MAN and Scania to push for electric mobility – the diesel engine’s time is running out

The truck group wants to become more profitable with new drives. But it will only work if the takeover of the US manufacturer Navistar is successful.

Scania participated in electrified trucking project two years ago. Together with Siemens, they conducted the first long haul electric truck trials, with the hybrid truck being hooked up to electric rails above in the hope of significantly reducing emissions.

The Volkswagen holding Traton wants to review its strategy. “All current development projects will be given a new priority,” said Traton boss Matthias Gründler on Wednesday at the general meeting in Munich. Priority is now given to the company’s “decarbonization and digitization”. For Gründler it is clear: “Now the decisive phase for climate-neutral transport begins”. Electromobility and fuel cells would have priority over the further development of diesel engines.

Gründler spoke in Munich at the first general meeting of Traton SE, which is majority-owned by Volkswagen and the parent company of Scania, MAN and Volkswagen Caminhões e Ônibus. The 55-year-old has only been head of the truck holding company for a few months; his predecessor Andreas Renschler left the company in July. Gründler, who was CFO under Renschler until 2018, starts his job in troubled times.

“We expected headwinds, but are in a hurricane,” the Traton boss complained to his shareholders. In fact, the problems for the truck group are enormous: In the first half of the year, sales of the three brands fell by 37 percent, and the operating loss was 220 million euros. It remains to be seen whether Traton can prevent an overall loss this year. “We are far from a sustainable recovery,” said Gründler.

Only the goals are clear. In the medium term, Gründler wants to generate an average return on sales of nine percent per year. While Scania was even able to significantly exceed such values ​​before the corona pandemic, the Munich sister company MAN has been lagging behind for years. “MAN is not where it could be today,” said Gründler.

At the beginning of September, the company presented a restructuring plan that provides for 9,500 of the approximately 36,000 jobs in the company to be cut. “We want to come to a mutually acceptable agreement as soon as possible,” said Gründler.

The MAN works councils already met for a rally in Munich on Tuesday. The board of directors had previously terminated the site security and employment contract, which actually ran until 2030, and could thus issue redundancies for operational reasons. The group works council wants to avoid that in any case.

“We as IG Metall and the works council adhere to every contract. You can’t say that about the board of directors, ”said Works Council Chairman Saki Stimoniaris. IG Metall has called for a demonstration in front of the MAN plant in Nuremberg on Thursday. Diesel engines are manufactured in the plant, which are likely to lose importance in the coming years.

There will also be significant cuts at MAN headquarters in Munich. Here, the Traton managers complain that the administration and development departments are too large. In Austria, the Steyr plant is about to be closed, where medium-sized trucks and driver’s cabs are manufactured.

But Stimoniaris shouldn’t rely too much on the solidarity of colleagues in the VW Group: After the massive job losses at Volkswagen (more than 20,000) and Audi (9500), the chronically ailing MAN is also expected to be liberated. After years of renovation attempts, Wolfsburg is frustrated by the poor performance of the subsidiary taken over in 2011.

Volkswagen will, however, once again take real money into hand for MAN, according to corporate circles. A mid to high three-digit million amount is planned for the severance payment program alone. Responsibility at group level lies with VW’s HR director Gunnar Kilian, who until recently acted as the right-hand man of group works council chief Bernd Osterloh.

Hopes rest on the Navistar takeover

Gründler wants to give the brands more personal responsibility, but continue to dictate the main lines from the holding company. Traton plans to invest one billion euros in the electrification of MAN and Scania trucks by 2025. The development path initially envisages the use of electric drives for buses and smaller trucks, which can cover distribution traffic in large cities. New diesel engines and later fuel cells are provided for longer journeys.

In order for the investments to be worthwhile, Traton needs to take over the US manufacturer Navistar. “North America is the most profitable market in the commercial vehicle business, to which we currently have no access,” said Gründler.

On September 10th, Traton increased its takeover offer, which had been running since January. Traton now wants to pay almost 3.6 billion euros for the remaining 73.2 percent of the Navistar shares. The Americans continue to play poker for the prize, knowing that Traton needs a degree.

Author: Nabeel K

Inline Feedbacks
View all comments