Making money as an automotive supplier is rarely simple. In the heavy truck market, the struggles are the same, as some components today are selling at 1980 prices.
Two Ohio-based suppliers,Corp. of Toledo and Corp. of Cleveland, have chosen to collaborate rather than compete. Last year, Dana bought Eaton's heavy axle and brake division for $287 million and sold Eaton its heavy clutch operation for $180 million (see WAW - Aug. '97, p.63).
The companies also agreed to jointly market a complete heavy-duty Class 8 drivetrain package. Called the Road-ranger System, it featuresFuller clutches and transmissions, Eaton antilock brakes and Spicer driveshafts, axles and brake and wheel ends.
Roadranger has been so successful the companies are expanding it to include trailer components and medium-duty axles and brakes.
Until now, Meritor Automotive was the only supplier of a heavy-duty drivetrain. Meritor has sold its "Drivetrain Plus" package for four years.
"The customers have told us they want one-stop shopping and value-added services," Meritor spokesman Mike Pennington says. He estimates 20% of Meritor's heavy truck business is in complete drivetrains.
In theory, this new competition should force heavy component prices even lower.
"We don't set prices. The marketplace sets prices," says Frank Sheehan, vice president of sales and marketing for Dana's Heavy Truck Group. "We've gotten much leaner and much more focused and cost-competitive. I don't think it's a matter of price but of value."