, and then she went and got her HR degree, which Cummins assisted with. She was doing HR for New Zealand, and I wanted her to be the branch manager. Initially she said, ‘I don’t know anything about trucks’, and I said ‘well, we can teach you that, but you’ve got the people skills’. She’s been a big catalyst to the growth of this particular facility and she loves it. You ask her if she could ever do anything else, and she’ll say no.”

Daniel says Cummins sends their top tier apprentices who have then become technicians to address students at MITO and UCOL. He talks proudly about adult apprentice Manu Tapou.

“Manu was a security guard in Manukau and didn’t really know what he wanted to do. He started at Manukau Tech and now he goes back and talks to the students.”

The education providers identify up and coming people they think will be great in the mechanical trade, and send them to Cummins for work experience.

“I think we’ve got about a 95% success rate of turning them from work experience to apprentice. I use the term ‘growing our own’ with respect, but looking at the people who comethrough our organisation, there are people in our South Pacific leadership team who have been there for 30-plus years who started as apprentices. That’s what makes us different I think.

“The market is very tight at the moment. We’ve got some brilliant internal people – we are a hire to develop organisation – but it would be very difficult if we didn’t have that brand strength to play on. It’s not just a matter of getting an ad out on Seek and a technician or supervisor rolls up.”

Daniel says that brand strength has been tested in recent times.

“It would be remiss of me not to mention that EGR was a challenge for us in this part of the world, but we had the loyalty from our customers and the commitment from the wider organisation to do what we could to keep our customers going. I try and make as much time as possible to talk to customers and this verbatim information along with the warranty claims gave an indication of the impact that period had on our customers.

“But it’s not until you really talk to them and you understand that the truck was off the road for x days or had multiple failures that you get a bit of a sense of connection that these people have with our engines. And if it doesn’t go right – which for a period of time it didn’t – that has a very serious impact on them and their business. To be able to come back with our E5 and the X15 and go and meet people who say ‘it’s exceeding expectations, it’s great on fuel, reliability’, it’s just a nice place to be.”

When asked if the EGR issue came about because of a hurried R&D programme, Daniel says no.

“We looked at what was happening in the US at the time and we recognised there were differences in the South Pacific market, but we probably didn’t think the differences were as significant as they were. We thought we’d provided the solution our customers demanded at that point in time. Our marketing catchphrase was about ‘simplicity’, and the ADR80- 00 Signature engine with the addition of an EGR system is what we thought our customers wanted. As we discovered, it was a tough time for the whole industry and we were front and centre.”

In the future the types of engines and methods of propulsion are likely to change dramatically, but Cummins is taking a conservative approach.

“From a Cummins’ strategy perspective, a lot of thought and effort has gone into how we will attack this, and in order to be there for the next 100 years we need to have R&D in other fields. As a leader in the business we’ve spent a lot of time deliberating about this and as Srikanth Padmanabhan – the president of our Engine Business Unit – says, for the next period of our life we’re fuel agnostic. But we still think diesel will be with us for quite some time, especially in the heavy- duty sector.”

Daniel Gallagher, Cummins NZ general manager, stands with the
company's flagship on-highway heavy truck engine, the X15.

Daniel says Cummins traditionally has been the first to market with emission solutions for their customers, and in the recent past their commitment to the environment and technological investment has been focused on diesel fuel.

“We’re doing a lot of work at the moment on similar platforms that have their roots in diesel engines but they’re near zero emissions natural gas. Obviously you need an infrastructure to support that, but you can get to virtually zero emissions.

“We’ve also been doing a lot of work on electrification asrecently highlighted with the launch of the AEOS, the concept truck, which shows our electric driveline that will be ready for market in 2019 to align with our 100-year anniversary.”

Daniel says that will most likely be used initially in buses and small metro deliveries.

“We’ve also got fuel cell technology that’s under development. I realise we can’t completely hedge our bets, but we’ve spent a lot of time and a lot of money on research to ensure that we’re well positioned. We feel that our point of competitive advantage is we know the market. We’ve been at it for 100 years and that provides us with a point of difference to the disrupters like Tesla and so on.

“It has to be a very different path to market for those organisations. We feel that we know our customers and we know the industry, and while those organisations bring technology, they haven’t been here for 100 years. As we all know, the past can tell us a lot about the future.”


A line-up sporting the Cummins rainbow under their bonnets.

Top left: The T950 with black N14 iron; right: the 9870 with the latest
and greatest
in today’s red era, the X15; bottom: the W Model with

a beige NTC heart. As a testament to the product’s durability the
earlier two are still happily working away.

Daniel says the brand promise and commitment is what’s made Cummins strong in this part of the world.

“The X15 very much has its roots in the E5, but it gives us the technology to start to integrate drivetrains. The JV with Eaton is very much about further fuel efficiency gains for our customers, and we’ll do that with increased torque at lower RPMs and integrated technologies which allow more control over factors outside of the engine. The continued advance of technologies such as ADEPT, which includes features such as Smart Torque and Smart Coast, is ultimately the path to autonomous vehicles.”

Daniel says the next phase of ADEPT development will involve predictive technology that utilises GPS mapping. We will also see additional developments in the field of connected diagnostics and telematics.

“The X15 and X12 platforms provide us with the opportunity to do this. The X12 is SCR-only, it’s high pressure common rail, and it shares a lot of the architecture of its big brother.

“A lot of time, effort and investment went into getting to Euro 6 with the SCR-only Single Module, and it’s really encouraging that the technology that we’ve proven over recent years will be with us for quite some time. I think that provides our customers and our OEM partners with a level of confidence.”

New Zealand has unique topography and Daniel says Cummins engines are designed to cope with that.

“When I first arrived in New Zealand, Eric Carswell, who’s our automotive business manager, said ‘we’ll go out and we’ll jump in some trucks and you can meet some people’. And we drove the Napier-Taupo Road, and it was hard on the Jake’s, hard on the throttle, it’s just hard! And you can see why the gear works over here.”

Daniel also spent time with the team at Rotorua Forest Haulage and says that was a real eye-opener for him.

“I did some time on the million-dollar highway with the off-road trucks, and it’s every bit the road train operation that exists in Australia with the weights and the tonnage. I think the topography of the North Island is pretty unique and places some pretty unique demands on our product.

“I look at the fact that an engine that weighs 1.1 tonne and is made out of cast iron can pull 90 tonne up a slope that’s nearly 20 degrees in the horrendous rain and on gravel. It is a tortuous environment. Obviously I’ve got a Cummins bent, but any diesel engine that survives that, and the truck and the gear box and the transmission, is a testament to the engineering that goes into them.”