Jewel in the Crown:

Aus­tralian car mak­ing has hit the wall, but when it comes to trucks, Pac­car Aus­tralia’s world-class Ken­worth fac­tory stands de­fi­antly proud and supremely suc­cess­ful. In his first in­terview, man­ag­ing di­rec­tor An­drew Had­jikakou talks ex­clu­sively with Steve

Deals on Wheels - - Contents -

Steve Brooks speaks to Pac­car MD An­drew Had­jikakou

It’s one of those things where you just have to see it to truly ap­pre­ci­ate it. Such is Pac­car Aus­tralia’s head­quar­ters and pro­duc­tion fa­cil­ity in Bayswa­ter, an hour or so east of Mel­bourne in the shad­ows of the Dan­de­nong foothills. It’s where Ken­worths are made for Aus­tralia, New Zealand and Pa­pua New Guinea and it is, be­yond any shadow of doubt, the jewel in the Ken­worth crown.

Still, get­ting a tour ticket isn’t easy. In fact, it can cost hun­dreds of thou­sands, if not mil­lions of dol­lars. You see, most times you need to be a cus­tomer – or a highly likely prospec­tive cus­tomer – to be given the nod for an es­corted tour through the plant. Or, you’re part of an in­vited en­tity that has the ca­pac­ity to at least com­pre­hend the ex­tent of the Bayswa­ter fa­cil­ity and sub­se­quently im­part that knowl­edge for the greater good of Pac­car and Aus­tralian man­u­fac­tur­ing, gen­er­ally. An in­dus­try leader, a politi­cian, a spe­cial in­ter­est group, or, very oc­ca­sion­ally, the press.

Two things are cer­tain, how­ever. Cam­eras are not al­lowed in­side the fac­tory, and com­peti­tors are not wel­come. Ever! Some years back, the man­ag­ing di­rec­tor of an­other truck brand, who had sev­eral times heard glow­ing praise of the Bayswa­ter plant’s prow­ess as a world-class cus­tom-builder, asked if I thought his Pac­car coun­ter­part would agree to show him through the fac­tory. “Don’t waste the phone call,” he was ad­vised. Not to be swayed, he made the call any­way, and for­ever af­ter de­lighted in re­call­ing the story of the most elo­quently po­lite ren­di­tion of ‘piss off’ he’d ever known. Se­ri­ously, a true story.

Some may say the seem­ing ex­clu­siv­ity of fac­tory vis­its is all part of a care­fully man­aged cor­po­rate doc­trine to pro­tect the Ken­worth im­age, even mystique. Per­son­ally, I think not! It’s pro­tec­tion, for sure, but of the purely com­mer­cial kind, and if that gen­er­ates a cer­tain im­age or mystique, then so be it.

The truly sur­pris­ing fact, how­ever, is that plant tours are not nearly as rare as some may think. In­deed, in 2015, Pac­car Aus­tralia says it hosted an as­ton­ish­ing 349 plant tours, and as one Ken­worth se­nior ex­ec­u­tive re­cently em­pha­sised: “This plant

is a huge as­set … the most ef­fec­tive tool we have to gather and main­tain a cus­tomer base.”

It sure is! Ask any cus­tomer who has been shown through the plant, and I’d be stag­gered if any weren’t ex­tremely im­pressed with what they saw and learned. They may not al­ways buy a Ken­worth, but more times than not they will ex­pound the ex­tra­or­di­nary im­pres­sion left by the day they were shown through Bayswa­ter.

Even its fiercest com­peti­tors ac­knowl­edge that Pac­car and its Ken­worth flag­ship are mas­sively suc­cess­ful; among nu­mer­ous rea­sons for that suc­cess, the Bayswa­ter fac­tory stands at the top of the tree. The first Aus­tralian-built Ken­worth emerged in 1971 and, ac­cord­ing to new man­ag­ing di­rec­tor An­drew Had­jikakou, they will con­tinue to be built here while ever the Aus­tralian mar­ket con­tin­ues to throw up con­di­tions and de­mands un­like any­where else in the world.

‘Aus­tralian made. World’s Best.’ It’s more than just a slo­gan at Bayswa­ter. It is a gen­uine and deeply in­grained be­lief. The pride that per­vades ev­ery part of this clin­i­cally clean fa­cil­ity, and es­pe­cially on the fac­tory floor, is nei­ther con­cocted nor or­ches­trated. It just is!

“As a coun­try and as a trans­port in­dus­try, we are unique. For that rea­son we build trucks that are unique to Aus­tralia’s re­quire­ments,” An­drew Had­jikakou says in the hour or so be­fore a re­cent press tour of the Bayswa­ter plant.

Yet de­spite the nu­mer­ous groups that pass through Bayswa­ter, press tours are an un­com­mon event. In al­most 40 years of re­port­ing on trucks and road trans­port, I can count on one hand the num­ber of ‘of­fi­cial’ vis­its to the fac­tory. Sure, I’ve man­aged a cou­ple of un­of­fi­cial strolls as well, but gen­er­ally, chore­ographed ex­cur­sions such as this most re­cent event are as rare as hen’s teeth.

That said, though, it’s this rar­ity that brings into sharp fo­cus the vast ex­tent of the Bayswa­ter plant’s evo­lu­tion. At the first visit in the early 80s, it was a com­par­a­tively mod­est and rel­a­tively low-vol­ume fac­tory pro­duc­ing W-mod­els, SARs and K-se­ries cab-overs. Back then, build qual­ity was the strongly stated pri­or­ity, just as it is now, but build rates were a frac­tion of today’s out­put,

As a coun­try and as a trans­port in­dus­try, we are unique.

and au­to­ma­tion of any sort was non-ex­is­tent. Mean­while, in the main of­fice, en­gi­neers worked on large draw­ing boards, pro­duc­ing blue­prints for fac­tory trades­men to con­vert to hard­ware, while al­most all sub-as­sem­blies were com­pleted on site be­fore be­ing fed onto the pro­duc­tion line. But just as tech­nol­ogy has had a ma­jor im­pact on the per­for­mance and ef­fi­ciency of trucks over re­cent decades, so too has man­u­fac­tur­ing tech­nol­ogy and the in­ces­sant drive for greater ef­fi­ciency pro­vided the plat­forms for mas­sive changes to de­sign, pro­duc­tion and qual­ity con­trol sys­tems at Bayswa­ter.

The vast in­vest­ment in engi­neer­ing, pro­duc­tion tech­nol­ogy and the land re­quired for ex­pan­sion has ob­vi­ously been huge but so have the re­turns de­liv­ered by robotics, au­to­ma­tion and crit­i­cally, on­go­ing in­vest­ment in equip­ment and train­ing.

As it stands today, the fac­tory cov­ers 12,000 square me­tres and sits lit­tle more than a stone’s throw from a parts dis­tri­bu­tion cen­tre cov­er­ing more than 9000 square me­tres. De­ci­sions made decades ago to in­vest in neigh­bour­ing land that were ini­tially crit­i­cised as un­nec­es­sary ex­pen­di­ture are today hailed as for­tu­itous and wise ex­am­ples of plan­ning for the fu­ture.

Mean­time, the in­ces­sant push for stream­lined ef­fi­cien­cies con­tin­ues, and nowa­days there’s a far larger num­ber of lo­cal sup­pli­ers pro­duc­ing and de­liv­er­ing a greater range of com­plete sub-as­sem­blies on a just-in-time ba­sis to the pro­duc­tion line. Per­haps best of all from Pac­car’s per­spec­tive, the ded­i­ca­tion to in­vest­ment in lo­cal man­u­fac­tur­ing con­tin­ues to de­liver big div­i­dends and, in turn, strength­ens the op­er­a­tion’s on­go­ing vi­a­bil­ity.

Pac­car Aus­tralia last year achieved com­bined rev­enue of $750 mil­lion and, given cur­rent pro­duc­tion rates, it shouldn’t be too much longer be­fore the 55,000th Bayswa­ter-built Ken­worth rolls off the line. Add to that the 4000-plus DAFs that have now been de­liv­ered in Aus­tralia since 1998, it’s easy to un­der­stand the strong sense of sat­is­fac­tion lurk­ing just un­der the sur­face at Pac­car Aus­tralia.

The evo­lu­tion has been huge, but it’s cer­tainly not over. Not by a long shot. Sur­pris­ingly per­haps, one of the very few things at Bayswa­ter that hasn’t changed much over the decades is the head of­fice, and no­tably, that even in­cludes the man­ag­ing di­rec­tor’s cor­ner.


An­drew Had­jikakou is just the fourth man­ag­ing di­rec­tor at Bayswa­ter since 1980. He is, how­ever, also the third man to fill the MD’s chair in less than four years. From 1980 to 2007, the com­pany was run with a firm, calm hand by the prag­matic and shrewd An­drew Wright, whose com­mit­ment and con­tri­bu­tion to the lo­cal man­u­fac­ture of Ken­worth trucks re­mains leg­endary.

It was no sur­prise that fol­low­ing An­drew’s re­tire­ment, his loyal lieu­tenant Joe Rizzo would step into the role. Need­ing a re­place­ment for his va­cated gen­eral man­ager’s po­si­tion, Rizzo in 2007 ap­pointed an aspiring and im­pres­sively qual­i­fied ex­ec­u­tive from the steel in­dus­try – An­drew Had­jikakou.

Pre­dictably, Joe Rizzo ran a tight ship, and

Pac­car con­tin­ued to plan and pros­per un­der his lead­er­ship. How­ever, in late 2012 Joe sur­pris­ingly an­nounced his re­tire­ment. Af­ter 35 years with Pac­car, he’d done more than his fair share.

It wasn’t long be­fore his re­place­ment was an­nounced. Mike Dozier, a highly re­garded ex­ec­u­tive from within Pac­car’s US ranks with a strong background in engi­neer­ing and man­u­fac­tur­ing. He of­fi­cially took the reins at Bayswa­ter in Fe­bru­ary 2013, and be­ing an Amer­i­can, the ru­mour mill went into im­me­di­ate over­drive with spec­u­la­tion that Dozier was here to wind back the lo­cal man­u­fac­tur­ing op­er­a­tion and pave the way for fully im­ported Ken­worths from the US.

For his part, An­drew Had­jikakou re­mained in the 2IC role and, from the out­side look­ing

in, it ap­peared Aus­tralian man­ag­ing di­rec­tors had be­come a thing of the past. Ap­pear­ances, how­ever, can be de­ceiv­ing.

From the out­set, the long, lean and like­able Dozier strongly re­futed sug­ges­tions of any re­duc­tion in lo­cal man­u­fac­tur­ing, and it was soon ob­vi­ous he was speak­ing the ab­so­lute truth. Ken­worth trucks would con­tinue to be built in Aus­tralia and as far as he could see into the fu­ture, an em­phatic Dozier as­serted there would be no Amer­i­can im­ports.

But if Joe Rizzo’s re­tire­ment had been sur­pris­ing, so too was Mike Dozier’s re­turn early this year to a ma­jor role in the US. Most sur­prised of all, per­haps, was An­drew Had­jikakou. In fact, An­drew only learned of Mike’s pend­ing de­par­ture when he re­ceived a phone call from the US of­fer­ing him the man­ag­ing di­rec­tor’s po­si­tion, end­ing spec­u­la­tion that Aus­tralians would no longer be ap­pointed to the MD role.

“It was cer­tainly a nice sur­prise to be of­fered the po­si­tion,” the af­fa­ble and as­tute Had­jikakou re­marked, “but the big­gest sur­prise was hear­ing of Mike’s re­turn to the US. He’d been here three years and I thought, just like he did, that he’d be here for at least an­other cou­ple of years.”

Asked if his goals and ad­min­is­tra­tion will be any dif­fer­ent to his pre­de­ces­sor, a thought­ful An­drew Had­jikakou an­swered: “No, my role will con­tinue where Mike left off. I learned a great deal from Joe and Mike, so for­tu­nately, there are no sur­prises about the job. One thing about Pac­car is there’s al­ways great clar­ity around goals and dis­ci­plines.

“There are a lot of ex­cit­ing things hap­pen­ing that will be re­vealed in time, but my role is not to change the world, but to keep do­ing the good things and en­sur­ing the com­pany re­mains sta­ble and vi­able.”

But, in a com­pany renowned for man­age­ment con­sis­tency, three man­ag­ing di­rec­tors in the space of just four years could sug­gest a cor­po­rate mind­set to change man­ag­ing di­rec­tors more reg­u­larly.

“There is def­i­nitely no chang­ing mind­set,” he said firmly, as­sert­ing that Mike Dozier’s ap­point­ment to Aus­tralia was per­fect tim­ing be­cause “it met with the goal to be more in­te­grated with Pac­car glob­ally.

“In fact, I be­lieve the man­age­ment here is ac­tu­ally very con­sis­tent. It’s his­toric within Pac­car to ap­point from within and I be­lieve it’s one of Pac­car’s real strengths.”

As for the de­ci­sion to open the Bayswa­ter fa­cil­ity to the press just one month into the top job, An­drew Had­jikakou was quick to ex­plain: “When you look at all the neg­a­tives around the loss of au­to­mo­tive man­u­fac­tur­ing in this coun­try, the time is right to show­case this fac­tory. We have a great story to tell here.”

What’s more, it’s a story that has been firmly en­dorsed from the high­est lev­els of Pac­car. As An­drew ex­plained: “Our ex­ec­u­tive chair­man Mark Pig­ott made an ad­dress to all the em­ploy­ees in the fac­tory, re­flect­ing on the de­te­ri­o­ra­tion of the au­to­mo­tive in­dus­try in this coun­try.

“He said that sad as that is, Pac­car con­tin­ues to in­vest in this coun­try and that is some­thing to be ex­tremely proud of. Pac­car pro­vides ac­cess to cap­i­tal to im­prove qual­ity, we em­ploy more than 800 peo­ple di­rectly and many thou­sands more through our dealer and sup­plier net­works.

“So while Toy­ota, Ford and Holden are end­ing lo­cal car pro­duc­tion, Pac­car con­tin­ues to in­crease its in­vest­ment in truck man­u­fac­tur­ing at Bayswa­ter. We stand on our own two feet with­out govern­ment hand­outs and this com­pany has achieved so much and our goal is to con­tinue to achieve. There’s a lot to look for­ward to.

“The peo­ple we em­ploy are well trained and mo­ti­vated, there’s a great deal of grat­i­tude that goes both ways be­tween us and our sup­pli­ers and our deal­ers, and we play a big part in the broader com­mu­nity,” an up­beat An­drew Had­jikakou con­tin­ued. “We are com­mit­ted to man­u­fac­tur­ing in this coun­try. Ab­so­lutely!

“We’re all about tech­nol­ogy, qual­ity, in­no­va­tion,

De­ci­sions made decades ago to in­vest in neigh­bour­ing land that were ini­tially crit­i­cised as un­nec­es­sary ex­pen­di­ture are today hailed as for­tu­itous and wise ex­am­ples of plan­ning for the fu­ture.

in­vest­ment in Aus­tralia and our peo­ple, and through events such as this press visit, we’re ac­knowl­edg­ing all those who con­trib­ute to the com­pany and its suc­cess.”

The pas­sion is pal­pa­ble.


Still, Pac­car is not the only com­pany pro­duc­ing trucks in Aus­tralia. Volvo Group Aus­tralia (VGA) is the other big sup­plier of trucks at least as­sem­bled in this coun­try, and while Pac­car’s in­vest­ment in lo­cal man­u­fac­tur­ing is un­doubt­edly the great­est, they are eas­ily the most for­mi­da­ble play­ers in the heavy-duty mar­ket.

In­deed, com­pe­ti­tion be­tween the two pow­er­houses has moved up sev­eral notches over the past few years, and while Ken­worth com­fort­ably main­tains its rank­ing at the top of the heavy-duty lad­der, VGA brands (Volvo, Mack, UD) col­lec­tively dom­i­nate the to­tal heavy-duty mar­ket, marginally ahead of Pac­car’s Ken­worth and DAF. Does that fact trou­ble An­drew Had­jikakou?

“No, it does not,” he an­swered abruptly. “There’s no doubt we’re in a very com­pet­i­tive mar­ket and we al­ways keep a close eye on our com­peti­tors, but our fo­cus en­tirely is on mak­ing sure we hit the needs of our cus­tomers.

“Our pri­or­ity is build­ing the best trucks pos­si­ble for Aus­tralia, meet­ing the needs of our cus­tomers, and train­ing and car­ing for our peo­ple. They are the things that make ev­ery­thing else pos­si­ble.

“Be­ing num­ber one is not what we are about. It never has been.”

Fair enough, but Ken­worth has al­ways held the pres­tige of a pre­mium prod­uct at a pre­mium price. Given the in­ten­sity of com­pe­ti­tion these days, how hard is it to main­tain the price pre­mium?

It was a question that drew a care­fully mea­sured re­sponse: “We are a very vi­able and prof­itable or­gan­i­sa­tion, but cer­tainly, as mar­kets de­cline, com­pe­ti­tion in­creases.

“Yes, the costs of Ken­worth do rise and fall de­pend­ing on cur­rency and sup­plier in­put costs, but over­all our com­mit­ment is to make sure we pro­duce a truck in less hours with the high­est amount of qual­ity and pass that on to the cus­tomer.

“It will al­ways be a pre­mium prod­uct and, for­tu­nately, a lot of op­er­a­tors un­der­stand the life­cy­cle costs, whether that comes from lower main­te­nance expenses, greater dura­bil­ity and up­time over the longer term, or higher re­sale. They are the things that make Ken­worth a pre­mium truck.”

Still on the com­pe­ti­tion, it’s sur­pris­ing to some that Volvo, rather than Freight­liner’s Ar­gosy, has emerged as the most pro­lific com­peti­tor to Ken­worth’s su­per-suc­cess­ful K200 cab-over. Af­ter all, as the only other US-de­rived cab-over in the mar­ket, Ar­gosy has long been viewed as the one truck that could ac­tu­ally threaten K-se­ries’ supremacy.

“That’s a good ob­ser­va­tion,” An­drew com­ments with a some­what wry grin. “We couldn’t be hap­pier with the ac­cep­tance of K200. It’s our big­gest sell­ing model, and there’s no doubt life­cy­cle cost is the thing that keeps it on top in the minds of cus­tomers.

“At the end of the day, Ar­gosy is just an­other com­peti­tor, and while we keep an eye on all com­peti­tors, our pri­or­ity is sup­ply­ing the best prod­uct we can – cab-over or con­ven­tional.”


But when it comes to cab-overs, has DAF yet achieved its true po­ten­tial de­spite be­ing part of Pac­car Aus­tralia since 1998?

“Cer­tainly we’d al­ways like more [sales], but the DAF prod­uct is do­ing well in the 13-litre cabover mar­ket,” he quickly re­sponds. “We don’t want to see DAFs pulling road­trains across the Nullar­bor. It’s not that sort of prod­uct, but there are many other ap­pli­ca­tions where it is per­fectly suited.”

As for the sug­ges­tion that DAF is some­thing of a poor cousin to Ken­worth, an adamant An­drew

Had­jikakou says, “No, it’s def­i­nitely not a poor cousin. Our deal­ers are com­mit­ted to it and run ded­i­cated DAF sales, ser­vice and sup­port teams. DAF is a vi­tal part of our busi­ness and I can guar­an­tee it will con­tinue to be.”

De­rived from DAF, of course, is the MX13 en­gine, re­leased in Ken­worth’s T4 range at the end of 2014 af­ter a long and de­tailed de­vel­op­ment pro­gram.

“The MX is now a third of all our T4 sales, so it is def­i­nitely meet­ing our ex­pec­ta­tions,” he in­sists. “Driver and fleet feed­back has been ex­cep­tional.”

The other two-thirds of T4 sales are, of course, pow­ered by Cum­mins 15 litre ISXe5 en­gine. Asked if the MX13, and per­haps even its MX11 si­b­ling, will be­come more wide­spread in the Ken­worth range, An­drew says can­didly: “Yes, there are cer­tainly op­por­tu­ni­ties in the T3 range and maybe other cab-over prod­uct.”

What ‘other’ cab-over prod­uct? The an­swer this time was a tad more cau­tious. “Of course, K200 is only avail­able with a 15-litre (Cum­mins) en­gine and at this stage there’s no plan to put the MX into a Ken­worth cab-over, but that’s not to say it won’t hap­pen or that we’re not al­ready look­ing at it.

“Let’s just see what hap­pens,” he smiles.

Still on en­gine busi­ness, Cum­mins is ob­vi­ously the core of Ken­worth’s power base, and in the big bore de­part­ment, that won’t change.

“Cum­mins is a fan­tas­tic part­ner to Ken­worth and that part­ner­ship has only strength­ened in the last five years,” An­drew re­marks.

It is, how­ever, a part­ner­ship that has also en­dured some test­ing times, not least dur­ing a pro­tracted spate of prob­lems with early EGR ver­sions of the 15-litre ISX en­gine. For­tu­nately, those prob­lems are now largely in the past, thanks to de­ter­mined re­me­dial work by Cum­mins and the in­tro­duc­tion of the ISXe5 en­gine with SCR emis­sions tech­nol­ogy.

“But even so,” An­drew quickly adds, “the EGR prod­uct today has im­proved im­mea­sur­ably, and Cum­mins has done an amaz­ing job to get it to where it is now. The up­dates to hard­ware and soft­ware on EGR have re­ally elim­i­nated all the ear­lier is­sues.

“We still sell EGR today, it’s about five per cent of our 15-litre sales, mainly to cus­tomers like live­stock haulers who are in re­mote ar­eas for long pe­ri­ods and may not have ac­cess to AdBlue or just don’t want to carry it.

“And we will con­tinue to of­fer the EGR en­gine,” he con­firms. “Be­sides, EGR will be back with us soon enough when new emis­sions stan­dards [Euro 6] are in­tro­duced in a few years’ time, and SCR and EGR will form part of the same emis­sions pack­age.”

Mean­while, An­drew Had­jikakou is cer­tainly aware of an­other card up the Cum­mins sleeve. It’s called the ISG12, an ad­vanced 12-litre en­gine with sig­nif­i­cant po­ten­tial for Ken­worth’s T4, and per­haps T3, fam­i­lies.

So, given Ken­worth’s his­toric plat­form to give the mar­ket what the mar­ket wants, is the ISG a pos­si­bil­ity de­spite its po­ten­tial clash with Pac­car’s own MX en­gine?

“Yes, it’s a pos­si­bil­ity,” he replies, “but right now we’re fo­cused on bed­ding down the MX across our prod­uct range. Like I said, the feed­back we’ve had from cus­tomers about the MX shows us that it’s right on the mark for T4 and pos­si­bly other mod­els in our range.

“When it’s all boiled down, our aim is to add value by en­hanc­ing our prod­uct, and we do that by con­stantly in­no­vat­ing and look­ing for new op­por­tu­ni­ties. When we find an op­por­tu­nity we pur­sue it, whether it be new in­te­ri­ors or com­mon cab plat­forms or the in­tro­duc­tion of new engines.

“But we’re only able to do those things ef­fec­tively and ef­fi­ciently be­cause our trucks are en­gi­neered and built here. In Aus­tralia,” an em­phatic An­drew Had­jikakou con­cludes.

We will con­tinue to of­fer the EGR en­gine.

5. Mile­stone. The 300th Ken­worth de­liv­ered to Martin’s Trans­port rolls out of the Bayswa­ter plant. Al­most 55,000 Ken­worths have now been built at Bayswa­ter. 6. Former man­ag­ing di­rec­tor Mike Dozier. He was quick to quell spec­u­la­tion that his...





1. On line. A K200 comes to­gether at Bayswa­ter. Evo­lu­tion of truck pro­duc­tion over 45 years has pro­duced a world-class fa­cil­ity 2. Up and over. As­sem­bly starts with chas­sis up­side down to ease the ef­fort of in­stal­la­tion. 3/4. Paint­work. It’s a pre­cise...

Pac­car Aus­tralia man­ag­ing di­rec­tor An­drew Had­jikakou. “As a coun­try and as a trans­port in­dus­try, we are unique”

9 8. Pac­car pair. T409 pow­ered by Pac­car MX13 en­gine has met all ex­pec­ta­tions says An­drew Had­jikakou. There are also plans to broaden the en­gine’s avail­abil­ity 9. Dutch treat. DAF re­mains a vi­tal part of Pac­car Aus­tralia’s busi­ness.


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