HANOVER - Competitive pressure and globalization forced Daimler-Benz to form a business unit of its heavy-truck powertrain activities.
'A dramatic change and process of concentration' has been occurring in the truck powertrain business unnoticed by the general public, said Claude F.G. Elsen, head of the new ATS unit of the commercial vehicle division at Daimler-Benz AG.
Two main competitors of ATS, he said, had bought 16 formerly independent enterprises in the last 10 years.
Daimler-Benz didn't buy anything new. It collected its own activities under one roof and announced the change at the International Commercial Vehicle Show here. Daimler sees the trend to global presence and growth, and it wants its powertrain business to follow.
The new ATS unit of the commercial vehicle division will have sales of about DM6 billion ($3.4 billion), which is about the size of GKN.
In 1998, the 17,000 employees will make about 200,000 diesel engines, 250,000 transmissions, more than 500,000 axles and more than one million steering systems at plants in Duesseldorf, Gaggenau, Kassel, Mannheim and Rastatt, Germany.
Like the Delphi subsidiary of General Motors and the Visteon subsidiary of Ford, the new Daimler-Benz unit will operate freely in the world markets and offer its products to all buyers. However, Daimler said it had no intention of selling the unit.
Elsen said annual worldwide demand is about five million diesel engines with more than 2.2 liters, eight million transmissions and 11 million axles for commercial vehicles.
Daimler has always sold powertrains to others, but now ATS will concentrate on expansion in the markets of North and South America and Asia. Said Elsen: 'Only global players win on the long run.'