The Power Generation Markets The 1999 Diesel Progress Newsmaker of the Year - Brief Article

Power to the people -- Y2K and otherwise -- dominates industry news... as dependence on power nears absolute, sales go ballistic from portable to prime
Last year, the Newsmaker of the Year, Caterpillar Inc., was a unanimous choice of the Diesel Progress editorial board. In 1999, it wasn't that easy.
It's not that there weren't plenty of newsworthy events during the year; quite the opposite. It's just that no single person, company, market, product or technology seemed to clearly dominate the news.
Or so it appeared until we sat down to make the final decision.
When we started looking back at 1999, we kept coming back to electrical power generation. Some of us saw it as a Y2K issue. Some saw it as the emergence of distributed power. In the end, we all saw it as the most vibrant, pedal-to-the-metal market we're involved with, and the one area that had everyone talking throughout 1999. Who else had products on allocation this year?
Power generation made the most overall news in 1999, which is the definition of the award, and as such the power generation market in North America is the 1999 Diesel Progress Newsmaker of the Year.
But there were plenty of contenders. You could make a strong case that the consolidation in the mobile hydraulic market was another of the major stories of 1999. Eaton buying Aeroquip/Vickers and the Sauer-Danfoss alliance/ merger/acquisition were major deals. Mobile hydraulics is the last of the major component supply groups to consolidate and if Dana Corp. had sold Gresen before our deadline for the award, that may have tipped the balance.
A strong case was also made for this being the year that alternative sources of power started to emerge to challenge gasoline, diesel and gaseous engines. But microturbines, fuel cells and hybrids are not yet mainline production technology. They all seem on the verge of being real power sources, though cynics in the crowd have been heard to mutter "here we go again."
Cynicism aside, the alternatives to mainline industrial engines do seem to be emerging and our feeling is that this is a likely contender for the 2000 or 2001 Newsmaker of the Year. It's just not there yet.
On the corporate side, there were deals aplenty. It's interesting that, like the market and the manufacturers, deal making was also as stratified into jumbo and niche. There were a bunch of niche acquisitions, mergers and joint ventures in 1999, and there were a handful of megadeals, but not a lot of "mid-level" moves. Such is life in a consolidated industry.
Certainly Case-New Holland, which creates the world's number two agricultural equipment builder, the soon-to-be CNH Global, is a major deal in any year. Volvo-Scania, when finalized, will create the world's number two commercial vehicle manufacturer. Big, big deals. When sorted out, Case-New Holland will reshape the agricultural and construction equipment landscape. If we had picked a single deal as Newsmaker of the Year, this would be have been the one.
Textron Inc., also caught our eye, especially in the second half of the year. The company made some acquisitions in mobile hydraulics and hinted there may be more coming. The company also added Omniquip to its list of equipment manufacturing companies.
Terex also -- and somewhat quietly -- has assembled an impressive and expanding range of off-highway equipment and has kind of snuck up on people as a major off-highway equipment producer.
But in the end it all came back to power. You could probably make the case that Y2K itself was the major story for this market this year -- other than the fact that we're sick to death of hearing about it.
Y2K undoubtedly is a major driver in the huge growth in engine-powered power generation sales in 1999. It has also kept the truck market moving beyond expectations, as warehouses of all types are bursting in anticipation of year -end, just-in-case stockpiling.
But the story of power generation in 1999 isn't just about Y2K. The turn of the millennium is really only a catalyst in the huge growth of awareness that our sources of electrical power are not infinite, they are not 100 percent reliable, and that we have to have electricity, no matter what.
As just one example, in a shop with CNC tooling, an outage is no longer an irritant, it shuts a company down. And in a JIT manufacturing world, "we lost power" starts to equal the "dog ate my homework" on the excuse chart.
In 1999, the lines of awareness crossed. Our reliance on electricity now approaches absolute. No power, and much of life as we know it stops cold. The romance of candles and flashlights gets old in a hurry. Even manuals for survivalist communities now dedicate a lot of pages to how best to generate your own power. Our awareness of all the things we depend on power for is at an all-time high.
At the same time, our awareness of how comparatively fragile our sources of power have become, is also at an all-time high. Combine deregulation, blackouts, hurricanes, floods, tornadoes, ice storms and rolling brownouts and we're no longer as comfortable with our ability to have electrical power available to us at all times.