Industrial Vehicle Technology - June 2020
BUILDING RESILIENCE
2020-07-11 05:49:24
COVID-19 COULD BE THE GREATEST CHALLENGE THE OFF-HIGHWAY INDUSTRY HAS EVER FACED - BUT IT IS ALREADY CHARTING A WAY THROUGH THE CRISIS
Covid-19 is a global crisis with a difference. While The Great War, the Great Depression and World War Two wreaked the most terrible devastation and havoc in their time, populations were still free to roam, meet for a beer and, crucially, encouraged to work at all times. But when the world went into lockdown, many industries ground to a halt.
“The effects, short-term, from the coronavirus outbreak are of course very serious,” says Riccardo Viaggi, secretary general of CECE. “Supply chain disruptions have been in place for a few months and may be felt more as time passes.”
But, as lockdowns are eased and economies jump back to life, how will the off -highway vehicle industry move back into a position of growth, and even strength, as the post-lockdown world is defined?
Firstly, there is reason for cautious optimism as the industry came into the pandemic during positive market conditions – 2019 was a good year for OEMs in terms of sales. Furthermore, in the medium term, there is the very real prospect of significant financial support from governments, to help the industry get back on its feet.
Earlier this month a joint declaration by the FIEC (European Construction Industry Federation) and the ECB (European Central Bank) called for a dedicated budget of at least €320bn to be put aside to support the construction industry in Europe. Citing the impact that Covid-19 is having, the two organisations suggested the figure as a way to compensate the pandemic impact and improve the life European citizens.
“The impact (of Covid-19) will be enormous considering the construction ecosystem is worth 20% of the EU GDP and employs over 16 million Europeans,” runs the statement.
Mission critical
Away from construction sites, the other major sector for off -highway vehicles, agriculture, has never stopped. Indeed, there are now calls for special protection to be offered to the machines and related supply chains that are so crucial to putting food on our tables.
“Many OEMs have had to limit or even stop their production because they are missing components due to supply chain disruptions, or because they need to get the right regulations in place to protect employees,” says Jérôme Bandry, secretary general of CEMA, the European Agricultural Machinery organisation. “That we have been able to access a somewhat steady and safe supply of food is thanks to the hard work of farmers, distributors and retailers. Machinery to support the farmers is crucial to help guarantee food security. Put simply, if farmers don’t have access to the right equipment, services and maintenance, they can’t work.”
Bandry has called for agricultural machinery manufacturing to be listed as an essential industry and speaks of a potential food crisis if rules are not changed. “If borders don’t remain open for trafic and trade then you can’t deliver machinery that has been ordered including the spare parts and servicing,” he says. “If Europe is putting in place cross-border green fast lanes which is what they are considering, we need to be eligible for that. We need to retain the ability to run machinery production with access to components. If we don’t, then you have a supply chain that dries up and a domino effect. That is why it’s not just the farmers that need to be part of the critical sector but agricultural machinery, too. We must retain the ability to produce even if it’s partial.”
Bandy is also keen to highlight that these special provisions need to be considered urgently because agriculture operates on the basis of seasons – “and you can’t postpone seasons.” If a particular month is the time for tillage, or spraying you can’t pause and come back to it after the crisis is over. “We must safeguard our sector. It’s not only about food supply today, but six months in the future,” says Bandry.
OEM activity
While some OEM production lines may have been lying idle during lockdowns, many were (are still are being) put to good use producing PPE (personal protective equipment) or even in food distribution (see Protect and serve overleaf).
To celebrate the huge achievements of the engineering community, not just in off -highway vehicle production, but right across the manufacturing sector, MA Business, the publisher of iVT, has begun a new initiative
The dragon’s back
In terms of recovery to a point where OEM production lines are in full use for their originally intended purpose, the rest of the world can look to China for signs of hope. While the first two months of the year saw a slump as Covid-19 hit, as restrictions were lifted in March, so demand for construction vehicles climbed to 2% above the same period in 2019.
Volvo Construction Equipment has significant operations in China, and president Melker Jernberg is able to see a light at the end of the tunnel, due to the essential nature of construction work. “It is clear that we are now entering a tough period, with both production stops and low demand having a negative impact on our profitability,” he says. “That said, we take confidence in the fact that our customers are active in businesses that are important to society, and that our products and services are vital in building sustainable infrastructure for the future.”
“IT’S NOT JUST FARMING THAT NEEDS TO BE PART OF THE CRITICAL SECTOR, BUT AGRICULTURAL MACHINERY, TOO”
According to the National Development and Reform Commission of the People’s Republic of China, 90% of key construction projects had resumed in China during the last week of March, albeit with social distancing in place and the disinfecting of workplaces between shifts. With construction resuming, China’s Haulette subsidiary is redoubling its efforts to deliver mobile elevating work platforms all across the country and is said to be busier than ever to meet customer demands.
Meanwhile Doosan received orders for 32 medium-sized, 22-metric ton grade excavators from two large Chinese construction firms, planned for use in infrastructure construction in Changchun, where a subway, expressway and bridge are being built. With accumulated sales through February reaching 14,000 excavators, the Chinese excavator market shrank by half compared to the same time last year, but then returned to the previous year’s level as 40,000 excavators were sold during the month of March.
Opening up
With a central focus on employee health and safety, CNH Industrial has resumed manufacturing operations. At the time of going to press already more than two thirds of the company’s 67 plants were operational to varying degrees. On a regional basis, more than 75% of production sites in Europe and some 60% in North America, South America and the rest of the world were already operational. Priority was given to agricultural and powertrain manufacturing, considered essential industries, and in response to local market demands. These were followed by commercial and speciality vehicle manufacturing, then construction equipment production.
Also at the time of going to press Manitou Group had restarted partial activity on its production sites in France and Italy. The limited reopening was already allowing the group to gradually restart the whole supply and production chain. “In the context of the health crisis, we have, in conjunction with our stakeholders, implemented very strict prevention and protection measures to ensure that our employees return to work in optimum safety conditions,” says Michel Denis, president and CEO. “Workers are given training as soon as they return on site.”
Last but not least JCB had already announced a partial re-starting of production at five of its UK factories. Safety measures include employees self-assessing for Covid-19 symptoms before leaving home, temperature checks overseen by medical staff for every employee arriving for work, issuing of surgical masks to office and shop floor employees, provision of visors for shop floor employees for extra protection, and the introduction of thermal imaging cameras at UK plants by the end of May.
“Production has resumed at a very low level, mainly to satisfy demand for agricultural machinery,” says JCB CEO, Graeme Macdonald. “Ahead of this re-start, an exhaustive review was undertaken to enable us to introduce wide-ranging measures that will best protect our employees. The actions we have taken ensure that safe distancing between employees on-site can be achieved at all times.”
The coming months
Anxiety remains about machines and components being blocked at borders, and the ripple effect this could cause. Both Bandry and Viaggi are calling on the European Commission to postpone Stage V engine deadlines, manufacturers currently having until 30 June 2020 to fit them, and 31 December to have them on sale. “The application of certain regulation deadlines could cause additional and unnecessary economic damage,” says Viaggi. Meanwhile countries are watching one another keenly to see what works where, in the hope that they themselves can prevent a second spike of cases and a subsequent rise in the critical R-number.
It is in the interests of the global economy to get industry moving once more. The entire off -highway industry can play a vital role if it is given the chance. Slowly it is. One thing is certain, however – safety must remain the watchword.
“WE TAKE CONFIDENCE IN THE FACT THAT OUR CUSTOMERS ARE ACTIVE IN BUSINESSES THAT ARE IMPORTANT TO SOCIETY, AND THAT OUR PRODUCTS AND SERVICES ARE VITAL IN BUILDING SUSTAINABLE INFRASTRUCTURE FOR THE FUTURE”
PROTECT AND SERVE
Since the start of lockdown British OEM JCB has kept busier than most. The company received a direct appeal from Prime Minister Boris Johnson in March to help plug the national ventilator shortage. In response it swiftly produced a ventilator-housing prototype.
In April JCB answered a call from the University Hospitals of North Midlands for donations of vital supplies of personal protective equipment during the current coronavirus crisis. More than 8,000 pairs of gloves and a large quantity of facemasks were donated to the hospital by the JCB World Parts Centre at Uttoxeter, which continues to provide service, technical and spare parts back-up to customers – including farmers maintaining the food supply chain, contractors providing JCB generators to NHS hospitals and hirers keeping crucial utility services intact.
Also in April the company launched an international aid initiative in the communities around its factories to help people in need of food as a result of disruption caused by the pandemic. The company’s catering staff in the UK and India prepared meals for distribution in the towns and villages located close to its plants. The initiative was the idea of Lady Bamford, wife of JCB chairman Lord Bamford.
In May JCB reopened its Innovation Centre at the World HQ in Rocester so tooling and moulding engineers could design and manufacture medical grade visors for NHS staff on the company’s 3D rapid prototype machines. JCB senior design engineer Steve Hawkes (left) is also a member of an organisation called Visor Bikes, a group made up of volunteers, who use motorcycles to deliver visors to front line NHS workers. “I feel very proud to play a small part in getting vital PPE to NHS staff,” he says.
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BUILDING RESILIENCE
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