Daimler AG said Friday it has invested $475 million and created 330 new jobs at the company’s factory on the edge of Detroit to launch production of a new line of automatic transmissions specifically designed for heavy-duty trucks and a new engine for smaller, medium-duty commercial vehicles.
Wolfgang Bernhard, head of Daimler Trucks, said the project at the Detroit Diesel factory in the city gives Daimler the ability to extend its leadership in the North American market and lower the costs for its customers at the same time.
Traditionally, buyers of heavy-duty trucks in the U.S. have ordered the cab and chassis from one manufacturer, the engine from another maker, the transmission from a third and the axle from a fourth company. With the expansion in Detroit, which already builds truck engines and axles, Daimler will have the opportunity to offer customers a complete unit.
The introduction of the new diesel engine designed for medium-duty commercial vehicles will also enable Daimler to offer its own engine to customers, who purchase trucks from its Freightliner brand.
Until now, customers looking for a diesel engine in their medium-duty Freightliner vehicle ordered the motor from Cummins Engine of Columbus, Indiana.
“Now they can get the engine from us,” said Bernhard, who added the overall goals are to standardize production across the globe.
He said the idea is to bring the same techniques used in the passenger-car business to the heavy-truck business to help lower piece costs by increasing the unit volumes. “The passenger car guys have been doing this for years,” said Bernhard.
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In addition, the automatic transmission will be a first in the heavy truck business in the U.S. While virtually all the passenger car drivers in the U.S. purchase automatic transmissions, trucks in same market still use manual transmissions, which require a great deal of skill to operate, Bernhard noted.
Initially, Daimler plans to import the medium-duty diesel engines from Germany.
“Detroit medium duty engines will provide what no other manufacturer in North America can offer – a total vehicle solution that matches Daimler’s global engineering prowess with the most complete lineup bar none in the industry,” said Martin Daum, president and CEO, Daimler Trucks North America.
“I am pleased to announce that select Daimler Truck North America vehicles will be available with medium-duty power by the end of 2016, and full production will take place in Detroit by the end of 2018.”
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The new automatic transmission will make large heavy-duty trucks easier to drive and should make it easier to recruit new drivers.
Bernhard, who previously worked in Detroit as a top executive for the old DaimlerChrysler’s Chrysler unit, said he was pleased that the German vehicle builder could make a substantial contribution to Detroit’s comeback.
“This is an exciting day for Daimler Trucks and Detroit. Our investment is a tangible example of how we maximize the use of our global platforms optimized for regional markets,” said Bernhard.
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“Built in Detroit” is not just a marketing slogan, it is our commitment to strengthen the industrial base in Detroit and to deliver the most fuel efficient engines to our customers. I am convinced: With our medium-duty engines we will repeat the success story of our best-selling heavy-duty engines.”