MAY DAYS

Industry People

Michael May clearly knew something the rest of the industry didn’t, and that was that his new job would see a different reporting structure and different responsibilities to his predecessors at Iveco. It came as part of an offer from the global boss of Iveco, Gerrit Marx, a German ex Daimler and Bain Capital executive, who became president of Iveco commercial and specialty vehicles in January 2019.

Marx came into his role on the back of a restructure for CNHI (Case New Holland Industrial), the parent company of Iveco. To put it crudely, rather than being overseen and ruled by the ‘tractor salesmen’ who formerly ran the business, Marx now oversees the commercial vehicle business and rather than being a division of the ‘ag machine’ operation in Australia May reports to Marx at Iveco HQ in Italy and is also responsible for not just Australia but SE Asia and the Pacific.

Asked directly why he made the move Michael May was straight and to the point “It definitely was a challenge that interested me, I was approached out of Italy, and it was a different mindset, than leadership within Iveco in the last few years,” said May.

“If you take a look at the top we’ve got Gerrit Marx as our new CEO, and that signalled a change from what I can tell, I’ve been here nine months now and it’s clear that the company really wants to forge a new direction,” he added.

“So for me, it was really about a potential to turn this business back to what it once was in our industry. Iveco and the history of the company goes a long way back and has some really good legacy reputation and for me, I’m attracted to that,” said May.

May said he sees the potential there, and added that the company is talking in an innovative and an entrepreneurial way at the top, and that’s what attracted him to the role.

He is at pains to point out that the spin off of Iveco from CNHI, means the corporate structure for his predecessors was different to the one he now works within.

“They (his predecessors) were really managing the brand and the sales application, and Gerrit Marx wanted somebody as the head of Iveco for the region to oversee all of the business,

WHEN NEWS BROKE LATE LAST YEAR THAT MERCEDES BENZ TRUCKS BOSS, MICHAEL MAY HAD DECIDED TO LEAVE THE DAIMLER BEHEMOTH AND TAKE UP A NEW ROLE AS CEO OF IVECO AUSTRALIA, SOME INDUSTRY OBSERVERS INITIALLY WERE SCRATCHING THEIR HEADS, WONDERING WHY HE WOULD CHOOSE TO MAKE THE MOVE TO A TRUCK COMPANY THAT HAD BEEN BURDENED WITH A ‘REVOLVING DOOR’ OF CEOS IN RECENT YEARS. WE SAT DOWN FOR A CHAT WITH MAY TO FIND OUT WHY HE TOOK UP THE CHALLENGE.

and that was attractive to me,” he adds.

“I don’t think I would have been interested unless that was happening and it’ll be really about us building this brand again to stand alone, which is something I’ve had some experience with other brands and, I just thought the timing was right,” Michael May said

May spent 20 years with Daimler and says it was probably a point in his life where he questioned whether he should stay or go, not because there was anything wrong with his role at Daimler. Many pointed to the fact that May could have possibly been the next MD of the local Daimler operation, replacing Daniel Whitehead if he was likely promoted to a more senior role the Daimler world.

“I asked myself, “well, what do I do? Do I go now or just keep going and going?” I thought it was a great move, and I haven’t changed my view on that at all. I’m still really pleased by it, and the structure of reporting directly to Italy, not just to part of our brand here in Sydney at CNH, that is a major plus,” said Michael.

With the weight of globalisation and a rapid reduction of manufacturing in Australia, due to economic rationalism, which has been most obviously manifested in the shutdown of car manufacturing, May’s arrival at Iveco coincides with increasing chatter about its long term future as a local truck assembler/manufacturer.

Asked if he thought Iveco would continue to make trucks in Australia and what the future of truck manufacturing might be in this country, May said he believes that while there are challenges, local manufacturing does deliver some distinct advantages.

“I definitely think it’s challenging, there’s no two ways about that, but I do think it poses real advantages, and when you talk about what attracted me to the role at Iveco, I think as an engineer originally that is exciting for me,” said May.

“I think Iveco has really good depth and skill in engineering and the support functions developed over many, many years, particularly with the ACCO being such a strong leader, it’s actually amazed me the amount of skill, passion and the people who are entrenched within our whole industry that know and connect to our brand,” he said.

“I think we probably will see ourselves

evolving to different things, but manufacturing still needs to remain a core for us. From Iveco’s perspective, what I see is an opportunity within manufacturing that involves flexibility and customisation.

“If we can really leverage that and our skillsets then that’s how we need Iveco’s manufacturing mindset to evolve, I think that’s exciting,” he added.

“We talk about our high loads and high temperature testing, validation, and stuff like that, I’ve got a whole bunch of really talented engineers in that space, so why shouldn’t we test for American or European applications here in their off season? I reckon there’s really good leverage opportunities,” he said.

“I believe we have to disrupt, we’re a smaller manufacturer, we’re not as big as the others, and I think we’ve taken a slightly different tack on how we partner to do that and the type of models we apply it to, not just to the easy solutions, we’re applying it to the highway product, which is challenging, but it’s real,” he adds.

Interestingly Iveco has made a major investment in, the at times controversial, but always interesting US zero emission truck start up, Nikola. While May was careful in what he said about the Nikola Iveco tie up, he is clearly enthused about the opportunities it may present, particularly here in Australia

“The whole topic of hydrogen, is just an exciting opportunity, right? You can talk about it for hours, but we need to be prepared as a company in that space, and I think Gerrit’s shown that he’s willing to do that with the decisions he’s made with the Nikola partnership,” said May.

Asked whether he could see Iveco in Australia potentially being the sales channel for Nikola fuel cell trucks and May’s face lit up, clearly excited by the prospects and opportunities that could provide.

“Yeah, most definitely. I mean, that’s probably not an official response as yet, but that’s most definitely the goal,” May said.

“We’ve definitely had contact about it from fleets and it’s super interesting, people are excited by it, and you know what? The marriage, particularly of the truck and the product in Europe, is really based on models that are similar to what we sell here,” he adds.

May again enthuses about the engineering resources available at Iveco in Dandenong adding that there is a team of really skilled people who equip the company well for a hydrogen future.

“We have highly qualified engineers, all these great people, we just need to leverage that towards where we see ourselves going with Nikola and fuel cell, and some of the hydrogen investments that are potentially available from the government,” he adds.

May has been around the truck industry long enough to know and understand that bold promises and boasts often prove to be disappointments with the loudest promises often failing to materialise.

“I’ve been around this group for a while, and we’ve seen things come and go and come and go, but I see this not going. It’s just a matter of how quickly Australia can catch on, and how quickly our government can make decisions about infrastructure and legislation,” said May.

“Incentives drive this sort of stuff, but as I see it, we just need to take what Iveco has on offer through Nikola and other channels, leverage our local skillsets, get better connected with the companies that are really talking about green hydrogen particularly, and make sure we’re really pushing that as a leader.

“We’ve got an opportunity to not just join on but leapfrog, because I think this company as a whole is in a really exciting space,” he adds.

May admits that he hasn’t had a chance since joining Iveco, to see what the tie up with Nikola will look like up close, that

opportunity evaporated with Covid when Iveco had planned to unveil some details of its road map for Nikola at the cancelled Hanover Truck Show, which was planned for September. He says that once airports and air routes open again he will be there to take a closer look at the excitement that is pulsing through Iveco internationally.

“The excitement and the belief is real, which is why I find what Gerrit Marx is doing in trying to take this whole thing forward so exciting, because it’s going to change something for the entire industry,” May said.

The Covid crisis has affected every aspect of our lives across the globe since March and in Australia no state has been more affected than Victoria, where Iveco’s Australian HQ is located making it difficult for a newly arrived CEO to really get his teeth into the task of taking over running the company.

May said Iveco took early warning signs as an Italian company, because Italy and Spain, along with China were arguably the hardest hit nations in the first phase of the pandemic. After resigning from Daimler in late 2019, May took ‘gardening’ leave for a couple of months, joining Iveco just as the crisis started to emerge on a global scale. “I started at Iveco in February, and six weeks in we started seeing the problems, but before that Italy had already been hit with it, along with Spain, where one of our major production facilities is, so, here I was having just joined and watching it unfold in Europe, initially it impacted us from a parts and vehicle supply perspective,” he said.

Despite that and all of the severe lockdowns in Victoria in recent months May says Iveco is in pretty good shape on the whole from a stock perspective.

“It wasn’t an immediate impact felt by our network or by our customers, it was just something that we had to manage, and I think we were ahead of the curve, because it takes a big toll when you close down and in Italy and Spain they closed down which meant we were ahead of the curve in preparation so fortunately we have been able to keep things moving”.

May says the issues in Italy gave the Australian operation an insight on how to protect its staff, and that this was the first and foremost imperative, making sure that Iveco staff were safe.

“We’ve had pretty some good preventative logic, even prior to the Victoria governments contols, which has done a pretty good job too, I must say,” May added.

The shutdowns impacted Iveco production supply and May says the company made a decision early on to continue with production, even though Volvo and Paccar both closed down for various periods.

“We made the call that we would be better to stay open because we didn’t want to stop, but kept going, reducing what we did, bringing our production rate down to three days a week while maintaining the safety for our workforce,” said May.

“That turned out to be a good move, and we’re still running at that rate and with heavy trucks in particular being an essential service it’s been very good, in that we can continue to keep our staff employed and continue the supply of vehicles, finding a better balance of our stock,” he added. “If you can work from home you must, is the wording we read, and the thing is that as soon as I rock up to the office I notice that about ten other people follow me, so it’s about making sure we do the right thing,” May said.

“It is really vital to set the right example and keep away from the heavy fines, and also the risk of spreading the disease, it’s been pretty intense in Victoria during the lockdown,” he added.

“Those early days in April were probably when we really saw it impact us, our business, our staff, the way we go about business and most of my team’s been working remotely, other than the factory guys and I give special permission for people to go into the office for particular reason, but we maintain all the safety protocols,” he said.

May said that things have since bounced back, making things interesting and informing Iveco about how it can learn from this.

“I’ve been on meeting calls back to back, it’s been really interesting for me, particularly connecting in with Europe on a daily basis which has meant doing much more over the phone.

“It would have been nice to actually get my feet on the ground in Italy, to meet some of the key people face to face, but it’s been no problem at all, and we will be looking at things different after this I would suggest”.

A corporate blow for Iveco Australia that happened to coincide with Covid was the announcement by Navistar that it would not continue selling International trucks in Australia after the current Prostar ceases production at the end of the year. While Iveco has been the distributor of the International brand again for the past couple of years the numbers have been meagre, in fact hardly bothering the scorer with its small monthly sales tallies.

The announcement had longer, more embedded historic significance for Iveco, given its Australian plant at Dandenong was once International’s factory before the Italian company bought it from the cash strapped American truck maker in the 1990s.

“I think for us it was disappointing because International has such a strong tie here, fact is we’re not just Iveco, this operation grew out of what was International’s Australian operation and the number of people I’ve spoken to within dealers that have had a link, or have come through our facility when it was International is remarkable,” said May.

“It’s definitely disappointing for us, and actually we were starting to get some traction with Prostar, the product was not doing as well as it needed to from my perspective, and probably from the US perspective and I’m still reflecting on it,” he adds.

“There was massive potential for International and now it’s wasted, whether or not Navistar made the right decision strategically or not, it’s really not for me, to comment,” said May

What the new boss does have to work with is probably the best product spread of any truck/heavy commercial vehicle company operating in Australia, with everything from the extensive Daily van and cab chassis light duty truck range, through the Eurocargo medium duty models and the Stralis heavy models, as well as buses.

“I reckon for us as a company we have to focus now on our brand and we need to really refine where we fit and what we stand for as a value proposition to our customer, because I don’t think it’s 100 per cent clear,” said May.

“It’s becoming clearer to me we’ve got really good reliability, and really good product but no one knows about it, that included me before I came here.

“We’ve got a strong network but we need to simplify what we offer for customers so they see that value, and double down on our brand and what we stand for,” he added.

“Our product spread has amazed me, and we talk around the heavy end and we’ve got opportunity there which we’ll continue to exploit, we’ve got some gaps in the B-double space and what not, but we’re in a phase of testing into that space now and we have the skills locally to do it and we’re getting a bit more freedom now that we’re gaining the trust of Iveco HQ,” he said.

May believes the company has to do more with its medium-duty Eurocargo offering and to take the fight up to the Japanese brands that dominate the medium sector.

“The Eurocargo is an amazing product and it’s got the potential to go up against a Japanese-dominated space, but we need to get our act together and convince people

that if you or I had to go and drive trucks all day in that space, this is the truck you’d pick,” said May.

“That makes it very easy for us to sell, in my view, and we need to refine it, make it very, very basic and easy for our customers and our network to understand that it is a leader in emissions and safety, because it really is, it’s got all of that and more in that space, so I only see potential there,” he adds.

May also believes the Daily provides opportunity for the brand offering a variety of options and opportunities across the light duty sector.

“There’s a massive opportunity for us with the Daily, which is a big and growing part of our business, and an advantage because it’s more like a truck-based Euro 6 platform with all of the safety features, and it puts us into spaces that we have really just let go to the Japanese,” said May.

“We can get in there, with a seven-tonne capability which we have probably not exploited as well as we could, because it’s got carrying capacity that no one else has.

“These are things that I’m seeing and I think it’s handy to have some fresh eyes come in and say ‘wow, this is real opportunity.”

The departure from Iveco’s line up last year of its original Australian developed ACCO which has dominated the waste and concrete agitator market for decades which many observers believe has left an issue for the company. However Michael May, as would be expected, still puts a positive spin on the ‘new’ Euro based ACCO. This despite the fact that the industry perceives the new ACCO as both too heavy and overpriced, which has seen other brands including Isuzu, Dennis Eagle, Mercedes Econic and Volvo moving to pick up ACCO buyers.

“The ACCO’s been great, we’ve got the new waste truck and the E6 ACCOs really gaining good traction now in a more competitive waste market,” said Michael.

“I know from my past and other brands are starting to punch into that space, but we’re finding what we’ve gained over the last 50 years of dominating this space is valid and useful, and we are really getting good feedback on efficiency and manoeuvrability around ACCO, which is very promising,” he added.

Another area May believes Iveco has some advantages to exploit is in the allwheel drive, 4x4, 6x6 and 8x8 truck sector where it has coverage from light all the way to heavy duty.

“Starting with the Astra at the top, which is an area that we can get into more really heavy duty off road applications, I mean really heavy, wide, awesome products, we had one land the other day with a massive tipper on the back, for work in mines, they are unbelievable, and they’re rock solid,” he said.

“So, together with Magirus which is also an Iveco owned company and the Daily light-duty four-by-fours, again we have great coverage and the people I speak to around these products love them.” May says he is making some structural changes and some people have left the business.

“I’ll be bringing some other people in and looking at special vehicle and bus as well, because we’ve got a really good bus product particularly off Daily, which can go right up against the Japanese 22 seat Toyota Coaster and Fuso Rosa models, so we’ll be focussing on these business lines,” he said.

With all that May is adamant he is in for the long haul and that famous Iveco ‘revolving door of MDs’ is over.

“This is not a quick win, there are quick wins, but I’m really setting the task and I’ve been given the scope to set milestones that are reasonable for sustained growth and partnership,” he said.

“If we set those as goals and visions, we’ll get there, and I don’t want to just flash in the pan and grab a bunch of numbers at the end of a year and move on, that’s not what’s driving me,” May concluded.

You get the feeling that Michael May is a fresh start for Iveco in Australia, we have no doubt that he can last the distance, let’s hope that Iveco can live up to his expectations and its promise.