The death of independence? - feasibility of independent engine manufacturers - Column

Volvo's recent purchase of 10 percent of Deutz re-ignited one of the older, more philosophical debates held around the engine and equipment campfires.

Can an independent engine manufacturer survive? Is it possible to build engines without a built-in, captive, spread-the-cost equipment base?

Like a lot of things in the 1990s, the debate gets pretty quickly into semantics. Exactly what is independent? Did Deutz suddenly become something it wasn't before because it is partially owned by, and is now the primary supplier of, engines to Volvo construction, and truck and bus and marine?

Yes. And Yes.

I think Deutz would tell you that yes, the Volvo buy-in did change their lives. And yes, they are still independent.

But among engine suppliers today, who's really independent? Caterpillar, Navistar, Deere, GM Powertrain, Ford Industrial, Yanmar, Mitsubishi, Isuzu, Volkswagen, Kubota, Kawasaki, Kohler, Honda and Nissan are easy. The name of the equipment is also the name of the engine.

There are some pure independents left, mostly in the smaller horsepower ranges, Lister-Petter, Wis-Con, Hatz, Lombardini, Briggs & Stratton and Tecumseh. But their ranks seem to get smaller every day. And which one of those hasn't been linked to an engine alliance rumor du jour?

Given the cost of developing engines today, plus keeping them current and certifiable, who can afford to be only in the engine business anymore?

If you're keeping score at home, Detroit and Cummins are probably the last remaining large independent engine manufacturers. Independent that is, if you don't count that pesky 10 percent or so of Cummins owned by Ford, and the 20-something percent of Detroit Diesel owned by Daimler-Benz.

Like many things, independence is in the eye of the beholder. Detroit and Cummins, like Deutz, see themselves as independent. The folks in Mossville consider themselves independent of Cat equipment. Ditto Deere Power Systems Group. Acknowledging (of course) their internal equipment as very important "customers."

At one time, a lot of marketing money was spent selling the point that equipment manufacturers were only selling "spare" engines and that when the car/truck/tractor/construction business heated up, you wouldn't be able to get engines.

Boy, does that sound dated.

To the engine buyer, independence, or the perception of independence, may still be important. I can understand why you wouldn't want to buy the single largest cost component in your machine from someone who makes the same machine.

But the fact of life in the 1990s is buyers don't have as many of those kinds of choices. In the 1990s the vast majority of diesel and gasoline engines in the world are manufactured by companies that also make equipment. Bottom line fact.