OEM Off-Highway October 2020 by OEM Off-Highway

OCTOBER 2020

State of the INDUSTRY

oemoffhighway.com

ata continues to be an integral component on the path toward further autonomy and connectivity.

PAGE 18

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CONTENTS

VOLUME 38, NO. 6 | OCTOBER 2020

ON THE COVER 18 State of the Industry Data continues to be an integral component on the path toward further autonomy and connectivity. Search: 21174070

19 State of the Industry Q&As

Insights into the coming year from top executives within the heavy equipment industry. 19 Committee for European Construction Equipment: Riccardo Viaggi, Secretary General Search: 21173758

20 CNH Industrial: Jay Iyengar, Chief Technology Officer Search: 21173668

21 Danfoss Power Solutions: Mike Hill, Sr. Vice President, Sales & Marketing Search: 21173692

24 HED Inc.: Chad Repp, Business Development Manager, CANect Telematics, and John Kitzerow, Product Manager Search: 21173632

FEATURES

25 Dana Inc.: Marcus King, Manager of Dana China and Vice President of Dana’s Off-Highway Global Sales, Business Development, Strategy, and Program Management

Market at a Glance: Mergers and Acquisitions

12 Industry Consolidation Brings Technology Advancements Continued consolidation in the heavy-duty vehicle industry has helped address many complex technological challenges while also enhancing the OEM and supplier relationship.

26 Schaeffler: Brian Kreifels, Vice President OEM Sales North America, and Jeff Hemphill, Chief Technical Officer Search: 21173647

27 Cummins Inc.: Eric Neal, Executive Director, Off-Highway Business

Search: 20993610

Market Forecast

14 Heavy Equipment Markets are Down in 2020 and Hopes up for a Better 2021 Negative economic impacts from the COVID-19 pandemic have made 2020 a year to forget for most in the heavy equipment industries. Search: 21172971

Search: 21173640

Search: 21173493

30 Bosch Rexroth: Terry Hershberger, Director, Sales Product Management & eSystems Search: 21173483

31 John Deere Power Systems: Nick Block, Director, Worldwide Marketing & Sales Search: 21173642

32 Terzo Power Systems, LLC: Michael Terzo, CEO Search: 21174421

34 Oilgear: Naimesh Dave, President Search: 21173813

36 Waytek: Kevin Pung, Chief Customer Officer Search: 21173657

38 Eaton: Paulo Ruiz, President, Hydraulics Group Search: 21174080

39 Southco Inc.: John Snyder, General Manager, Transportation Group

14 4

Search: 21173820 OEM Off-Highway | OCTOBER 2020

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the

ent:

ent,

ger, ager

Vice ss

North

hway

oduct

IN EVERY ISSUE 6

Published by AC Business Media

Editor’s Note

Our Industry Continues to be Full of Opportunity

Equipment Market Outlook

Declines Continue for Global Heavy Equipment Markets

EDITORIAL ADVISORY BOARD Craig Callewaert, PE Chief Project Manager Volvo Construction Equipment

201 N. Main Street, 5th Fl., Fort Atkinson, WI 53538 (800) 538-5544 • www.ACBusinessMedia.com

Roy Chidgey Business Segment Head, Minerals Projects and Global Mobile Mining Siemens Large Drives US Andrew Halonen President Mayflower Consulting, LLC

oemoffhighway.com/economics

40 Advertisers’ Index 42 The First Articulated Motor Grader

Senior Field Editor Curt Bennink cbennink@ACBusinessMedia.com Contributing Writer Thomas Berry Senior Production Manager Cindy Rusch crusch@ACBusinessMedia.com

Steven Nendick Marketing Communications Director Cummins Inc.

Art Director Dave Haglund Audience Development Manager Angela Franks ADVERTISING SALES 800 5385544 Al Bower ...........................abower@ACBusinessMedia.com Greg Schulz ....................gschulz@ACBusinessMedia.com Nikki Lawson ................nlawson@ACBusinessMedia.com Sean Dunphy ................sdunphy@ACBusinessMedia.com Kris Flitcroft ...................kflitcroft@ACBusinessMedia.com

John Madsen Director Engineering & Product Management GKN Wheels & Structures

Adding an articulated frame to motor graders helped to improve maneuverability in confined spaces and reduce rework.

Doug Meyer Global Director of Construction Engineering John Deere

Change of Address & Subscriptions — PO Box 3605 Northbrook, IL 60065-3605, Phone: (877) 201-3915 Fax: (847)-291-4816 • circ.OEMOff-Highway@omeda.com

Andy Noble Head of Heavy Duty Engines Ricardo

Search: 21173086

List Rental — Bart Piccirillo, Sr. Account Manager, Infogroup Media Solutions Phone: 402-836-2768 | bart.piccirillo@infogroup.com

Daniel Reibscheid Director of Sales & Marketing Torsion Control Products, Inc.

Online Exclusives www.oemoffhighway.com

Reprints — For reprints and licensing please contact Greg Schulz at 920-542-1239 ............. gschulz@ACBusinessMedia.com

Matt Rushing Vice President, Product Line, Global Crop Care AGCO Corp.

Find more State of the Industry Q&As online:

Allen Schaeffer Executive Director Diesel Technology Forum

Search: 21173696

Keith T. Simons President – Controls Products OEM Controls, Inc.

APEM Inc.: Tony Solis, Director of Sales

Hatz: Michael Hartoonian, President and CEO, Hatz Diesel of North America, Inc., and Dr. Maren Hellwig, loT-Architect, Motorenfabrik Hatz GmbH & Co. KG, Inc. Search: 21174073

AC BUSINESS MEDIA Chief Executive Officer........................................Barry Lovette Chief Financial Officer .........................................JoAnn Breuchel Chief Digital Officer ..............................................Kris Heineman Chief Revenue Officer..........................................Amy Schwandt VP Audience Development .............................. Ronda Huges Director of Digital Operations & IT ...............Nick Raether Director of Digital Strategy ...............................Joel Franke Group Content Director......................................Jon Minnick

Alexandra Nolde Senior Communication & Media Specialist Liebherr-Components AG

Published and copyrighted 2020 by AC Business Media. All rights reserved. No part of this publication shall be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage or retrieval system, without written permission from the publisher. SUBSCRIPTION POLICY: Individual print subscriptions are available without charge in the United States to original equipment manufacturers. Digital subscriptions are available without charge to all geographic locations. Publisher reserves the right to reject nonqualified subscribers. Subscription Prices: U.S. $35 One Year, $70 Two Years; Canada and Mexico $60 One Year, $105 Two Years; all other countries, payable in U.S. funds, drawn on U.S. bank, $85 One Year, $160 Two Years. OEM Off-Highway (USPS 752-770, ISSN 1048-3039 (print); ISSN 2158-7094 (online) is published seven times a year: January/February, March, April/ May, June/July, August/September, October, November/December by AC Business Media, 201 N. Main Street, 5th Fl., Fort Atkinson, WI 53538. Periodicals Postage paid at Fort Atkinson, WI and additional entry offices. POSTMASTER: Send address changes to: OEM Off-Highway, PO Box 3605 Northbrook, IL 60065-3605. Printed in the U.S.A. Volume 38, No. 6, October 2020

Bob Straka General Manager, Transportation SBU Southco, Inc.

Horton Inc.: Erik Roell, Vice President of Global Market Development, and Dave Hennessy, Vice President of Engineering and R&D

Luka Korzeniowski Global Market Segment Leader, Mobile Hydraulics MTS Sensors

Search: 21174198

Left Hand Robotics: Mike Ott, Co-Founder and CTO Search: 21087749

Sy-Klone International: Amy F. Rice, CEO

PRINT AND DIGITAL STAFF Publisher Sean Dunphy sdunphy@ACBusinessMedia.com Editor Sara Jensen sjensen@ACBusinessMedia.com

Terry Hershberger Director, Sales Product Management, Mobile Hydraulics Bosch Rexroth Corp.

Off-Highway Heroes

www.OEMOffHighway.com

Chris Williamson, PhD Senior Systems Engineer Global Research & Development Danfoss Power Solutions Company

Search: 21173756

Topcon Agriculture: Michael Gomes, Vice President of Business Development Search: 21174111

OEM Off-Highway | OCTOBER 2020

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EDITOR’S NOTE

Our Industry Continues to be full of OPPORTUNITY

IN THE NEXT ISSUE

SCHARFSINN86 | ISTOCK / GET T Y IMAGES PLUS

NOV/DEC ISSUE

C C N T

nce again our State of the Industry interviews with executives in the heavy-duty equipment industry provide insight into the trends currently dominating our market segment. While automation and electrification continued to be a prevailing trend in our discussions with industry leaders, the topic of data was also high on the priority list for many this year. Though not a new topic, data is becoming increasingly more important as OEMs look to automate systems and machines, as well as improve equipment insights for customers. As to be expected, the global health crisis was also a key topic for many. Despite the challenges it has presented for the industry, several of our respondents noted it is has also brought to light opportunities. Remote work has changed how many companies do business internally and with their customers; for some, it has helped increase productivity and customer interactions. New this year were video interviews with some of the respondents as part of our weekly video interview series, Design & Engineering Insights. Watch the videos for additional information and observations on current and future industry trends. You can find these and all of our interviews from this series at oemoh.com/InsightsVideos.

c m p q

We want to hear from you! What industry trends are you seeing right now? What technologies are you most excited to see enter the market or that you’re working on? What do you think the biggest trends of 2021 will be? Let us know!

• Advancements in Alternative and Diesel Fuels • Design Trends for Compact Equipment Cabs • Intelligent Fluid Power Systems • New Business Models for OEMs

+ Top New Products of 2020

editor@oemoffhighway.com @OEMEditor

OEM Off-Highway | OCTOBER 2020

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OOH1020

CUMMINS POWER UNIT CAPABILITY BOOSTED WITH NEW POWER TAKE-OFFS

ummins B6.7 and L9 Performance Series Power Units will feature new engine power take-off (PTO) capabilities to support key applications such as cranes, crushers and screeners. Cummins’ power units are available from 75 – 503kW (100 – 675hp) delivered as a complete and ready-made package. This comprises an engine, exhaust aftertreatment system, radiator and cooling system, plus auxiliaries such as mounting feet, hoses and an air cleaner. More than 60% of the content is pre-approved, making the machine integration process simpler and quicker.

The Performance Series power units offer an ultra-clean, flexible dropin solution for manufacturers. The high-power density of our engines enables them to deliver high machine capability for hard working applications such as crushing, screening and pumping. To increase the flexibility and capability of the power units, new single and dual rear-engine power take-offs (REPTO) are being added. They complement the standard PTO capability used for items such as hydraulic pumps and will be available on Cummins base engines as well as power units. As an example, fitted with the dual REPTO, the L9 will have a total drive capability of 560 Nm. This will make the engine capable of driving additional pumping capability through SAE B

2 and 4 bolt mounts. Integrated into the flywheel housing the dual REPTO is compact and has a minimal impact on engine packaging. Added weight is approximately 100kg. For equipment manufacturers will have the ability to efficiently drive more from the engine without the need for additional aftermarket systems. This supports driving of hydraulic pumps for many machine functions from steering systems to fans, etc. It reduces installation costs and complexity, for a more integrated solution. Web: cummins.com Tel: 1-800-CUMMINS™ (1-800-286-6467) Email: care@cummins.com

OEM Off-Highway | OCTOBER 2020

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EQUIPMENT MARKET OUTLOOK

DRAGUNOV1981 | ISTOCK / GET T Y IMAGES PLUS

oemoffhighway.com/economics

DECLINES CONTINUE FOR GLOBAL HEAVY EQUIPMENT MARKETS

• Ave the com

• Qu Tre and Uti lea

-3

-6

-9

-12

-15

.S. Construction Machinery New Orders for the 12 months through June were down 11.2% from 1 year ago; weakness in the construction and mining markets suggests additional decline is likely. U.S. Farm Machinery and Equipment Supplies were also down 17.9% from the year-ago level. June monthly Europe Agricultural and Forestry Machinery Production was down 1.5% from 1 year ago. However, declining export volumes indicate severe contraction in the coming quarters.

Go to oemoffhighway.com to sign up for our monthly ECONOMIC NEWSLETTER!

U.S. Leading Indicator: • The Conference Board’s U.S. Leading Indicator rose for the third consecutive month in July.

ITR Economics is an independent economic research and consulting firm with 60+ years of experience.

QUESTIONS? economics@oemoffhighway.com

• The tentative rising trend in the Leading Indicator monthly growth rate signals business cycle rise for the U.S. industrial sector during 2021.

112 111 110 109 108 107 106 105 104 103 102 101 100 99 98 97 96 95 0

111.4%

112.0%

111.8%

• U.S tot thr Mo com

Actual index (2004=100)

• Co str mi in N nea 0

104.4% 103.5%

-3

103.0%

-6 100.0%

-7.6

-9 97.0%

-12

Dec '19

Jan ’20

Feb

Mar

Apr

May

Jun

Jul

Editor’s Note: Please note that this chart has been modified on the Y-axis to show the trend more easily.

OEM Off-Highway | OCTOBER 2020

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-15

No '1

DRAGUNOV1981 | ISTOCK / GET T Y IMAGES PLUS

U.S. Private Nonresidential New Construction:

U.S. Industrial Production:

U.S. Total Public New Construction:

• A verage U.S. Industrial Production during the 3 months through July was down 11.8% compared to the same 3 months 1 year ago.

• S econd-quarter U.S. Private Nonresidential New Construction totaled $118.8 billion, 2.4% below the same quarter 1 year ago.

• Q uarterly Production ticked up in July. Trends in the U.S. OECD Leading Indicator and in the U.S. Total Industry Capacity Utilization Rate suggest rise will persist in at least the near term.

• D ecline in Construction spending is likely to be driven in part by decline in U.S. Corporate Profits for Nonfinancial Industries, which will likely reduce investment in new nonresidential construction projects next year.

6 -0.7%

-0.7%

Annual % change in 12 month moving totals

5.7%

-0.6% -2.0%

-3

4.6%

-11.8% -12.6%

Feb

Mar

8.2%

8.4%

8.6% 7.8%

7.2%

7.4%

7.6%

May

Jun

4.0%

-12

Jan ’20

7.8%

Annual % change in 3 month moving totals

Dec '19

-7.3%

-15

Annual % change in 12 month moving totals

5.1%

4.5%

-6

-9

• W e do not expect significant increases in new construction in the near term as federal, state, and local governments allocate resources to providing pandemic assistance and stimulus while faced with budget constraints. 10

5.6%

5.0%

5 4

5.8%

• U .S. Total Public New Construction during the 12 months through June totaled $344.4 billion, up 7.6% from 1 year ago. Growth is slowing, with second-quarter Construction up 4.2% from the second quarter of 2019.

Apr

May

-14.7%

Jun

Jul

1 0

Nov '19

Dec

Jan ’20

U.S. Construction Machinery, New Orders:

Feb

Mar

Apr

May

Jun

Nov '19

Dec

Jan ’20

Feb

Mar

Apr

U.S. Defense Industry, New Orders:

North American Rotary Rig Count:

• U.S. Construction Machinery New Orders totaled $31.2 billion during the 12 months through June, down 11.2% from 1 year ago. Monthly New Orders in June were down a comparatively mild 5.7%.

• T he North American Rotary Rig Count averaged 806 rigs in the 12 months through July, down 33.3% from last year. The July monthly Rig Count, at 299, was 72.8% lower than July of 2019.

• U .S. Defense Capital Goods New Orders during the 12 months through June totaled $160.8 billion and were up 6.1% from last year. June New Orders were up 15.0% from the same month in 2019.

• Coupled with corporate profitability struggles, weakness in the construction and mining markets suggests additional decline in New Orders is probable in at least the near term.

• T entative rise in U.S. Crude Oil Futures Prices suggests producers may be incentivized to invest in new rigs moving into 2021.

• G eneral rise in the World Uncertainty Index provides evidence that further growth in New Orders is likely, as defense spending tends to increase with uncertainty.

Annual % change in 12 month moving totals

6.1%

6 -10

-11.3%

-6

-13.1%

-15 -7.6%

-9

-14.6%

-20

-11.2% -12.3%

Nov '19

Dec

Jan ’20

Feb

Mar

Apr

-12.5%

May

Jun

0.7%

-28.6%

-30 -35

2.1%

-23.7%

-25

3.0%

2.9%

-19.4%

-9.2%

-11.4%

4.5%

-16.3%

-7.3% -8.0%

-12

-15

7.6%

-5

-3

0 -33.3%

Dec '19

Jan ’20

Feb

Mar

Apr

May

Jun

Jul

-1

-0.1%

Nov '19

Dec

Jan ’20

Feb

Mar

OEM Off-Highway | OCTOBER 2020

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May

Jun

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EQUIPMENT MARKET OUTLOOK oemoffhighway.com/economics

Europe Ag & Forestry Machinery Production:

U.S. Farm Machinery Production: • U .S. Farm Machinery and Equipment Supplies during the 12 months through June were down 17.9% from 1 year ago. June Supplies were down 6.4% after declines of more than 20% in April and May relative to those months in 2019. • U pturns in commodity prices bode well for recovery in Supplies no later than the middle of next year. 8 7 6 5 4 3 2 1 0 -1 -2 -3 -4 -5 -6

• A nnual Europe Agricultural and Forestry Machinery Production moved lower in June and was down 10.8% from 1 year ago. June monthly Production was down a comparatively mild 1.5% from 1 year ago. • D eclining Europe Export Volume suggests the contraction in Production is likely to become more severe in at least the coming quarters.

Annual % change in 12 month moving totals

5.6%

-2

4.8%

-2.9% -3.5%

-4

2.8%

-4.2%

-4.6%

-6

0.1%

-6.5% -8

-3.2%

-10 -10.5%

Nov '19

Dec

Jan ’20

Feb

Mar

Apr

-5.3%

-5.9%

May

Jun

-12

-11.2%

Nov '19

Dec

Jan ’20

Feb

U.S. HeavyDuty Truck Production: • A nnual U.S. Heavy-Duty Truck Production was down 33.7% in July. The severity of year-over-year decline in the monthly data is generally easing; July was down 46.5% from July 2019, milder than the 92.6% decline in April versus 1 year ago. • T rends in the U.S. ISM PMI (Purchasing Managers Index) indicate a probable early-2021 cyclical trough for Production. 10

Annual % change in 12 month moving totals

6.2%

0.7%

May

Jun

-2

-16.3%

-20

-4

-25

Annual % change

8.6%

Jan ’20

Feb

Mar

Apr

May

99.5

Monthly index

97.9

97.3

97.1

93.8

91.1

Dec Jan Feb Mar Apr May Jun Jul '19 ’20 Editor’s Note: Please note that this chart has been modified on the Y-axis to show the trend more easily.

Germany Industrial Production: • S econd-quarter Germany Industrial Production was down 22.1% from 1 year ago. • T he Germany Purchasing Managers Index for Manufacturing broke above the 50 threshold for the first time since 2018 and was up 18.1% from July of 2019. This bodes well for Production moving into 2021.

-5

5.0% 3.9%

-4.8%

-5.7%

-5.4%

-4.3% -5.9%

-10

0.6%

-2.8%

-13.9%

-15

-8

-30.2%

Dec '19

99.6

-6

-25.3%

-30

100 99 98 97 96 95 94 93 92 91 90 89 88 87 86 0

7.3%

-15

-35

-10

Apr

• Rise in the Major Five Leading Indicator and the China Purchasing Managers Index suggests Production could reach a business cycle low by the end of the year, with recovery on tap for early 2021.

4 -6.6%

Mar

-10.8%

• China Large Diesel Bus Production during the 12 months through June was down 11.4% from 1 year ago. June Production came in 51.2% below June of 2019.

-5

• R ise in the Leading Indicator monthly growth rate suggests the European industrial sector will reach a cyclical trough around early 2021, followed by recovery.

China Diesel Bus Production:

3.0%

• T he Europe Leading Indicator rose further in July.

Annual % change

0 7.0%

Europe Leading Indicator:

Jun

-33.7%

Jul

-20

-7.5%

-10 -12

Nov '19

Dec

Jan ’20

Feb

Mar

Apr

May

-11.4%

Jun

-22.0%

-22.1%

May

Jun

Annual % change in 3 month moving totals

-25

Nov '19

Dec

Jan ’20

Feb

Mar

Apr

OEM Off-Highway | OCTOBER 2020

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ustriund

97.9

Jul

fied on

duc-

ex for shold for

-22.1%

Jun

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SCANRAIL | ISTOCK / GET T Y IMAGES PLUS

MARKET AT A GLANCE: MERGERS AND ACQUISITIONS oemoffhighway.com/20993610

Industry Consolidation Brings Technology Advancements Continued consolidation in the heavy-duty vehicle industry has helped address many complex technological challenges while also enhancing the OEM and supplier relationship. by Sara Jensen

ZF FRIEDRICHSHAFEN AG

onsolidation is a natural part of the evolution of any industry as technologies advance and market expectations grow. Prior to and shortly after the industry downfall in 2008, several companies had formed joint ventures for temporary project development to leverage internal competencies. However, mergers with larger companies soon became the only way

Wolf-Henning Scheider, CEO of ZF Friedrichshafen AG (left), and Fredrik Staedtler (right), who will lead the Commercial Vehicle Control Systems Division.

to survive for many; this trend has not subsided since then either, with new mergers and acquisitions frequently appearing in the news. And we could see it increase even more in the coming years as the industry looks for ways to overcome the negative economic impacts caused by the COVID-19 pandemic.

Technology advancements drive partnerships Enhancing a company’s technological capabilities is one of the biggest drivers for industry consolidation, these days especially as electrification and automation development efforts have greatly increased. By merging

with another company that already has expertise with a particular technology, development time can be reduced, and new products can be brought to market faster. Companies like Cummins, Deutz and Dana have been acquiring or partnering with battery manufacturers and other electronic component suppliers to expand their electrification product lines. As these companies have been in the business of more traditionally powered components for much of their existence, adding new expertise enables them to better expand and adapt to changing industry trends. They are also able to bring their knowledge to ensure these new technologies fit the needs of the heavy-duty equipment industries. This was the case when CNH Industrial announced it would partner with and take a strategic stake in Nikola Corp. Through the partnership, CNH’s IVECO and FPT Industrial brands will assist in engineering and manufacturing expertise to industrialize Nikola’s fuel-cell and battery electric trucks. The companies will work together to bring these zero-emission vehicles to the North American and European markets. “By bringing CNH Industrial on board, we now have access to manufacturing know-how, purchasing power, validated truck parts, plant engineering and much more,” said Trevor Milton, Chief Executive Officer, Nikola Corporation, in the press release announcing the partnership. “We are moving fast in the area[s] of autonomous driving and new drive systems,” said Wolf-Henning Scheider, CEO of ZF Friedrichshafen AG, when

the company announced in 2019 it was acquiring WABCO. Bringing WABCO’s expertise together with ZF’s will help accelerate development of autonomous vehicle systems, the company said. While the companies have many complementary products, WABCO also brought with it braking technology which will be a new addition and integral part of autonomous system development. One of the biggest mergers announced in 2020 was Danfoss’ acquisition of Eaton’s Hydraulics Business. Through the acquisition the companies will be able to bring together their years of hydraulics expertise to better serve customers. In addition, Danfoss will now have a presence in the industrial hydraulics market. “Hydraulics is our core, and we have for years strengthened our Power Solutions business through high customer focus, as well as through significant investments in technology leadership. I believe our customers will benefit from combining these two businesses into a full-line hydraulics player dedicated to innovation and with a broad offering of products, robust distribution channels and tremendous geographic reach,” said Eric Alström, President of Danfoss Power Solutions, in the press release announcing the acquisition. |

C C & P E S C

G C r f w a o e i l i f b

Head to the Web Read the full article at oemoh.com/20993610.

OEM Off-Highway | OCTOBER 2020

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MorrisCou

SCANRAIL | ISTOCK / GET T Y IMAGES PLUS

Complete Custom & HighPerformance Exhaust System Components Grand Bending, a division of Morris Coupling, fabricates short and long radius bends for custom and high-performance exhaust systems for off-highway, asphalt paving, rail-mounted and airport service equipment, as well as on-highway buses and work trucks. An extensive product offering is available in aluminized carbon steel and stainless steel thin-wall tubing. Capabilities include compound bends, welded fabrications, expansion, swaging and beading. ISO9001: 2008 Certified.

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Grand Bending is the proven choice for custom and high-performance exhaust systems for off-highway, asphalt paving, rail-mounted, and airport service equipment. Available in aluminized carbon steel and stainless steel thin-wall tubing.

Get complete information at GrandBending.com or call 770-426-0734. 1092 West Atlanta Street, SE, Bldg. 1200 Marietta, Georgia 30060 Ph: 770-426-0734 sales@grandbending.com ISO9001:2008 CERTIFIED

OEM OEMOff-Highway Off-Highway| |JUNE/JULY OCTOBER 2020

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6/17/20 AM 9/18/20 11:24 9:26 AM

©IMAGE’IN  STOCK.ADOBE.COM

oemoffhighway.com/21172971

Power Systems Research projects a decline of 12.5% for the agricultural equipment industry when compared to 2019.

©PHOTOSCHMIDT  STOCK.ADOBE.COM

MARKET FORECAST

Heavy Equipment Markets are Down in 20 Negative economic impacts from the COVID-19 pandemic have made 2020 a year to forget for most in the heavy equipment industries. contributed by Jim Downey, Vice President-Global Data Products, Power Systems Research

JCB

Main drivers for the industrial segment include material handling and forklift applications, where the demand remains strong.

hen the coronavirus arrived late last year, it profoundly affected most industries, geographies and populations. It has forced most of us to evaluate our established norms and to make changes moving forward. For equipment and vehicle OEMs, powertrain providers and other component suppliers, surviving the current situation and emerging stronger than before this crisis will require new thinking and strategies. The speed and flexibility in adopting new standards and operations differ-

entiate winners from losers. The COVID-19 global pandemic has made this year very challenging across most industries. This includes the production of agricultural (AG) machinery, construction equipment and industrial products in North America. The off-highway segments (agricultural, construction and industrial) are all seeing dramatic production declines in 2020 compared to 2019. Demand for products in most markets and regions has been weak and will not return to normal in the short term; we have already witnessed this during Q2 2020. This is especially true even for the industries that suffered the least impact in supply chain disruption and manufacturing shutdowns. February 2020 marked the end of the longest economic expansion in U.S. history, a stretch of 10 years and 8 months, according to the National Bureau for Economic Research. The U.S. economy was due for a slowdown, but the pandemic dramatically sped up the end of the current cycle.

Agricultural machinery The last few years have been challenging for the agricultural and farming industry in North America. It suffered multiple setbacks in 2019, driven by weather, low commodity rates and trade disputes. Power Systems Re-

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in 2020 and HOPES UP FOR A BETTER 2021 search’s latest numbers indicate that the agricultural machinery market declined 3.7% in 2019 versus 2018, and we had forecast a recovery to start in 2020. However, that projected recovery has been postponed and put on hold again, due to the slumping world economy caused by COVID-19. Currently, we expect the AG segment to follow other industrial and heavy equipment industries. In 2020, we project a decline of 12.5% when compared to 2019. A small recovery is projected for 2021 at 4.4%. The segment decline rate in 2020 is low double digits, based mainly on already low-level production that took place during 2016-2019. Thus, we will not see 25-30% declines in the AG sector as we witnessed in other market segments. We expect that further changes are due to supply chain channels and ultimate rebalancing of market shares among industry players. The recovery will be slow and steady, but we expect levels of production in 2022 to reach those of 2016-2017.

rapid cycle to reset in the construction industry. Government is committed to support the demand in the sector by investing heavily into infrastructure. We have yet to see any new level of demand, but we expect to see signs of the new normal in the second half of 2020 and early 2021. Many of the future infrastructure bills moved to the back burner in favor of help for small businesses. However, infrastructure is a silver lining in the pandemic for many states. With the lockdowns in place in most states during Q2 2020 and reduced vehicle traffic, crews continued their road work and were getting more work done.

During the economic shut down, construction remained one relatively bright spot, since it was declared “essential” by federal and state officials. U.S. government officials signaled that they are looking to steer even more money to infrastructure projects to help the economy recover from the damage caused by the pandemic, but we have not seen any specific moves in this direction. Supporters of spending on infrastructure and transportation believe this could help put people to work with dollars guaranteed to be spent inside the United States, while tackling a backlog in maintenance work that ©ENRIQUE DEL BARRIO  STOCK.ADOBE.COM

Infrastructure funding is a silver lining for many in the construction equipment industry.

North American construction equipment production is projected to be down 14.2% in 2020.

Construction equipment The construction equipment market in North America has been riding a strong economy over the past few years. The segment was due for a slowdown; however, current worldwide economic conditions have caused a

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MARKET FORECAST

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Recovery for the agricultural equipment market will be slow and steady over the next few years.

acts as a drag on the economy. Our most recent North American construction equipment projection on production shows a decline of 14.2% in 2020 when compared to 2019 volumes. While forecasting a double-digit decline in 2020, we remain rather optimistic on the mid-term view (20212023). We expect the market segment to post a growth rate in 2021 of 4.2% when compared to 2020 and an additional increase of 6.5% in 2022. Within our construction segment we

track 20 product categories. The range for the declines on those products is from scrapers at -20% on the high side and motor graders on the low side at only -4%.

Industrial products The industrial market segment is quite fragmented and has products which range from forklifts to compressors and pumps. This segment typically follows general economic trends and the construction equipment industry, with some minor exceptions. Currently, we expect an overall decline in production numbers at -12.1% for 2020 when compared to 2019 production levels. We are projecting 2021 production to increase around 4% over 2020. We are not expecting to see pre-COVID (2019) production levels again in North America until 2023. As with most other sectors of the economy, we have yet to see new levels of demand be established. The second half of 2020 will be critical to understanding the negative impact on the demand for industrial products from the coronavirus and how we can expect to move forward. As stated with the agricultural and construction markets, we expect similar and new rebalancing of the distribution of market

shares and supply chain norms. The overall growth dynamic for the industrial products sector is closely mirroring that of the construction segment. The main drivers for the industrial segment are small construction equipment, material handling and forklift applications, where the demand remains strong. Across all market segments, we expect overall total OEM equipment production numbers to be significantly down in 2020, with some segments varying considerably. Currently, we do not see a return to significant economic activities and solid demand for products in most markets until early next year (2021). At this time, we forecast year 2021 to be in the low single digit positive range versus 2020, but future growth will depend on the pandemic spread from the second wave of the coronavirus and the overall speed of the recovery. These markets will continue to evolve and adjust. The next few years will be very interesting to see how long recovery will take and what that will look like not only in North America but globally as well. | This article was written and contributed by Jim Downey, Vice President-Global Data Products, Power Systems Research.

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STATE OF THE Industry 2020 Data continues to be an integral component on the path toward further autonomy and connectivity.

ata was a prevailing theme in many of this year’s responses, indicating its continued importance to the heavy-duty equipment industries. Creating actionable data is integral to ensuring end-use customers can get the most out of their machines. Data is also a critical component of automation and connectivity, which are becoming increasingly more common in the industry—and will continue to do so in the coming years. This year’s State of the Industry interviews provide insight into how OEMs and component suppliers are working to improve the way they collect and provide data to benefit themselves, customers, and meet the technology needs of the future.

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Interview topics for 2020 include: • Global Markets, Government & Trade • Impacts of COVID-19 • Diesel, Electric & Other Power Alternatives • Data, IoT & Connectivity • Automation & Smart Systems • Challenges & Opportunities Be sure to head online for full-length interviews—including video interviews with some of the respondents—as well as executive Q&As not seen in print at oemoffhighway.com/magazine. |

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Regulations Will Continue to Impact the Construction Equipment Industry

responses submitted by Riccardo Viaggi, Secretary General, Committee for European Construction Equipment (CECE)

Efforts to reduce emissions will remain a driving force for the design of traditional and alternatively powered construction equipment. Diesel, Electric & Other Power Alternatives How do you see alternative fuels playing a role in the heavy equipment industry in the coming years? What impact do you see electrification—or other alternative energy/power systems—having on the mobile equipment industries? We see all of those continuing to grow. There is a general market pressure; we are delivering that innovation and we have been delivering innovations that curb fuel costs. From a European point of view, what we start considering and will keep considering is the regulatory push in all this. For us the key is sustainability. Sustainability has three legs—it’s environment, society and economy. If solutions do not meet the economic feasibility and economic productivity needs of a construction contractor and an infrastructure project, they will probably have a short lifespan. They will only work with public support, public spending. This is for us the philosophy behind what we call the four pillars approach. So there are four pillars to CO2 reduction; that’s what the European Union wants to curb with its own Green Deal and the climate law that the European Commission is planning. We believe that legislators must understand we are not at all like the on-road sector, we are not manufacturers of vehicles moving people or goods from A to B,

we are production machines that are used by another company in a B2B transaction in order to create productivity and profits. So, this is why our four pillars approach is key because the machinery efficiency is only one of the four pillars. Then you have to add on process, operation and alternative energy sources. This is our approach to sustainability, to alternative fuels and to the general, very understandable struggle to curb emissions. Are there any emissions or other related regulations your association is monitoring, or feel will have an impact on the industry? We always keep an eye on all regulations that might have an impact on our equipment. What we usually keep an eye on is how the regulators decide to create provisions for the heavy-duty vehicles. The legislators [have] said before sometimes they make the assumption that whatever works for big trucks works for excavators. And that of course is not the right approach. We kept an eye on what the commission has created for CO2 regulations. And we will be watching the EU Green Deal and the climate law. For the moment, we are not in the legislators’ targets. But we know that we have our role to play. If it’s not as a European Union regulation, there are other pressures.

Challenges & Opportunities What are the biggest challenges and opportunities you see for the industry? The largest challenge, which is not always widely mentioned, is related to people, to the workforce. It may not be the challenge for the next 1 or 2 years, but it’s a generational challenge. I like to think that to every challenge there is an opportunity. Some of the things we’ve discussed, such as data, digitization, automation will present opportunities. A lot of the tasks in construction are being automated; a lot of repetitive tasks, physically challenging tasks are being automated or at least supported by machines—robots, cobots are buzzwords we are hearing on construction sites. This is allowing the industry to change its image from a dusty, dangerous kind of macho industry to something a bit different. And that in my opinion opens a whole new possibility when it comes to the image of the industry towards young people and even women. That’s where I see possibilities to tackle that challenge. |

Watch the Video Watch the full interview for more of Riccardo Viaggi’s insights on current industry trends at oemoffhighway.com/21174209.

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A Technology-Driven Transformation is Underway

responses submitted by Jay Iyengar, Chief Technology Officer, CNH Industrial

Development and incorporation of technologies such as automation and smart systems is creating a more advanced heavy equipment industry. Data, IoT & Connectivity How will the role of the Internet of Things (IoT) and data continue to progress in the coming years? Digital technology provides exciting possibilities for machine automation and remote monitoring. Embedded electronics, new sensors and data analytics methods (AI/ML) allow you to automate more and more key machine functions, leading to full automation and autonomously operating intelligent vehicles. Connectivity is an enabler for remote monitoring and data collection creating new business opportunities such as precision farming, gathering machine operational and performance data, agronomic data and sending data to the machine to control the operations to enable new “machine as a service” models. In summary, benefits of IoT and data analysis are limitless. They are centered around efficiency, cost savings, decision making, and operator enhancement. To use agriculture as an example: We can monitor nearly every aspect of a farming operation, whether it be tillage, planting, spraying, or harvesting. Data collection and digital tools allow us to reduce waste and improve crop management. We can also maximize available labor and input resources and track performance. At the end of a crop season, we can use our yields to determine how to approach the next season. IoT and Big Data will shape the industry in the years to come.

Do you see a path toward the use of AI, VR or AR in your manufacturing processes, or even on-board the vehicle itself? Adoption of any technology is centered around value creation and these are at different stages of maturity on the road-map, but rapidly growing. I see AI (artificial intelligence) having a broad application in many areas for our products, both on-board and off-board, especially in providing actionable insights from large data sets. It’s not the data but its analysis and resulting insights that matter, and to that end, the application of AI is limitless starting from diagnostics and prognostics to advanced machine controls. In agriculture, we see AI as a foundational need to drive full agronomy. We are also seeing the benefit of AI in manufacturing processes especially in quality management and operational efficiency. VR (virtual reality) and AR (augmented reality) technologies have an immediate application for remote services, repair and training of service and manufacturing personnel. We are also seeing an increased use in the area of customer experience: for example, we can simulate an interactive cab environment for customers which can help them in their decision-making process before purchasing the vehicle. In our manufacturing plants, we are beginning to apply these technologies for operator training, process control, etc. as a part of our Industry 4.0 transformation. We are also increasing the

application of AR/VR technologies in product development with the ability to create a “real world” digital twin prior to proceeding with the detailed design.

Challenges & Opportunities What are some of the biggest opportunities you see in the industry? Our ability to drive transformation through technology depends on the speed with which we bring solutions to the market in a targeted way so that customers can see the value immediately. At CNH Industrial, we do believe that open innovation and partnerships become critical to ensure speed and co-create customer value. Transformation of the technical skills of the industry as a whole, not just in product development, but the full value chain including supply chain, sales, maintenance and service is needed to ensure adoption and we have a great opportunity to transform the overall image of the company towards becoming a high-tech industry. The main challenges in any new technology is wide market adoption. Key to driving adoption is to remain focused on the customer. To this end, it is important to think about modularity, create building blocks of technology which can be progressively deployed with incremental features and functions. With the rapid pace of progression of underlying core technologies, the challenge is to make sure the solutions do not become obsolete. |

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Connectivity, Data Capture and Analytics Will Accelerate Automation

responses submitted by Mike Hill, Sr. Vice President, Sales & Marketing, Danfoss Power Solutions

Further technology development paired with improved data collection and analysis will enable the creation of safe and productive autonomous vehicles. Automation & Smart Systems What impacts are you seeing automation playing on the heavy equipment and vehicle industries? Historically, end-users have relied chiefly on highly skilled experts in the operation of heavy equipment. However, with global labor shortages, automation can provide a safe, efficient and sustainable solution for businesses in such markets as roadbuilding, construction, mining, material handling and agriculture. Safety is a key aspect of the overall value proposition for autonomous heavy-duty vehicles. By removing the operator from the machine, we can significantly reduce the safety risks, especially in those applications, such as mining, where the workplace environment can be dangerous. By incorporating tele-operations, we enable operators to remain in “the driver’s seat,” fully in control of vehicle maneuvering and from a safe, comfortable control room, rather than being confined inside the cab of a dump truck in a mine shaft 1,000 ft. (304.8 m) under the ground. Danfoss continues to invest in automation, whether it is at our Innovation Accelerator office, [or] combining technology development and specific application expertise in [our] Application Design Center (ADC). In addition, we have a strategic partnership with Autonomous Solutions, Inc. (ASI)—a global leader in vehicle automation—to collaborate

on autonomous technology for mobile equipment applications and adjacent markets. We continue to invest in developing our IoT platform with hardware and software solutions. These include our Vision and Vehicle Controllers and software blocks for autonomy that provide our customers with the necessary building blocks required to begin their autonomy journey. Our platform is “brand agnostic,” offering a key value for our small/medium customers as it allows them the freedom to choose the solutions they prefer for their applications. We’re also expanding our product portfolio to help our mobile customers develop and build the best machines possible. We believe this will be significantly strengthened by our upcoming emergence into industrial hydraulics through our acquisition of Eaton Hydraulics. While bringing new products and market reach, our upcoming merger will also double the number of engineers within Danfoss Power Solutions – a key investment in innovation. Connectivity of machines, data capture and analytics are the keys to accelerating automation in the industry, coupled with further development of technology, including sensor development. This will require new standards around communications protocols and data sharing. Ultimately, we need to collect the data via such

tools as telematics, however, data analytics provides the real opportunity to harvest true insights which drive safety, efficiency and productivity for our customers. Today, we deliver customized solutions and configurations to customers within such markets as roadbuilding, construction, mining, material handling and agriculture. This poses a challenge to develop actionable and scalable insights. In addition, the cost of connectivity is a barrier today, but we believe the investment costs will be reduced using 5G and other new technologies, As a result, the number of connected machines will grow and data analytics will continue to evolve quickly, which will inevitably result in better, more data driven, and thus more clever and faster, decision making and productive machines for our customers. Danfoss Power Solutions’ focus in this space strategy is squarely on the overall vehicle control system, which is our strategy for becoming the best in the world in the area of controls. |

Want more State of the Industry executive interviews? Check out the Table of Contents on pg. 5 to see a complete list of the Q&As we couldn’t fit in print!

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MAKE A

STATEMENT. Vanguard® innovates to solve real problems. We work alongside our customers to develop solutions that solve their problems. We’re power application experts. Our latest commercial power solutions include a Commercial Lithium-Ion Battery and the new Vanguard 400 Single-Cylinder engine, built from the ground-up.

VANGUARDPOWER.COM

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Vanguard® innovations shake things up. The same old same old isn’t good enough anymore. Our industry is changing, and it’s only right that our power solutions should change with it. This is why Vanguard is bringing innovative solutions to the offhighway industry. Jeff Coad, vice president global marketing, engines and power at Briggs & Stratton, weighs in below.

Q. WHY INNOVATE?

Q. WHAT CAN WE EXPECT TO SEE IN THE FUTURE?

A. There are those in the industry who innovate for innovation’s sake. At Vanguard, we focus on developing innovations that solve problems. So, if the innovation doesn’t make operations easier, more productive and more efficient, we aren’t doing it.

A. The introduction of the Vanguard Battery Pack is indicative of our changing industry. We expect to see continued innovation around alternative power sources, as well as the development of practical solutions that work to improve engine power, performance and productivity.

Q. WHAT INNOVATIONS HAS VANGUARD INTRODUCED? A. Our innovations have one purpose — to make your job easier. We’ve brought our Oil Guard™, TransportGuard® and Vanguard EFI technology to the industry to help do that. Now, we’re proud to be introducing our latest innovation — the Vanguard Commercial Lithium-Ion Battery Pack. We believe our battery is breaking new ground for alternative power solutions. Q. HOW DOES VANGUARD DEVELOP INNOVATIONS? A. The short answer? We talk to you. Our innovations are all customer driven. We continually ask our customers what they need to be successful, then design and develop solutions to meet those needs.

“

THE INTRODUCTION OF THE VANGUARD BATTERY PACK IS INDICATIVE OF OUR CHANGING INDUSTRY.

”

– Jeff Coad, vice president global marketing, engines and power

Check out how Vanguard innovations can shake up your job site at vanguardpower.com

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S TAT E O F T H E I N D U S T RY

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Data Will Help Drive Further Technology Adoption

responses submitted by Chad Repp, Business Development Manager, CANect Telematics, (above) and John Kitzerow, Product Manager, HED Inc.

Secure aggregation of data will allow more valuable information to be gained for the creation of advanced technologies. Data, IoT & Connectivity How will the role of the Internet of Things (IoT) and data continue to progress in the coming years? CR: Every day we hear about new innovative ways to utilize data from IoT solutions, which is inspiring. These innovations will increase the adoption rate of electrification, machine learning and even autonomous vehicles. Without the data collected by IoT solutions, engineers would be challenged to understand real-world utilization of the machine which is necessary to properly design and implement their next-gen machinery. An example of this is the Xalt Battery Viewer solution, where bus manufacturers and transit companies want to move into the Electric Bus era yet have skeptics talking about battery range and longevity limitations, in addition to other concerns. IoT solutions provide engineers a way to prove their solution with real data to the field and to skeptics. In this example provided, like many others, IoT becomes the enabling factor to help drive new technology adoption. What challenges remain or lay ahead for the continued adoption of data, IoT and connectivity related technologies or systems? CR: Two major challenges continue to hamper the true potential of IoT, Data Overload & Fragmentation. With the limitless amount of data available to be collected, many organizations just starting out will collect all kinds of information at millisecond rates. This

Data Overload quickly overwhelms the users of the solution and they struggle with applying that data in useful ways. Part of this is due to the numerous use cases IoT can support which is why it’s so important to have a key objective like decreasing transmission warranty claims or improving safety by monitoring off-axis driving behaviors. In both examples, there is a limited data set required to achieve the objective and additional use cases can always be added on as they become necessary. As far as fragmentation, there are numerous players within IoT (OEM, supplier, solution provider, dealer, operator, etc.) and each one has a different use case that scales across verticals, industries, machine brand/models and users. Being able to support all of these players through a single solution is extremely challenging which is where Open Platforms and common communication protocols come into play. We’re starting to see more “openness” throughout the off-highway markets, but we have a ways to go yet.

Automation & Smart Systems What is needed to further progress equipment and vehicle automation? JK: Taking equipment and vehicle automation to the next level will require controllers with more advanced features that continue to withstand harsh environments. The next generation of control solutions will need to have fast, powerful 32-bit microcontrollers with higher amounts of Flash and RAM memory to handle the

complex calculations that automation applications are demanding. If the system automation is complex enough to require MATLAB and Simulink, two model-based development environments, the processing power and memory will be beneficial. Multi-core processors will be needed to handle simultaneous operations and to enable the controllers to meet safety ratings that might be required of automated applications that take control away from human operators. Next generation controllers will also need the latest serial interfaces that will be required to communicate with advanced sensors and other controllers on these advanced applications. The communication protocol CAN-FD is expected to support these new advanced sensors/ controllers moving forward which will also maintain communication with traditional CAN-based devices. Its best to also have CAN-XL so the controller will be prepared for even more advanced sensors and controllers when they begin to be utilized. Ethernet will be needed to communicate with telematics modules for remote monitoring of system parameters, diagnostics, prognostics, as well as software updates to refine the automation based on the performance data collected. The next generation of controls will be a significant step forward compared to controls developed over the last 5-10 years, and if done right, will offer sufficient automation solutions for the next 5-10 years. |

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Electrification a Key Driver for the Foreseeable Future Rapid development and adoption of electrification technologies will continue to drive the market. Global Markets, Government & Trade

Diesel, Electric & Other Power Alternatives

What are the key global markets your company sees as growth opportunities and why? For Dana, the largest growth opportunity is in Asia, especially China, India, and the southern Asia-Pacific region. The growth in China stems from the continued investment in domestic infrastructure and other construction projects, as well as the ongoing support for the Belt and Road initiative. In India, Prime Minster Modi recently committed nearly $1.5 trillion to 7,000 projects under the National Infrastructure Pipeline initiative, which will support high-speed rail, airport modernization, and advanced freight capabilities. With respect to end markets, we’re focusing on compact construction equipment and mobile elevated work platforms (MEWPs) to support urban projects in Europe and, to a lesser extent, in China. We’re also seeing growth in the agriculture and material handling segments, which can be partially attributed to reactions to COVID-19. Governments are investing in agriculture capabilities as they look to preserve and reinforce food supply chains, while the exponential growth of online shopping has spurred increased sales of forklifts and other material-handling equipment.

What role is electrification—or other alternative energy/power systems— playing in your company’s design initiatives? Electrification is a key element of our corporate strategy, and Dana has made 13 acquisitions in the past 5 years—including eight focused on electrification—to strengthen our technology portfolio and engineering expertise in electrification across all the vehicle markets we serve. Through these additions, we’ve been able to address immediate opportunities where the electrification of equipment is well underway, such as underground mining vehicles and MEWPs. For other applications where the market is developing, such as telehandlers and compact construction equipment, we are prepared with a strong array of technologies that allow us to be dynamic and responsive depending on the direction each OEM wishes to go. Another key in the success of our electrification strategy to date has been the focus on integration. While technologies are critical, it’s equally important to understand how they work together and what adjustments need to be made to optimize performance. It’s why we acquired Nordresa and Rational Motion, prominent integration and application engineering experts for the development and commercialization of electric powertrains.

responses submitted by Marcus King, Manager of Dana China and Vice President of Dana’s Off-Highway Global Sales, Business Development, Strategy, and Program Management, Dana Incorporated

We have a number of small and large customers coming to us to take their traditional engine-powered vehicles and help convert them into electrified versions, and we have the internal expertise to deliver turnkey solutions that don’t require deep commitments of engineering resources on the part of OEMs.

Challenges & Opportunities What are the biggest challenges facing the industry currently, or do you see the industry facing in the coming years? The off-highway industry is moving faster than ever before, and we constantly need to be cognizant of trends at the local level, which drives a certain degree of customization from market to market. This is driving us toward modular solutions with technologies that can be leveraged across designs while allowing for the sub-segmenting that customers expect. This approach has the added advantage of reducing our design times and improving our speed to market. Are there any technologies or trends you are currently excited about? Electrification is going to be a tremendous driver for Dana for the foreseeable future, which is why it’s at the forefront of everything we’re doing from a planning perspective. We’ve seen rapid shifts in the market toward electrification in the past 2 years, including growing demand from equipment buyers. |

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Immense Potential and Opportunity Exists for Advanced Technology Developments

responses submitted by Brian Kreifels, Vice President OEM Sales North America (left) and Jeff Hemphill, Chief Technical Officer, Schaeffler

Evolving markets and technologies will offer great potential for those able to capitalize on developing the right solutions. Diesel, Electric & Other Power Alternatives What opportunities for technology and efficiency advancements still exist with diesel engines? BK: There continue to be many opportunities for improving the efficiency of diesel engines, especially with regard to minimizing friction and thermal losses. To that end, there are a number of technologies—such as next-generation rolling element bearings from our INA and FAG product brands, low-friction coating solutions as well as waste-heat recovery—that have yet to be fully explored. Additional engine efficiencies can be realized through the use of variable valve actuation strategies (e.g., valve deactivation, cam profile switching, variable cam timing, etc.) as well as active, controlled management of the engine and vehicle systems’ cooling circuits. Moreover, there are numerous opportunities to reduce emissions “in-cylinder” that can mitigate or even eliminate the need for external aftertreatment devices—such as particulate filters and selective catalytic reduction (SCR)—while still achieving increasingly stringent overall emissions mandates. Indeed, many of the variable valvetrain technologies mentioned above can also be used to achieve improved in-cylinder emissions.

How does your company see alternative fuels playing a role in the heavy equipment industry in the coming years? JH: As fuel cost is always a major percentage of operating cost and pressure to reduce emissions is always rising, alternative fuels are constantly being analyzed by the industry. CNG is a popular option since fracking has dramatically lowered the cost but, so far, the savings have not justified changing over the jobsite fueling infrastructure. Currently, hydrogen is a rising star with several fuel cell offerings but this also faces infrastructure challenges. Biofuels are interesting from a CO2 perspective but face cost challenges. As an engine systems manufacturer, we are relatively unaffected by the choice of fuel from a direct perspective. Of course, the use of alternative fuels can impact engine operating conditions or lubrication, which are factors that have an indirect influence on our systems. In such cases, we may consider optimizing the materials, utilizing special heat treatments, and/or employing any of our proprietary coating solutions to ensure that we are providing a robust solution for the given tribological conditions. We are also enabling fuel cells with our coated bipolar plates. Overall, we have some money on every horse and look forward to seeing how it works out.

Challenges & Opportunities Are there any technologies or trends which you are currently excited about, or most looking forward to seeing in the coming years? BK: The industry-wide interest in exploring the potential benefits of electrification has been a fantastic opportunity to be an active part of shaping future product generations. It is especially gratifying when we can jointly discuss the benefits and tradeoffs of our many new solutions such as e-motors and hybrid modules for electrified drivelines or electromechanical actuators. This dialogue enables us to understand where our solutions are in accord with our customers’ future technology roadmaps, just as it allows us to uncover opportunities to further align with their needs. All of which makes this a unique and exciting time: Suppliers and OEMs are actually able to work together as partners to develop these emerging technologies – as opposed to the more traditional scenario wherein the OEM simply integrates a supplier’s established technology in its product. At the same time, there are many exciting opportunities to optimize existing non-electrified machine designs, as these will certainly remain in use for the foreseeable future. This is an ideal time to work in the heavy-duty vehicle industry. As regulations, markets and technologies continue to change and evolve, there is enormous potential and opportunity for those innovators who can read these trends and capitalize on them by developing the right solutions. |

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Diesel Will Become Cleaner and More Efficient Major improvements in the performance and efficiency of diesel-powered systems will continue to be developed. Impacts of COVID-19 What, if any, long-lasting effects do you think the pandemic could have on the industry? Business-to-business interactions may never fully return to how they were pre-COVID. I think many companies have quickly grown comfortable and efficient leveraging online tools for daily interactions. This by no means devalues the face-to-face aspect of building relationships, however it makes everyone look at travel more critically moving forward. How do you foresee the industry coming through this? Slow and steady. 2020 pre-COVID was expected to be down from 2018/2019 highs and COVID amplified that demand weakening. Looking forward in time we expect the market to steadily climb back up through at least the 2023 time frame. Regional ebbs and flows are to be expected due to normal, non-COVID dynamics but overall a steady climb.

Diesel, Electric & Other Power Alternatives What opportunities for technology and efficiency advancements still exist with diesel engines? A consistent message we convey is that we see diesel being around for many years to come, we also expect it to become cleaner and more efficient. Diesel also meets specific power requirements for customer needs that current alternate technologies are not

able to competitively meet. Power density increases should continue to be expected out of diesel, just look back at EPA Tier 3 product output by displacement compared to our latest Performance Series engines today. Major improvements have been made and there is no reason to expect engineering to slow down now. Emissions reduction is still possible with technologies coming from the on-highway sector focused on reducing NOx output and other constituents. Efficiency gains will be realized through downsizing opportunities, smarter powertrain integration, wider adoption of features like Start/Stop, etc. Diesel still has a long runway and many exciting future advancements should be expected. How does your company see alternative fuels playing a role in the heavy equipment industry in the coming years? At this point, our on- and off-highway engines meet and exceed the very latest regulations and can be used in the ultra-low emissions zones such as London. There is a real impetus to have low emission areas in ports and inner-city areas that will drive the need for more alternate power and is why Cummins is investing in a wide range of new power solutions to be ready for this. Cumminsâ&#x20AC;&#x2122; strategy is to understand all emerging power sources in the future and offer the most appropriate one for each customer and machine. In addition to advanced diesel technolo-

responses submitted by Eric Neal, Executive Director, Cummins OffHighway Business

gy and various forms of electric power, we are exploring other power sources such as fuel cells, gasoline, natural gas and other technologies. It is our expectation that adoption of alternate power will be a slow ramp rate with electrification of compact equipment probably the nearest term. There is no doubt a lot of excitement in the industry for technology like electrified power, and will continue to be, itâ&#x20AC;&#x2122;s just a matter of keeping a pulse on the drivers that will pull the technology mainstream.

Challenges & Opportunities What are the biggest challenges facing the industry currently, or do you see the industry facing in the coming years? A key challenge is the changing emissions landscape around the world. Traditionally lagging countries such as China and India will make huge leaps to European/U.S. level technologies. This will introduce new technologies into areas which have not experienced things like aftertreatment systems in the construction space before. Cummins has significant global experience to support our customers through this. Are there technologies or trends you are currently excited about? The answer is many. Alternate power absolutely is exciting, and we are building our portfolio at a rapid pace. Diesel continues to be exciting, with so many potential levers to pull. There are more big things to come for internal combustion. Finally, digital connected solutions tools provide real opportunity to impact the end-user experience and help our OEM partners. |

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Curtis Instruments

Your Electrification Partner For the electrification of construction equipment or mobile machinery, think Curtis. With over 60 years of electric vehicle expertise and a global record of innovation and product excellence, we are ready to partner with you in every stage of electrification with hybrid diesel-electric and fully electric solutions. Curtis will support your engineering team at every step in the product development, from initial prototype design through to production release. Our inverters/motor speed controllers and electric control systems set the standard for electric power at 48V and beyond. Highly reliable Curtis components are available in a range of models suitable for every type of application. Our sophisticated electric drive systems are packed with cutting edge features and functions that make vehicle design simple. We will work with you as needed, whether it is to assist with the design and development of electric traction systems, On-Engine Generator Control or to assist with the design of the complete control system for all mobile application types, including complex electro-hydraulic control systems. Curtis has partnered with leading manufacturers of batteries and electric motors to help OEMs design new electric powered dumpers, mini excavators and wheeled loaders. All benefit from proven Curtis 48V technology and the robust, reliable and sustained performance that was previously assumed to be confined to diesel engines.

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www.curtisinstruments.com I N N OVAT I O N & EXCELLEN CE

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The Role of Data Must be Purposeful Useful data enables better understanding of machine performance and normalization of machine connectivity. Data, IoT & Connectivity How will the role of the Internet of Things (IoT) and data continue to progress in the coming years? IoT has continued to progress beyond just fleet management or location data. In this digitalization era more and more data and information is available to process. However, the role of data must be purposeful and bring value to the beholder. Big Data is not necessarily the answer. Useful data that is being used to understand the status or location of a machine or available for calculation for preventive maintenance. That said, the continuing progression to the point of having every machine “connected” will be normal. One can see that with the adoption, progression and understanding of being connected and the data available could make “normal” mean that the warranty of a machine will depend on a machine being connected or your rental rate or operation from a rental company may be based on the data provided back to them on how you are running the machine. When the information and connection/telematics (informatics) is available and useful, it makes IoT the standard. It’s here and it’s now. What challenges remain or lay ahead for the continued adoption of data, IoT and connectivity related technologies or systems? The feature-cost benefit is the biggest challenge. As in most cases the end user of the machine, or likely a rental/ fleet manager, will drive the adoption of connectivity and data. Useful, purposeful data that adds value to where

a machine is located or how it is performing are simple enough to obtain, but there is more than this that could be available to evaluate. The challenge is therefore being able to react to the wants and needs of the person responsible for the machine. Of course, being able to troubleshoot any issues with the machine remotely is a nice feature to have in place such as diagnostics over the air (DOTA), but simple features such as an email or text alert when the machine is operating outside of a valid area of operation or when a filter needs changing or a fluid level is low are important items for the longevity and life of the machine. In some cases these are needed to maintain warranties on machines. However, with the ability to be connected to the machine remotely, operational parameters on the machine can be changed (POTA – parameterization over the air), software upgrades can be pushed to the controller on the machine (FOTA – flash over the air), or even possibly the fleet manager wants to look at different data that is available on the machine (SOTA – over the air update to the connectivity unit). All of these are benefits and critical items related to the adoption of the machine being connected. But with that brings the additional challenge of safety and security. Listening to the needs is one part, but understanding that a machine could be hacked or when one should upgrade software on the machine when it is in a safe state or position, is a critical feature that must be considered. Working with the OEM to make available the right informa-

responses submitted by Terry Hershberger, Director, Sales Product Management & eSystems, Bosch Rexroth Corp

tion, in the right time and for the right purpose is critical to the adoption. Again…useful, purposeful data that brings value.

Challenges & Opportunities What are the biggest challenges facing the industry currently, or do you see the industry facing in the coming years? Electrification remains a challenge for the industry. Rotational movements such as propelling a machine have moved much faster with the technique coming over from known, successful platforms in the automotive world. The challenge here still remains replacing the energy that you have used as duty cycles and operation location of a machine determine the longevity and use case. Meaning how quickly before I need to restore potential energy so I can keep working. On the implement side, the challenge is still to replace the power density of the hydraulics. Pumps driven by an electric motor, yes, but movement by a cylinder will still be needed. These are the technical factors but the geo-political environment as well as infrastructure bills both in construction and landscape of the agriculture industry with commodity markets, milk prices, land values, etc… may just be a bigger challenge then technology itself. |

Want more State of the Industry executive interviews? Check out the Table of Contents on pg. 5 to see a complete list of the Q&As we couldn’t fit in print!

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uct

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Smarter and More Capable Engine Designs Continued technology advancements will allow engines to operate more efficiently and in an application-specific manner. Diesel, Electric & Other Power Alternatives What opportunities for technology and efficiency advancements still exist with diesel engines? There are still many opportunities for continued advancements in diesel engines—and we know diesel power has a long life ahead. From the technology side, we’ve leveraged new catalyst technologies and emissions control calibrations to enable the downsizing of aftertreatment. We will continue to focus on improving overall package size, reducing overall engine weight and integrating new generations of electronic control systems. One trend that will continue to evolve in the next few years is less reliance on physical sensors. This is because engine control units continue to become more advanced and enable greater engine control and diagnostics performance. Furthermore, engines will become smarter and more capable—not only in terms of lower emissions or higher power, but by being more reliable to run in the way applications demand. Are there any emissions or other related regulations your company is monitoring, or feel will have an impact on design efforts and the industry? As is typically the trend, we anticipate that the additional NOx reduction standards that are being considered for on-highway will eventually make their way to off-highway regulations. This

will impact the industry as manufacturers continue to keep track of nuanced regulations from country to country while helping their customers manage necessary transitions.

Data, IoT & Connectivity How will the role of the Internet of Things (IoT) and data continue to progress in the coming years? Our business and those of our customers are becoming more competitive and dynamic. We need to move faster and develop tools that deliver greater value for our customers. The John Deere Smart Industrial strategy is designed to unlock new value for customers and help them become more profitable and sustainable, while simultaneously revolutionizing the agriculture and construction industries through the rapid introduction of new technologies. Our track record of technological innovation puts us in a position to anticipate, respond and outpace the industry by offering cutting-edge solutions to enhance customers’ productivity, profitability and sustainability. As a part of this strategy, we utilize the IoT and machine performance data to develop new solutions, particularly for our dealers and customers through John Deere Connected Support. The technology in the Connected Support suite of tools has empowered a shift from reacting to problems after they occur in the field to a proactive approach of anticipating and preventing machine downtime—increasing

responses submitted by Nick Block, Director, Worldwide Marketing & Sales, John Deere Power Systems

productivity by increasing uptime. By studying telematic data generated by the machine, we can gain a better understanding of how current systems and technologies are being utilized by our customers in their various applications. This analysis will help improve the next generation of solutions, further enhancing our customers’ experiences. Regarding how the role of data will grow in the coming years, I believe we’re still in the early stages of the power and applications for telematics solutions. We’re currently piloting our John Deere Connected Support solutions with end-user customers of our OEMs so they can experience the benefits of additional uptime. Advancements in machine uptime and streamlined repairs are made possible by the ability to connect more machines. In the coming years, the importance of identifying trends within fleetwide machines (even around the world) will play a major role in how the use of IoT will progress. More data equates to machines being optimized for their applications and increased productivity and uptime. How do you see connectivity and machine learning changing the vehicle landscape in the next decade? In our Smart Industrial strategy, we also see an even more prominent role for technology as we move forward. Technology will ultimately enable these machines to be more connected and more productive. The key in driving long-term insight and change is in the data collected, both in breadth and depth. |

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Electrification Will Continue to Advance the Off-Highway Industry

responses submitted by Michael Terzo, CEO, Terzo Power Systems, LLC

Electrification is permeating every aspect of the industry, and will an be an integral part of the continued advancement of IoT, connectivity and automation. Global Markets, Government & Trade What are the key global markets your company sees as growth opportunities and why? Medium- and Heavy-duty trucking: Electrification is taking hold of all aspects of transportation. While it might seem to be coming out of nowhere, all the recent activity in the MD/HD space has been going on behind the scenes for quite a few years; we are just seeing the acceleration as OEMs get closer to their start of production dates over the next 2-5 years. Of course, the recent announcement by California of their Advanced Clean Truck rule has brought

this activity into the spotlight. This rule by the California Air Resources Board (CARB) requires OEMs to increase their ZEV (zero-emission vehicle) truck sales beginning in 2024 to 40-70% by 2035. The impact of this rule will have long-lasting impacts on the trucking industry.

Diesel, Electric & Other Power Alternatives What opportunities for technology and efficiency advancements still exist with diesel engines? The major opportunities we see for diesel engines is in hybrid systems where the duty cycle of the appli-

cation still is a difficult proposition for pure electric. Hybrid systems for off-highway equipment provides some incredible advantages for OEMs in terms of performance, fuel efficiency, controllability, and flexibility. What this means to the engine manufacturers is a growth in smaller engine platforms, specifically those engine platforms that work well with a hybrid architecture. A fully decoupled hybrid system utilizes constant speed engines with the best efficiency band while still providing flexibility in integration. We have already seen about a 50% engine size reduction across the board in every hybrid design we have done.

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So, while there will still be a significant market for diesel engines over the next decade, the types and sizes of these engines will change. Unfortunately, a hybrid system does not necessarily need the torque (one of the biggest advantages of a diesel versus gas) since we can match the output of an engine to the permanent magnet motor generator. This opens the door for other fuel types; so diesel manufacturers who also provide multiple fuel engines will see increasing growth. What role is electrification—or other alternative energy/power systems— playing in your company’s design initiatives? Well, since our entire mission is to develop and manufacture the best electrohydraulic solutions for OEMs it’s a pretty big role! While we believe the entire power system for every off-highway vehicle will be fully electric (either via battery, fuel cell, hybridization or a combo of these) over the coming decades, electrification has already permeated every aspect of the off-highway industry and in many instances, it is not for the reasons that many people believe. We can electrify

parts of a system that provide early return on fuel savings or maintenance such as operating a clutch with an electrohydraulic pump versus pulling that circuit off the main hydraulic system. This provides a power-on-demand aspect that would have robbed a lot of efficiency and provided wear and tear issues in a conventional system.

Data, IoT & Connectivity How will the role of the Internet of Things (IoT) and data continue to progress in the coming years? While these are big areas of interest and growth in the off-highway industry, I see that we might not see the true impacts of these areas until we are further down the electrification path. Once you electrify your system, IOT, data and connectivity become much more interesting and powerful for a whole number of reasons. Big Data can allow improved motion control, efficiency, and performance but those benefits are difficult to pencil out with a traditional ICE (internal combustion engine) system. A hybrid or electric system is a different story. I see that electrification will truly enable an explosion in the data, IOT, and connectiv-

ity fields, but that might not be started quite yet. What challenges remain for the continued adoption of data, IoT and connectivity? As I mention above, the true growth of these sectors is just beginning. The largest challenge (which is also the opportunity for those who harness the technology) will be to understand how our industry can easily digest and absorb these new technologies without requiring significant education and/or inconvenience. We all hear how “old school” and “resistant to change” our industry is, but I don’t believe that is the case when you present the technology the correct way to off-highway stakeholders such as OEMs, designers, and executives. |

Watch the Video Watch our video interview with Michael Terzo to learn more about electrification trends and the work his company is doing to electrify off-highway equipment at oemoffhighway.com/21172916.

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Increased Remote Connectivity is Improving Business Capabilities Remote work is helping improve business productivity and overcome some of the industry’s workforce challenges. Impacts of COVID-19 What have been some of the biggest challenges your company, and the industry as a whole, has faced due to the COVID-19 pandemic? I think COVID had positive and negative impacts. Certainly the negative impact of COVID has been more employee related. We got started early on it; given the global [presence] we have, we’ve been in it since December when it started in China. We learned quite a few lessons upfront which we’ve been able to leverage globally. I think people are getting more and more comfortable with video chats,

they’re getting comfortable with remote work. This whole notion of remote connectivity has really taken off. It’s been like that within the organization and also outside the organization. We have many customers who typically would have come into the location whether to do a site survey, or testing; we’ve been able to do all of that remotely. We have implemented a new kind of remote technology on our test stand. For example, we hosted a day at our site for a large OEM [customer] which normally has a lot of aspects to undertake. We were able to mimic exactly what we would do normally. We

responses submitted by Naimesh Dave, President, Oilgear were able to have different functional teams participate accordingly and walk them through and that was very well accepted by the customer. This trend around the ability to now work remotely, connect remotely, there is a long-term impact and it will continue to get supported based on what we see and as a way to attract talent. Have the challenges brought to light any potential opportunities for change or improvement within your company, or the industry? I think the positive and what has improved since is the levels of productivity. Across the board travel has been down internally and for our customers as well. It’s amazing when we step back and think about how much time we used to spend traveling. Some travel is absolutely necessary, but much was really not necessary and we just used to do it because we were used

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Dave,

to doing the travel. I think we’re doing some of that now remotely, which is really supporting productivity; you can really get a lot more done, get more meetings completed, you can achieve quite a bit in a short time frame when not traveling and having the ability to work remotely. I think that’s where we continue to see the improvement. How we are serving the customer, that has shifted and has gotten better too because where we used to be able to do one meeting for a customer now we’re able to do multiple. Some of the tools and diagnostic things we are implementing now—and have been implementing over the last few years around proactive remote networking and remote data collection—that trend has really accelerated and that will be the benefit we’ll continue to see going forward.

Challenges & Opportunities What are the biggest challenges facing the industry currently, or do you see the industry facing in the coming years? One of the biggest challenges the industry was facing prior to COVID, and I think has accelerated, has been around

this whole notion of talent. It’s really hard to find good people or a new generation wanting to continue in [the industry]. It feels like everybody wants to go into technology, and so talent has been [an area where] we struggle. We’ve got a lot of knowledge sitting in some of the team members we have and across the industry, and as they continue to get closer to retirement it’s been a struggle to find the right people and continue to keep up with [industry] knowledge transfer. I think COVID has accelerated that trend even more so. More people have opted to retire and fewer people think about this space, so that’s been a challenge. Which is why what I talked about previously, the ability to do remote data diagnostics and IoT, will provide a resolution to this challenge. And, I think the good thing is, the market is starting to adapt to those new tools. Are there any technologies or trends which you are currently excited about in the heavy-duty vehicle industry, or most looking forward to seeing in the coming years? Data and smart monitoring will continue to accelerate. I think we are barely

at the entry level of that, particularly in the industrial space. We haven’t really matured it, particularly in heavy industries like forging and extrusion. We’re barely getting started. I think that trend will accelerate, and we’re positioned well to participate and be a leader. Outside of that, I think the other thing we continue to see is the continued need for higher pressure. We’ve got a lot of different pumping and valve technology we’re developing with our innovation roadmap to support customers on that, where we see a need for higher pressure applications. The third one, which is a big one that has taken a toll is hybrid and electric [technology]. We’re seeing that pick up a lot more. As customers are pivoting from mechanical to electric and electrohydraulic, we’ve been supporting that transition. So, we’ve got a number of customers across the globe who we’re working with in that transition. |

Watch the Video Watch the full interview with Naimesh Dave at oemoffhighway.com/21174210.

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READ THE FULL INTERVIEW ONLINE AT oemoffhighway.com/21173657

A Shift in Business Operations Brings New Opportunities

responses submitted by Kevin Pung, Chief Customer Officer, Waytek Inc.

The shift to more digital and online interactions has brought about new ways of reaching customers and improving efficiencies. Impacts of COVID-19 What have been some of the biggest challenges your company, and the industry as a whole, has faced due to the COVID-19 pandemic? The three biggest challenges we faced were moving our office staff to a workfrom-home environment, maintaining our warehousing operations in a man-

ner which would keep our employees safe and still allow us to meet customer needs, and maintaining acceptable inventory levels while managing the supply chain disruptions associated with plant closures due to COVID-19 as it spread across the globe.

How has your company worked to overcome these challenges? Within 2 weeks we were able to move our office staff out of the building. This included providing access to the phone and computer system which allowed us to continue to serve our customers at the same proficiency as we did while located within the build-

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Head to the Web ing. Since the onset of the COVID-19 crisis, our warehouse team has been diligently following state and CDC guidelines for cleaning and distancing. This has allowed us to continue operations throughout the pandemic with no downtime due to a COVID infection within our building. With an eye towards the potential disruption in the supply chain, we started to increase our inventory position on most products as the crisis started in Asia and eventually moved to North America. Have the challenges brought to light any potential opportunities for change or improvement within your company, or the industry? We are using Microsoft Teams and

email more for our communications rather than in-person meetings. This has led us to be more efficient in our communications and to limit disruptions to employees. What, if any, long-lasting effects do you think the pandemic could have on the industry? With the shift to a work-from-home environment for many companies, more customers are using the web to interact with us and place orders. Therefore, having a robust, user-friendly website is of ever-increasing importance. We would also expect to see challenges with availability of chassis coming from the auto manufacturers as we finish 2020 and go into 2021. |

In 2019, Waytek partnered with OEM Off-Highway to conduct an industry-wide survey about the impacts of electrification on heavy-duty on- and off-highway equipment. Fifty-nine percent of survey respondents said the trend of electrification has already affected their business and 75% indicated their companies either will or might take steps to pursue electrification over the next year. You can read more about Waytek’s insights from the survey and what it means for the industry at oemoffhighway.com/21069110.

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Toll-free: 800-466-5383 info@madisonco.com OEM Off-Highway | OCTOBER 2020

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S TAT E O F T H E I N D U S T RY

READ THE FULL INTERVIEW ONLINE AT oemoffhighway.com/21174080

The Fluid Power Industry is at a Crossroads New opportunities and technology advancements will continue to drive the fluid power industry forward. Global Markets, Government & Trade What are the key global markets your company sees as growth opportunities and why? Fluid power is in an interesting time. We expected the markets to be down in 2020, but COVID-19 has proven to be a black swan event. While it’s important to acknowledge the challenges everyone has faced throughout the pandemic, we are optimistic about the future. We’re at the bottom of a trough, so it’s easy to see growth across most, if not all, markets. We see signs pointing to a rebound across the mobile equipment landscape, including the agriculture, forestry, construction and material handling segments. The commercial vehicle market is also positioned for a rebound after a deep trough. A number of megatrends underscore this outlook. Population growth, for example, remains a key driver for development in agriculture and construction. While large urban construction projects have slowed in certain parts of the world, maintaining and replacing aging infrastructure is increasingly a focus. This creates an opportunity for versatile equipment, particularly excavator attachments. Urbanization is increasing demand for smaller, more maneuverable equipment, while climate change is driving emissions regulations that are leading to growth in the electrified vehicle space. Ultimately, these megatrends impact our business in the form of

increased digitization and electrified solutions. As was the case following the market crash in 2008, stimulus programs will be areas to watch as we emerge from the pandemic. From infrastructure to green manufacturing, the initiatives in which governments intend to invest is becoming clear. These will present growth opportunities for the industry.

Challenges & Opportunities What are some of the biggest opportunities you see in the industry? While technologies surrounding IoT and automation have been in development for a while, the biggest opportunity now is applying these solutions strategically. We’re developing products for machines that are going to be used for 30 years, in many cases, so our solutions have to anticipate the needs of the customer and provide longterm value. For us, that comes down to supplying durable, intelligent, connected products and software-enabled solutions. Hydraulics has traditionally been a stable, slow-moving industry, but the same can’t be said for this new wave of products. While productivity and efficiency improvements have been more incremental in nature, we’ll see intelligent products and connected solutions grow exponentially in the coming years. The same goes for the advancements companies are making under the umbrella of sustainability. Electrified vehicles and alternative fuel sources such as methane and hydro-

responses submitted by Paulo Ruiz, President, Hydraulics Group, Eaton gen fuel cells will spur new product development. One size will not fit all in these varied machines. At Eaton, we’re partnering with OEMs to understand their direction and develop solutions. A question we’re often asked is whether electric poses a threat. In some cases, it could displace hydraulics, but in many cases it won’t. Hydraulic and electric technologies will coexist in the form of blended power. Are there any technologies or trends which you are currently excited about, or most looking forward to seeing in the coming years? Like many in the industry, we’re fascinated by the spectrum of driver-assist technologies to fully autonomous vehicles. In agriculture first and construction more recently, precision autoguidance has changed the way these industries operate. Already, the technology is improving with new operating systems and display functionalities that leverage real-time data. As a result, we expect the further expansion and adoption of automated solutions in other industries. As COVID-19 has shown us, there’s a greater need for efficiency and connectivity in how we move goods around the world, from manufacturing to warehousing to trucking. Overall, we’re excited about the direction of the hydraulics and off-highway industries. We’re at a crossroads in fluid power, the likes of which we haven’t seen since the first electrohydraulic solutions were developed. Exciting opportunities abound, and we look forward to driving value for OEMs and their end customers by applying our knowledge and blended power solutions. |

OEM Off-Highway | OCTOBER 2020

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z, n

READ THE FULL INTERVIEW ONLINE AT oemoffhighway.com/21173820

Equipment Access Control Becoming Ever More Critical

responses submitted by John Snyder, General Manager, Transportation, Southco Inc.

The importance of controlling access to and monitoring equipment will continue to grow as machine automation and connectivity progresses. Global Markets, Government & Trade What are the key global markets your company sees as growth opportunities and why? Southco is a designer and manufacturer of engineered access hardware with broad industry reach. We service everyone from off-highway and automotive manufacturers to customers in the electronics and healthcare sectors, and we feel we are well positioned for growth. We are seeing a lot of opportunity in entry door and service access in the off-highway industry. The fact that we can give the engineering expertise on the mechanical side, and down the road add electronic access into areas such as entry door and access panels on equipment really has us excited for the future. We also continue to see opportunities where ergonomics and the customer experience are valued. Whether that is getting in and out of vehicles or making it easy to service equipment, our position control arms and counterbalance mechanisms maintain their functionality in even the most rugged environments, while creating a more comfortable experience for the operator.

Data, IoT & Connectivity How will the role of the Internet of Things (IoT) and data continue to progress in the coming years? There are not many parts of our lives that haven’t been affected by IoT and extensive use of data analytics. What we see in many industries is that

security of that data is physical as well as electronic. When you have large off-highway equipment, and you have long-term potential move to more autonomous equipment, securing that equipment and the data that drives the equipment becomes even more important. We are already seeing this with robotic, autonomous delivery vehicles and in 5G infrastructure. You can’t have just anyone accessing data that is driving these vehicles. So we are working towards not only securing equipment physically, but also controlling access to that equipment and monitoring it. The security of equipment on the jobsite may be even more critical. For instance, we recently launched an electronic version of our popular entry door latch that has electronic locking functionality, which eliminates the need for mechanical key access when connected to a remote access controller, such as a key fob, or to an existing control system, such as a button located within a vehicle’s interior. This product facilitates the upgrade from traditional mechanical access to electronic access control, which enhances physical security of entry doors and specialty vehicle storage panels through direct, single or multipoint actuation of a connected latch. People are already used to electronic access with home and vehicle security, and this is a natural extension of that.

Challenges & Opportunities Are there any technologies or trends which you are currently excited about, or most looking forward to seeing in the coming years? The industry may have taken a hit due to the pandemic, but product development hasn’t slowed down for us at all. Our off-highway customers continue to innovate, and that’s exciting. We continue to focus on ways to make our customers and their equipment better, and one of the areas where we are making an impact is with our Counterbalance Systems. We have seen our customers benefit from our Counterbalance Systems, which use torsion elements to lift very heavy doors and panels. Counterbalance solutions provide precise and reliable position control for the lifetime of the application by neutralizing the weight of very heavy panels, enabling them to be lifted and lowered by the operator with ease. When not in use, the mechanism is hidden underneath the panel and out of view, allowing a clean surface that does not interrupt the overall aesthetic design of the equipment and reduces the threat of vandalism. |

Watch the Video Watch the full interview with John Snyder for more of his insights into current and future trends at oemoffhighway.com/21174208.

OEM Off-Highway | OCTOBER 2020

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AD INDEX

Statement of Ownership, Management, and Circulation

(Requester Publications Only)

1. Publication Title

Advertiser............Page # Briggs & Stratton................................22-23

2. Publication Number

OEM Off-Highway

752-770

September 15, 2020

4. Issue Frequency

5. Number of Issues Published Annually

6. Annual Subscription Price

Jan/Feb, Mar, Apr/May, Jun/Jul, Aug/Sep, Oct, Nov/Dec

Free to Qualified Subscribers

7. Complete Mailing Address of Known Office of Publication (Street, City, County, State, and Zip+4)

Contact Person

AC Business Media 201 N. Main Street, 5th Floor Fort Atkinson, WI 53538-1807

Telephone

Angela Franks

(920) 542-1259

Cummins Engine Company Inc...................7

8. Complete Mailing Address of Headquarters or General Business Office of Publisher

Curtis Instruments, Inc........................28-29

9. Full Names and Complete Mailing Addresses of Publisher, Editor, and Managing Editor

ENM Company..........................................40 Grand Bending......................................... 13 Isuzu Motors America.......................... 32-35

3. Filing Date

AC Business Media, 201 N. Main Street, 5th Floor, Fort Atkinson, WI 53538-1807

Publisher (Name and Complete Mailing Address)

Sean Dunphy, Group Publisher 201 N. Main Street, 5th Floor Fort Atkinson, WI 53538-1807 Editor (Name and Complete Mailing Address)

Sara Jensen, Editor 201 N. Main Street, 5th Floor Fort Atkinson, WI 53538-1807 Managing Editor (Name and Complete Mailing Address)

Kawasaki Precision Machinery (U.S.A.), Inc.............................................. 17 Madison Company..............................36-37 Nokian Tyres...............................................3 Schroeder Industries................................44 Siemens Digital Industries Software........ 41

10. Owner (Do not leave blank. If the publication is owned by a corporation, give the name and address of the corporation immediately followed by the names and addresses of all stockholders owning or holding 1 percent or more of the total amount of stock . If not owned by a corporation, give the names and addresses of the individual owners. If owned by a partnership or other unincorporated firm, give its name and address as well as those of each individual owner. If the publication is published by a nonprofit organization, give its name and address.) Full Name

Complete Mailing Address

ACBM, LLC, Barry Lovette, CEO

201 N. Main Street, 5th Floor, Fort Atkinson WI 53538-1807

11. Known Bondholders, Mortgagees, and Other Security Holders Owning or Holding 1 Percent or more of Total Amount of Bonds, Mortgages or Other Securities. If none, check here.  None Full Name

Complete Mailing Address

SPAL USA.................................................. 11 TE Connectivity Ltd.................................. 43 Waytek.......................................................2

12. Tax Status (For completion by nonprofit organizations authorized to mail at nonprofit rates) . (Check One) The purpose, function, and nonprofit status of this organization and the exempt status for federal income tax purposes:

 Has Not Changed During Preceding 12 Months  Has Changed During Preceding 12 Months

PS Form 3526-R Facsimile, July 2014 13. 13. Publication Publication 13.Title Title Publication Title

14. 14. Issue Issue Date Date 14. for for Issue Circulation Circulation Date forData Data Circulation Below Below Data Below

OEM Off-Highway OEM Off-Highway

www.enmco.com Go to www.enmco.com/L3L4promo and enter the promotional code L3L4promo for a 50% discount off the $40.00 list price.

August/September August/September 2020 2020

15. 15. Extent Extent and and 15.Nature Nature Extentof ofand Circulation Circulation Nature of Circulation

Average Average No. No. Copies Copies Average No. Copies No. No. Copies Copies of of Single No. Single Copies of Single Each Each Issue Issue During During Each Issue During Issue Issue Published Published Issue Published Preceding Preceding 12 12 Months Months Preceding 12 Months Nearest Nearest to to Filing Filing Nearest Date Date to Filing Date

a. a. Total Total Number Number a. Total of of Copies Copies Number (net (net ofpress press Copies run) run) (net press run) Outside Outside County County Outside Paid/Requested Paid/Requested County Paid/Requested Mail Mail Subscriptions Subscriptions Mail Subscriptions stated stated on on stated on

22297

21417

14650

14639

201

212

14852

14851

2504

2455

(1) (1) PS (Include direct written written (Include request request direct from from written recipient, recipient, request telemarketing telemarketing from recipient, and andtelemarketing and PS Form Form(1) 3541. 3541. PS(Include Formdirect 3541. Internet Internet requests requests from from Internet recipient, recipient, requests paid paid from subscriptions subscriptions recipient, paid including including subscriptions nominal nominal including rate rate subscriptions, subscriptions, nominal rate subscriptions, b. b. Legitimate Legitimate b. Legitimate employer employer requests, requests, employer advertiser's advertiser's requests, proof proof copies, advertiser's copies, and and exchange proof exchange copies, copies.) copies.) and exchange copies.) Paid Paid and/or and/or Paid and/or

Requested Requested

Requested (2) (2) In-County In-County (2)Paid/Requested Paid/Requested In-County Paid/Requested Mail Mail Subscriptions Subscriptions Mail Subscriptions stated stated on on PS PSstated on PS

Distribution Distribution Distribution clude clude direct direct written written request request direct from from written recipient, recipient, request telemarketing telemarketing from recipient, and andtelemarketing internet internet and internet Form Form 3451. 3451. (In (In Form 3451. (Include (By (By Mail Mail

(By Mail

requests requests from from recipient, recipient, requests paid paid from subscriptions subscriptions recipient, paid including including subscriptions nominal nominal including rate rate subscriptions, subscriptions, nominal rate subscriptions,

employer employer requests, requests, employer advertiser's advertiser's requests, proof proof copies, advertiser's copies, and and exchange proof exchange copies, copies.) copies.) and exchange copies.) and and Outside Outside and Outside

the the Mail) Mail)

the Mail) (3) (3) Sales Sales Through Through (3) Sales Dealers Dealers Through & & Carriers, Carriers, DealersStreet Street & Carriers, Vendors, Vendors, Street Counter Counter Vendors, Counter Sales, Sales, and and Other Other Sales, Paid Paid andor orOther Requested Requested Paid ordistribution distribution RequestedOutside Outside distribution USPS. USPS. Outside USPS. (4) (4) Requested Requested (4) Copies Copies Requested Distributed Distributed Copiesby by Distributed Other Other Mail Mailby Classes Classes Other Mail Classes Through Through the the Through USPS. USPS. (e.g. (e.g. thefirst-Class first-Class USPS. (e.g. Mail) Mail) first-Class Mail)

c. c. Total Total Paid Paidc. and/or and/or TotalRequested Requested Paid and/orCirculation Circulation Requested Circulation [Sum [Sum of of 15b(1), 15b(1), [Sum (2), (2),of(3), (3), 15b(1), (4)] (4)] (2), (3), (4)] (1) (1) Outside Outside (1) County County Outside Nonrequested Nonrequested County Nonrequested Copies Copies stated stated Copies on on PS PSstated form form 3541. 3541. on PS form 3541. (include (include sample sample copies, copies, (include requests requests sampleover over copies, 33 years years requests old, old, requests requests over 3 years induced induced old, by by requests aa premium, premium, induced by a premium, bulk bulk sales sales and and requests requests bulk sales including including and requests association association including requests, requests, association names names obtained obtained requests,from from names obtained from d. d. Nonrequested Nonrequested d. Nonrequested business business directories, directories, business lists, lists, and and directories, other other sources) sources) lists, and other sources) Distribution Distribution Distribution

(By (By Mail Mail

(By Mail (2) (2) In-County In-County (2)Nonrequested Nonrequested In-County Nonrequested Copies Copies stated stated Copies on on PS PSstated form form 3541. 3541. on PS form 3541.

(include (include sample sample copies, copies, (include requests requests sampleover over copies, 33 years years requests old, old, requests requests over 3 years induced induced old, by by requests aa premium, premium, induced by a premium, and and Outside Outside and Outside

the the Mail) Mail)

the Mail)

bulk bulk sales sales and and requests requests bulk sales including including and requests association association including requests, requests, association names names obtained obtained requests,from from names obtained from business business directories, directories, business lists, lists, and and directories, other other sources) sources) lists, and other sources)

(3) (3) Nonrequested Nonrequested (3) Nonrequested Copies Copies Distributed Distributed CopiesThrough Through Distributed the the Through USPS USPS by bythe USPS by (e.g. (e.g. First-Class First-Class Mail, (e.g.nonrequestor nonrequestor First-Class Mail, copies copies nonrequestor mailed mailed in in copies mailed in Other Other Classes Classes Other of of Mail. Mail. Classes of Mail.Mail,

934

excess excess of of 10% 10% Limit Limit excess mailed mailed of at 10% at Standard Standard Limit mailed Mail Mail or or atPackage Package StandardServices Services Mail or Package Rates) Rates) Services Rates)

(4) (4) Nonrequested Nonrequested (4) Nonrequested Copies Copies Distributed Distributed CopiesOutside Outside Distributed the the Mail Mail Outside the Mail (include (include pickup pickup stands, stands, (include trade trade pickup shows, shows, stands, showrooms, showrooms, trade shows, and and other other showrooms, sources) sources)and other sources)

e. e. Total Total Nonrequested Nonrequested e. Total Nonrequested Distribution Distribution (Sum (Sum Distribution of of 15d 15d (1), (Sum (1), (2), (2), ofand and 15d(3)) (3)) (1), (2), and (3))

Self Powered LCD Counter/Timer

L3/L4 Series

f.f. Total Total Distribution Distribution f. Total (Sum (Sum Distribution of of 15c 15c and and (Sum e) e)of 15c and e)

3438

2496

18290

17347

g. g. Copies Copies Not Not g.Distributed Distributed Copies Not Distributed

511

492

h. h. Total Total (Sum (Sumh.of ofTotal 15f 15f and and (Sum g) g)of 15f and g)

18801

17839

i.i. Percent Percent Paid Paid i. Percent and/or and/or Requested Requested Paid and/orCirculation Circulation Requested Circulation

81.2%

85.6%

(15c (15c // 15f 15f xx 100) 100) (15c / 15f x 100)

Statement of Ownership, Management, and Circulation

*if *if you you are are claiming claiming *if you are electronic electronic claiming copies, copies, electronic go go to tocopies, line line 16 16 go on on to page page line3. 3.16IfIfon you you page are are 3. not notIfclaiming claiming you are not electronic electronic claiming copies, copies, electronic skip skip to copies, to line line 17 17 skip on on to page page line3. 3.17 on page 3.

PS PS Form Form 3526 3526 PS -R Form -R Facsimile, Facsimile, 3526 -R July July Facsimile, 2014 2014 July 2014 16. Electronic Copy Circulation

L3/L4 Series MADE IN THE U.S.A

e-mail: customerservice@enmco.com e-mail: TOLL FREE 888-372-0465 customerservice@enmco.com

No. Copies of Single

Each Issue During

Issue Published

Preceding 12 Months

Nearest to Filing Date

3,482

3,578

b. Total Requested and Paid Print Copies (Line 15C) + Requested/Paid Electronic Copies (Line 16a)

18,334

18,429

c. Total Copy Distribution (Line 15F) + Requested/Paid Electronic Copies (Line 16a)

21,772

20,925

a. Requested Electronic and Paid Electronic Copies

Self Powered LCD Counter/Timer

( Requester Publications Only)

Average No. Copies

d. Percent Paid and/or Requested Circulation (Both Print & Electronic Copies) (16b divided by 16c X 100)

84.2%

88.1%

x I certify that 50% of all my distributed copies (electronic & print) are legitimate requests or paid copies 17. Publication of Statement of Ownership for a Requester Publication is required and will be printed in the October issue of this publication. 18. Signature and Title of Editor, Publisher, Business Manager, or Owner

Barry Lovette, CEO

Date

09/15/2020

I certify that all information furnished on this form is true and complete. I understand that anyone who furnishes false or misleading information on this form or who omits material or information requested on the form may be subject to criminal sanctions (including fines and imprisonment) and/or civil sanctions (including civil penalties).

PS Form 3526 -R Facsimile, July 2014

OEM Off-Highway | OCTOBER 2020

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9/18/20 12:15 PM

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9/18/20 8:55 AM

OFF-HIGHWAY HEROES

The FIRST ARTICULATED Motor Grader Adding an articulated frame to motor graders helped to improve maneuverability in confined spaces and reduce rework.

DEERE & COMPANY BROCHURE A-1733, 1967, HCEA ARCHIVES

oemoffhighway.com/21173086

by Thomas Berry, Archivist, Historical Construction Equipment Association

rom their inception in 1919, motor graders were strictly rigid frame, and the only innovation to help maneuverability and reduce turning radii was the Austin-Western all-wheel steer that we examined in the last issue (learn more, 21158878). All this changed with John Deere’s 570. Introduced in 1968, the 570 was the first motor grader with an articulated frame. While it worked perfectly well in wide-open, straight-ahead blading, the articulation gave it a major advantage in confined areas. Hydraulic side shift of a motor grader’s moldboard did much to increase its ability to reach the blade away from the grader’s path of travel, such as for sloping, ditching and working around obstacles. But side-shift could only reach so far, and good luck blading in such places as a narrow cul-de-sac or within the corner of two curbs! The 570 addressed this problem with a 22-degree articulation left and right. Its turning radius was only 18 ft. (5.5 m), compared to 36 (11 m) for the rigid-frame Cat No. 12-F which had a

An early Deere 570 shows its ability to blade into close quarters.

similar 12-ft. (3.7 m) moldboard and was only 30 in. (0.76 m) longer. The 570 had an exclusive lock-unlock differential that allowed the inside and outside wheels to move at different speeds, eliminating wheel spin and skidding. Combined with the now-standard fully hydraulic blade, it could reach into places other grader operators could only look at, with the operator steering with one hand and manipulating the blade with the other.

This combination of maneuverability, side shift and non-spin differential had several cost advantages. Manual labor was greatly reduced; drive chain, sprocket and tire wear were reduced; less time was wasted on reverse moves; and there was no need for a smaller grader just to get into tight areas. Because of these advantages, articulated frames became standard for almost all motor graders. |

The Historical Construction Equipment Association (HCEA) is a 501(c)3 non-profit organization dedicated to preserving the history of the construction, dredging and surface mining equipment industries. With over 3,800 members in over a dozen countries, activities include publication of a quarterly educational magazine, Equipment Echoes, from which this article is adapted; operation of National Construction Equipment Museum and archives in Bowling Green, OH; and hosting an annual working exhibition of restored construction equipment. The 2020 show has been postponed to August 27-29, 2021, in Concordia, KS (learn more, 10598970). Annual individual memberships are $35.00 U.S. within the USA and Canada, and $55.00 U.S. elsewhere. HCEA seeks to develop relationships in the equipment manufacturing industry, and offers a college scholarship for engineering and construction management students. Information is available at www.hcea.net, by calling 419-352-5616 or e-mailing info@hcea.net. Please reference Dept. OEM.

OEM Off-Highway | OCTOBER 2020

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9/18/20 10:39 AM

DEERE & COMPANY BROCHURE A-1733, 1967, HCEA ARCHIVES

ACCELERATING HYBRID & ELECTRIC MOBILITY IN COMMERCIAL TRANSPORTATION

Electrification of the powertrain and accessory applications for trucks, buses, construction, agricultural & recreational vehicles is taking the commercial transportation industry by storm. It requires reliability in harsh environment connectivity, optimized design of scalable sub-systems and application support for integrated component solutions. Learn more at www.te.com/ictHEMS

www.TE.com

OOH1020_42-44_Heroes_SJ.indd 43

9/18/20 10:39 AM

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OEM Off-Highway October 2020

Articles inside

John Deere Power Systems: Nick Block, Director

Oilgear: Naimesh Dave, President

Bosch Rexroth: Terry Hershberger, Director, Sales Product

Waytek: Kevin Pung, Chief Customer Officer

Terzo Power Systems, LLC: Michael Terzo, CEO

Schaeffler: Brian Kreifels, Vice President OEM Sales North

CNH Industrial: Jay Iyengar, Chief Technology Officer

Committee for European Construction Equipment