January 2010

Daimler Begins New Era of Leadership, Innovation

by Alex Roman, Managing Editor

Since taking over as President/CEO of Daimler Buses North America, Dr. Andreas Strecker helped the company more than triple its revenue, - from $188 million in 2001 to $650 million in 2009 - successfully introduced three new products to the market and grew the company's customer base. During his tenure, Daimler also became the first manufacturer to have orders for more than 3,000 hybrid transit buses. Dr. Strecker, who stepped down from his position on Dec. 31, 2009 to pursue other professional assignments, reflects on the success of the last few years, while his predecessor Richard Ferguson discusses navigating the company into the future.

Can you discuss some of the initiatives that helped grow Daimler's business?

Dr. Andreas Strecker: Certainly, it starts with products. If you have good products, many issues can be overcome. Basically, we introduced three new main products - the first is the Setra S 417, which redefined luxury travel in the marketplace. We also launched a new low-floor transit bus - the Orion VII - and a successful, now world leading diesel-electric hybrid version, which was the first bus worldwide to use Lithium-Ion batteries in series production. Our last product introduction was the Sprinter shuttle bus, which is also in a class of its own when it comes to fuel consumption and design quality. It's not a cutaway, but it's a uni-bodied design that is very robust and, on the same token, very lightweight. It also has a very modern, clean-diesel engine that is fuel efficient - in fact, head and shoulders above the competition.

The next focus is our customers. You need someone to purchase your vehicles and, for us on the transit side, we relied on New York City and Toronto in the beginning. They each placed very sizable orders over the years, which bought us time, so to speak. While building these large, similar orders, we were able to work toward gaining efficiencies and optimizing our production processes. In the past, Orion had issues in handling multiple orders at the same time. With all of our internal improvement programs, we were able not only to build a better, more reliable bus, but our entire production process is now more efficient. This allows us to offer customers a premium, yet competitively priced product, and many other customers came onboard like Houston, Ottawa, San Francisco and, now, also Seattle. These new orders came at a good time because we needed to diversify, and we did so successfully.

How was the company able to reach the market? Was it basically through these long-term customers?

Strecker: We had to gain, or regain, the confidence of our customers. In the early days, Orion was notorious for delivering late. When I came onboard, this was the first issue that we had to address to become successful in the transit market. My team worked on our internal processes, focusing on the basics: building the product properly, developing work instructions on how to build it and creating reliable production schedules. This not only helped our customers, but we are now very competitive within the industry. We partnered with our colleagues in Germany, who build transit buses as well - in fact producing the most worldwide. We compared how they built buses, what processes they used, how much time they needed and then introduced the lessons learned out of these benchmarks. We were fortunate to have this experience, and it helped us a great deal. I think it was the first time that Orion had the chance to get the help and resources that were never available when it was a family-owned company.

Of your accomplishments during this time, what would you say is the one you are most proud of?

Strecker: I am most proud of the fact that we took four entities that were completely independent and all losing money, and turned things around. Most experts would have thought that we were crazy to take four struggling entities and attempt to not only improve them but ensure that they are all working as one company. It is quite rare these days, but we did it. We were able to build one company, with one vision and with a great team of people. We share resources and experiences across multiple brands and products - Setra, Orion and Sprinter - which in turn produces higher quality products, services and an improved customer experience.

From a more personal standpoint, the one accomplishment that I am most proud of is that when I started, Orion was not very well regarded within the market because of late bus deliveries. Now, to have Orion as the largest builder of hybrid buses worldwide is something that I am very proud of.

Can you discuss how the industries you serve have changed during your tenure?

Strecker: The amount of sophistication of the products is ever increasing. For example, now the Orion VII hybrid has Lithium-Ion batteries. We have numerous electronic components and controls on the bus that require a completely new level of qualifications in engineering as well as in production. Our people have to install these new innovations and ensure their operation. Furthermore, our customers now have to maintain this latest technology. In the future, even more electric accessories will be introduced in our products, including air-conditioning, air compressors and steering pumps. These innovations will allow the bus to drive some distance only on battery power. This trend will not be reversed. And, the qualification level will be further increased for everybody involved.

On the motorcoach side, things like wireless Internet, satellite TV, electronic vehicle tracking and preventive maintenance information systems are all available for motorcoaches. In fact, many are standard features these days and were all developed only in the last four to five years.

The level of our own sophistication within the market is also increasing. I've seen customers keeping up with the latest trends, encouraging new technologies and professionally engaged within the market. The days where you simply took a customer golfing and a contract was signed on the ninth hole are over. We have to prove our product can make money for the customer and this holds true for all markets - transit, motorcoach and shuttle bus. Therefore, we have to tailor our marketing and sales approach toward these requirements.


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