Here to stay

David Hansen, GM’s general manager of fleet and commercial operations.

General Motors Fleet & Commercial has had a busy year. First, the company unveiled the Chevrolet Kodiak and GMC TopKick, the first major design change for the two brands’ medium-duty product line since 1989. (For more on the Kodiak and TopKick, see pages 84, 86.) GM also is consolidating all medium-duty truck production in Flint, Mich., to provide greater production flexibility.

Leading the charge for GM’s commercial truck line is David Hansen, general manager of fleet and commercial operations. A 37-year veteran of GM, Hansen was appointed general manager of the newly formed Fleet & Commercial Group in January 1999. We spoke with Hansen in late June.

CCJ: Last year, U.S. retail sales fell in virtually every class of medium-duty. How is 2002 shaping up for the industry?
Hansen: We’re seeing a decline overall of about 20 to 21 percent calendar year to date, based on registration data. In Classes 4-7, fleet is off more significantly than retail. On the commercial fleet side, we’re off about 32 percent, whereas retail is off only 6 percent.
Some customers that typically bought thousands of vehicles have stopped buying altogether due to mergers, bankruptcies and so on. But we’re hearing that companies that aren’t in as dire straits as Chapter 11 or Chapter 7 are seeing a steady recovery. They are building cash reserves that will enable them to renew their fleets. We expect the decline in sales from 2001 to be in single digits by the end of the year.

CCJ: At this point, how do things look for 2003?
Hansen: That’s a little bit fuzzier. We could be above 2002 by 10 percent if things turn out well. On the soft side, we’re looking at 3 percent above this year.

CCJ: Your new Kodiak and TopKick represent the first major redesign in your medium-duty lines in more than a decade. What were you trying to accomplish?
Hansen: The philosophy was to improve driver comfort and reduce driver fatigue. But we didn’t really go into this to make it feel like a passenger vehicle.
Instead, we talked to many fleets and owner-operators about their needs and preferences. Although a soft economy has eased demand, just a year-and-a-half ago, driver retention was a major challenge. And as the economy rebounds, it will be again.

CCJ: Increasingly, environmental regulations play a role in vehicle and powertrain selection. Where do you see the industry going in the area of alternative fuels?
Hansen: We see a gradual evolution. All the manufacturers are working on fuel cell technology, but that’s probably 10 years down the road. Today’s focus is on compressed natural gas to bridge the gap. And the market is still very small, limited to buyers who are forced into alternative fuels due to environmental regulations.

CCJ: GM is an enormous corporation, and medium-duty commercial trucks represent a tiny piece of the company’s business. How can your product development and customers get sufficient attention?
Hansen: It’s true that medium-duty is a small fish in a big sea here at GM, but it’s very important. We’re in the process of investing $2 billion, which is a lot of money even by GM standards. So we’re making a long-term commitment to the medium-duty market.
Also, our sales and marketing alliance with Isuzu Commercial Truck (GM owns 49 percent of Isuzu) allows us to support dealers better. That alliance is about 18 months old. GM and Chevrolet always rated below average – to put it kindly – in the American Truck Dealers survey. Our infrastructure within GM was built around the light-duty/retail side of the business. The way to get focus was to form this venture.

CCJ: Any plans on returning to the heavy truck business?
Hansen: With our new trucks we go up to 61,000 pounds, so we have sort of a mini-Class 8. We don’t have any plans to get back into the Class 8 market. But never say never.