MAN Truck & Bus

New CEO Alexander Vlaskamp is standing next to a MAN truck

Driving change forward in 2022 - reaping the harvest of labor in 2023

An interview with Alexander Vlaskamp, the new CEO of MAN Truck & Bus

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Mr. Vlaskamp, you joined MAN as the new CEO at the end of November. What were the first few weeks like?

Alexander Vlaskamp MAN is a great company with a long history, which I know mainly through the cooperation within the TRATON GROUP. In my first few weeks, I tried to get the most complete picture possible from an inside perspective. Shortly before Christmas, for example, I was able to talk to one of our importers for the first time - unfortunately only digitally due to the pandemic. The Dutch importer reported enthusiastic TGX customers, but also emphasized how important it is for customers to be offered end-to-end solutions via our service network and how we can significantly simplify processes and thus make them even more customer-oriented. In the Netherlands, as in Germany, the topic of e-mobility is becoming increasingly important. We are already well on the way here with our eTGE. Our eTGMs also ensure customer satisfaction. Overall, we are expected to follow a clearly defined path toward e-mobility in the heavy truck sector as well.

How well prepared are we for the major change that our industry is facing?

Alexander Vlaskamp In my first few weeks, I have encountered highly qualified and, above all, many very motivated employees who fully identify with the MAN brand. However, the great willingness to motivate and the measures already implemented already provide the best conditions for successfully driving our transformation forward. Our current business model - production, sales and service of diesel-powered trucks, buses and vans - will unfortunately no longer work in the medium term. With "Fit for 55," the whole of Europe is imposing a program on itself that will force the nation states to further tighten their climate targets and thus partly impose the change on us. Because if we don't change and electrify our fleet, we won't be able to serve our customers in the foreseeable future.

How far has MAN come in transforming the company?

Alexander Vlaskamp We are doing our homework! A lot has been achieved, and my heartfelt thanks go to everyone who has contributed to this with a great deal of energy and commitment! Even though some difficult decisions had to be made, we made them together - also in consultation with our works councils. I am confident that the measures we have initiated will enable us to achieve our overall target of a sustainable improvement in earnings of up to 1.7 billion euros.

How far will the structural measures contribute to this?

Alexander Vlaskamp The structural measures are of enormous importance. We are reducing our workforce in line with the demographic curve - without compulsory redundancies. Good solutions have been found for Steyr and Plauen, giving the sites and our colleagues there a perspective for the future. The associated changes in the production network are well on track. An extremely flexible location with great variance is being created in Poland, which will enable us to produce everything from light to heavy series on a single line. In the ramp-up of engineering capacities for Ankara and Pune, we are about a year ahead of original planning. We are consolidating major parts of our IT in Lisbon. We are slowly reaching the point where the transformation can be experienced in concrete terms at the sites. I am sure this will give us all another boost in 2022, because in 2023 we want and need to reap the rewards of our work.

Where do we stand in the other major area of earnings improvement, the cost of materials?

Alexander Vlaskamp We will already achieve savings of around 240 million euros in the cost of materials in 2021. That's good - but there is still a long way to go before we reach the savings originally planned. We don't have a tailwind in this area. Supply chains continue to be disrupted globally due to the pandemic. The bottlenecks, particularly in semiconductors, are also causing us problems and this is likely to continue throughout the first half of the year. The cost of raw materials is rising steadily - this is not exactly playing into our hands either. On the one hand, our order books are full, at least for trucks and vans. Demand is high, but supply is low due to the economic consequences of the crisis. All OEMs, including us, are therefore facing major challenges, which could also lead to production bottlenecks in the first few months of the current fiscal year.

We also face major technological challenges. Is the e-future already within grasp for our customers?

Alexander Vlaskamp We have to be able to convince them that an electric truck will have a range of over 1000 km by the middle of the decade. We still have to convince customers of the new products. And we will continue to earn money with the "old" products for quite some time. That's quite a balancing act we have to perform. Our customers all take a total cost approach - look at the total cost of ownership (TCO). The tightening of climate targets leads directly to a rising CO2 price and thus to higher costs for diesel. We are already noticing this every year - although still slightly - at the gas stations. However, this effect is growing every year. Around the middle of the current decade, the total operating costs for an electrically powered truck and a diesel-powered one will then be the same. In other words, "E" will become more economical than "D." That's our tipping point, so to speak. That's the only reason why we are currently in the middle of one of the biggest upheavals MAN has experienced in its 260-year history. Because our customers' requirements are changing at an incredible speed and in the very near future. And we have to adapt to this now. Our corporate strategy NewMAN sets the direction for us to do so.

Does that mean that NewMAN is here to stay?

Alexander Vlaskamp The NewMAN strategy has laid a good and very important foundation for MAN's realignment. We will build on this. Speed is of the essence here. It is important that all the wheels mesh together. This starts with the changes in the production network and ends with the realignment, streamlining and management of sales. All measures play their part in ensuring that we sustainably improve our earnings in order to become a “Robust Company”. Only then are we able to generate the funds we need to invest in our future. So that we can play our part as a “Smart Innovator” in the “Verbund”, which is becoming increasingly important. A good example of this is the establishment of the joint venture between TRATON GROUP, Daimler and Volvo to build a high-performance charging infrastructure. Starting this year, 1,700 charging points are to be created across Europe for battery-electric long haul trucks. A joint investment of 500 million euros is to be made for this purpose - by far the largest investment in charging infrastructure for heavy trucks in Europe to date. This alone underlines the seriousness with which the industry is pursuing the e-topic.

And it shows how much money is needed to finance the transformation...

Alexander Vlaskamp In terms of charging infrastructure, we are benefiting from an alliance of the largest manufacturers in Europe. In the future, our MAN trucks will be able to refuel at the high-performance "E" charging points. Cooperation is also the be-all and end-all in other areas. We simply lack the financial resources on our own. With a return on sales of eight percent, we would at least be in a position to make our necessary investments in the future. Unfortunately, we are not yet at this level. To achieve this, we must continue to drive forward the transformation with all possible vigor. It is in our own hands! And I am confident that together we will succeed in making MAN a leading provider of intelligent and sustainable transport solutions! As an important brand within our Group. We need to take cooperation under the TRATON umbrella with Scania and Navistar as well as VW Truck & Bus to a new level so that we can mutually benefit from our expertise. We have been lone warriors long enough.

How confident are you in this?

Alexander Vlaskamp There are many projects that make me confident, such as the changes in the production network or in engineering. In our product portfolio, there are more and more approaches to bundled services - where service is thought of as integrated. We have a good package that I would like to see take effect as early as 2022. So that we receive a good interim report card, so to speak. In 2023, our homework and our hard work will finally be graded. But of course we are already looking beyond these two years. In the area of development, for example, we are working together with Scania under the TRATON umbrella on the fourth generation of the battery-electric platform. Compared with its predecessor generations, it will have a significantly improved proportion of common parts that both brands will then be able to use together, which in turn will bring enormous advantages in purchasing and or production, as well as downstream service - without diluting the strong MAN brand. It is important to rethink at these points, to practically reinvent the truck.

Why do you think we need to reinvent ourselves?

Alexander Vlaskamp Our business models will fundamentally change - driven by digitalization, electrification, and, in the next step, autonomous trucks. "Transport as a service" is an important keyword here. Digital services will become much more important. Only those who set the tone here, have the smartest ideas and the best solutions, will prevail. Actually, there is nothing more exciting at the moment than actively shaping these topics - at least not for a commercial vehicle fan like me. And fortunately I know that I have well over 30,000 colleagues around the world at MAN who also see great opportunities and challenges in this change. If we all pull together, listen carefully to our customers, and adapt quickly enough to the changes in the world of logistics, we will deliver the best overall solution on the market.

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