Trucking company creates state-of-the-art testing facility
Set back in an out-of-the-way corner of the Madras airport property, a Daimler Trucks North America testing facility is quietly reshaping the trucking industry.
In May 2017, the trucking giant, which owns the Freightliner, Western Star, Thomas Built Buses, and Freightliner Custom Chassis brands, held its grand opening for the High Desert Proving Grounds, in Madras, where all those brands will eventually be tested.
On the 113-acre site, Daimler is working to improve safety, reliability, durability and fuel efficiency for a new generation of trucks. So far, the proving ground includes a 32,000-square-foot office and shop, with 14 truck bays, a new durability track, fueling station, and truck parking, but the place is buzzing with expansion activity: a new road, a larger test track to encircle the city's north wastewater treatment plant, and a larger, permanent fueling station.
Freightliner history in Madras
Even though the High Desert Proving Grounds are only a year and a half old, Freightliner has been testing its trucks at the Madras airport for 46 years. According to city records, the first lease was signed on Feb. 15, 1973.
"Freightliner Trucks has had a presence in Madras since 1973, when they built an oval truck test track using a portion of an abandoned World War II B-17 runway at the Madras airport," said Janet Brown, of Madras, the Jefferson County manager for Economic Development for Central Oregon. "Trucks were brought in occasionally and they leased an old WWII shop. My dad, Dick Cowden, was on Madras City Council and mayor in the 1970s and worked with Freightliner on this project. It's pretty cool carrying on with a project my dad helped start."
The Freightliner truck was first produced by Consolidated Freightways, of Portland, in the 1930s. In 1951, the company entered into a partnership with White Motor Co., of Cleveland, to produce the White Freightliner trucks. That agreement, to improve distribution, was ended in 1974, when Freightliner Corp. became both a manufacturer and distributor. Daimler, now the largest truck manufacturer in North America, purchased Freightliner in 1981.
Throughout the decades and changes in ownership, Freightliner has continued to test trucks at the airport, and lease an old World War II-era building on Northwest Berg Drive, across the street from the Madras General Aviation Building. But it wasn't until the past few years that the relationship between Daimler and the city of Madras was cemented well into the future.
"In early August of 2014, executives from Daimler asked for a meeting with the city of Madras and EDCO to let us know we were one of the sites — worldwide — in competition to build their new state-of-the-art truck test track," said Brown.
"In order for Madras to be chosen as the project site, we were asked to expand our Jefferson County Enterprise Zone to include the lands Daimler needed to lease from the city of Madras," recalled Brown, who also serves as the manager of the Jefferson County Enterprise Zone. In Oregon, businesses that locate or expand their businesses in an enterprise zone are exempt from local property taxes on new investments for three to five years.
"Expanding an ezone in the state of Oregon requires that all zone sponsors pass resolutions in agreement," said Brown, who had to get resolutions from four ezone sponsors — Jefferson County, Madras, Metolius and Culver. "The state ezone boundary expansion process is complicated, involves multiple sponsor attorneys, all taxing districts, state agencies and takes a great deal of time. The four ezone sponsors unanimously agreed to expand the boundary, adding 1,443 acres of city-owned airport-industrial zoned land at the Madras airport."
As she worked to expand the enterprise zone, Brown continued to meet with Daimler officials. "Rapport and relationships were established immediately, meetings were held often, processes were taken on, and Madras was chosen over other cities in Oregon, other U.S. states, Germany, and other international sites," she said.
Besides the enterprise zone expansion, another issue also stood in the way — providing utilities at the airport. The city and Brown worked with former state Rep. John Huffman to advance a bill to allow the city to provide sewer and water to the airport, without annexing the entire airport property into the city's urban growth boundary.
Senate Bill 534, also sponsored by Sens. Betsy Johnson and Fred Girod, passed July 3, 2015, clearing the way for the city to approve Daimler's conditional use application to construct the truck-testing facility.
Daimler reached an agreement with the city and made its contract official on Nov. 10, 2015, when the Madras City Council unanimously approved a 20-year, renewable lease for 87 acres. At a base rent of $12,615 per month, the lease started at $151,380 annually, with annual increases of 1.5 percent. The 20-year lease also included the possibility of three 10-year extensions.
Before that lease was even signed, the company was already showing its commitment to the community, Brown said. "Daimler hadn't begun construction or hired more than a couple people when they brought in three specialty trucks and set up a static display for the Airshow of the Cascades in 2015."
In March 2016, Daimler held its official groundbreaking for the new, $18.7 million testing facility, to be located just 120 miles from the company's new headquarters at Swan Island, which opened a month later, in April 2016.
That same year, "Daimler became a sponsor of the Airshow of the Cascades, and challenged their construction company, Kirby Nagelhout, to match and they did," said Brown. "Daimler brought in four specialty trucks, one being their 'Never Forget' truck wrapped by local business Rip-Q. They also brought in their Galvatron truck from the 'Transformer' movie, a huge hit with kids, and hosted their display area."
From the start of construction in April 2016, Kirby Nagelhout simultaneously worked on the new durability track, which was completed at the end of the year, and the office and shop, which was finished in the spring of 2017.
"Most people don't realize that industrial economic development takes years from initial conversations to development and eventually occupation," said Brown.
"In 37 years of business in three counties, the Daimler project is one of EDCO's shortest turnaround projects, especially working with such a large international company," she said, noting that one Redmond project took 17 years from initial talks to completion. "We don't give up."
Opening its doors
People came from all over the country for the grand opening in May 2017, when Daimler President and CEO Roger Nielsen, of Charlotte, North Carolina, explained that Madras would replace South Bend, Indiana, as the location for the company's primary test track in the U.S.
Contrasting the Madras location with the South Bend location, Nielsen said that South Bend had several distinct disadvantages. "We didn't own it, we couldn't modify it, and we shared it with competitors," he said.
"Why Madras? What makes Madras great?" asked Nielsen, who grew up in Portland and has regularly visited Jefferson County for recreation throughout his life. "It's close to our offices in Portland. It's a long way to fly to Chicago and then drive the rest of the way to South Bend. It's a short drive over the mountains."
Noting that autonomous vehicles were already being tested in Madras, Nielsen said, "It's truly a place for us to bring things to market faster."
Senior vice president of engineering, Wilfried Achenbach, also in attendance at the grand opening, echoed Nielsen's sentiments. "To some extent, it's an engineer's dream," he said. "You don't need a plane; you just need your car."
At the Madras facility, he added, "You can feel it, you can touch it, and that's a huge benefit. It allows us to engineer a better product."
Nielsen, who noted that Daimler had about 2,200 employees in Oregon, pledged to hire another 40 in Madras, "to help our engineers bring trucks to life here in Oregon."
Achenbach announced that the company would hold customer events at the track, so that people would be able to test out their products on the highly engineered nine-lane track, which features nine different events — bumps, contours and irregular surfaces that mimic and exaggerate real-world conditions. A gradient hill allows truck drivers to experience a 20 percent grade on one side and 5, 10 and 15 percent grades on the other.
"There are similar test tracks in Germany and soon, in Brazil, because bumps are bumps wherever you go," he said.
A single mile on the bumps, contours and irregular surfaces of the test track is equivalent to 200 miles on a normal road, Achenbach said, which means that by the time a test driver has driven a truck 6,000 miles on the test track, the truck will show a similar amount of wear and tear to 1.2 million miles on regular roads.
Madras Mayor Royce Embanks, who also spoke at the event, said he was excited and grateful for Daimler's long-term interest in the community.
"It will have a positive impact in the city and county," said Embanks. "It aligns directly with the city's mission and values. This facility is just part of that growth and a very important part."
Starting, expanding operations
Operations Manager Robert Hansen, who has worked for the company for more than 15 years, was happy to relocate his family to Madras from Portland to take care of the day-to-day operations at the proving grounds.
"We're outdoorsy people; we like hunting, fishing, mountain biking," said Hansen. "We like the small community; people are friendly. It's been a good move."
Although the company plans to hire more people locally, it currently has about 30 employees. "We'll be looking for more drivers shortly for projects," he said.
A year and a half after Daimler opened the High Desert Proving Grounds, the company is well on its way to expanding its operations.
"We're doing a two-phase approach on the loop track — the portion we've been testing on since the early '70s," he said. "We're making it more of an oval, so we can test at highway speeds; it was more of a runway tarmac — more of a square pattern."
Hansen explained that the proving grounds share an entrance road — Daimler Road — and lease with the Madras Dragstrip. "The new loop track is going to go on the inside of the dragstrip, so we won't have a conflict with their operation," he said. "We use same access road as part of the track; our operations will be separated. Now, we shut down when they have an event; we won't have to do that in the future."
"We're working it in two phases; phase I will be completed in May 2019, that's just the southeast corner of the loop track," he said. "Then, another section would be the northwest corner of the loop track. We're looking at starting that construction next summer and completing it by the end of 2019."
He expects that the new road will be completed in the spring, before racing starts back up at the dragstrip.
Another improvement will be the addition of a permanent, above-ground fuel tank. Currently, the fueling station at the proving grounds uses about 1,000 gallons of fuel per week, which must be supplied by Carson Oil, in portable tanks. Hansen said that the new tank will hold 12,000 gallons.
The company's original plans mentioned a truck washing bay, but Hansen said that will be part of Phase II. "We have 14 truck bays, but we're using three of them for a machine shop and parts storage."
Sean McKenna, of Portland, is the site manager for the High Desert Proving Grounds. "We're happy to be in Madras; it's meant a lot to Daimler. It's really improved our design process by increased engagement of our engineering teams," he said.
"Basically, by being closer than South Bend, we're getting a lot more participation, and more hands-on with our engineering departments, which has helped our design process," he said. "By helping the design process it means get better trucks out there in the market."
"Madras is great spot," said McKenna, who appreciates the panoramic and photogenic views of the Cascade Mountains from the airport property, as well as the high desert weather. "The weather is a little more cooperative than the Portland side, so that's a plus."
Beginning in 2019, the Daimler brands that are still being tested in South Bend, Indiana — Thomas Built Buses and Freightliner Custom Chassis, which makes the chassis for recreational vehicles, walk-in vans and buses — will also be tested on the Madras durability track.
"Employees are hired and we're going to start testing those products (in 2019)," said McKenna. "We have lots of expansion ideas and plans that we're working on."
Impact on local community
The company's contributions to the local economy have not gone unnoticed.
"Daimler's presence and expansion has been a positive impact to our community in a number of major ways," said Madras City Manager Gus Burril. "Airport property not needed for aeronautical use is leased, so as to sustain operational and capital improvement costs to the airport. Daimler's lease revenues have grown significantly through their lease of 113.61 acres that bring in close to $205,000 in annual revenue to the airport."
"With cost share required by an airport owner on the large capital improvements projects at the airport, such as the current Taxiway Rehabilitation Project, Daimler's presence at the airport makes sure the city can keep the airport in good condition and open for business to the aviation industry," said Burril.
"In addition, Daimler is employing about 30 jobs in the operation of the facility, and they regularly schedule major groups from the Portland headquarters, composed of engineer and executive team members, to conduct business onsite," he said.
Daimler, which has about 2,800 employees in the Portland area, and 23,000 across the country, is still planning to increase its employment at the Madras facility.
In the first phase, Brown said that the company had conservatively estimated that they would add 30 jobs, and it's on track to surpass that. "More expansions and new employment are likely on the horizon," she said. "In a community of 6,800, adding over 30 new, well-paying jobs is a nice increase. Their investment is in the millions and is a nice increase to the tax base as it comes on the rolls to be used for our schools, law enforcement and services we all use."
Daimler has been working with both the city and the county on its plans for expansion, which were hampered by the fact that the entire airport wasn't in the city's urban growth boundary.
In March 2017, former Rep. Huffman introduced a bill directing the Oregon Land Conservation and Development Commission "to establish and implement a pilot program to implement a master plan for economic development on land adjacent to airport in rural area. Establishes criteria for pilot program."
The city owns 1,175 acres adjacent to the airport property, but outside the urban growth boundary, and another 920 within the UGB, for a total of 2,095 acres at the airport.
The city was able to use the Regional Industrial Large Lot Program to bring 195 acres into the UGB for Daimler, costing the city about $50,000, but was not allowed to bring in anything larger than 199 acres, based on the region's allotment.
Through the pilot program, Burril is hopeful that the city will be able to expand the UGB all at once, rather than pursuing other more costly avenues for expansion.
Following the direction from the Oregon Legislature, in July, the Department of Land Conservation and Development adopted the rules for the pilot program and made it official, according to Burril.
"We are now eligible to submit to DLCD that we believe we're an eligible candidate," said Burril, who anticipates that the city will be able to move its UGB to encompass the entire airport, saving hundreds of thousands of dollars.
"That saves us time and money in the future and streamlines the permitting process, so they can work with one entity," he said.
Also in July, "Daimler completed site plan approval with Jefferson County and the city of Madras for Phase II of a multiphased truck testing facility (the site plan approval is for the area commonly referred to as the 'loop track enhancements')," said Burril. "The FAA review process is progressing on this next phase and is expected to be completed this fall."
"Phase I of the high-speed loop track enhancements started in September and is planned for completion in the spring of 2019, when Phase II of the loop track will start," he said. "There will be a lease amendment later this year to include some of the new loop track area planned for development."
Besides the company's direct contributions to the city, the company is also impacting local businesses.
"Daimler staff shared that another way that they are great community supporters is in their contracting for local services, such as tires and detailing, at a value of $2 million-plus annually," Burril said, adding that Daimler is a major financial supporter of Jefferson County's signature event, the Airshow of the Cascades, and also contributes to local community events.
"Most recently, Daimler donated $10,000 to the city's spray park project for Sahalee Park. The city of Madras and Jefferson County are blessed to have Daimler testing its next generation of vehicles in our community," said Burril.
Economic benefits are being felt through the new jobs, increased tax base, and housing, Brown said, in addition to the benefits to local businesses.
"Daimler rigorously tests their new models and designs of trucks on this highly sophisticated track system looking for ways to improve their trucks' durability, aerodynamics, fuel efficiency, and other elements," she said "Trucks tested on the proving grounds are not yet on the market for sale or use. They stress the trucks to find and fix weak areas and go through truck tires and parts like crazy!"
"In one example, they have a standing purchase order in the tens of thousands with Point S Tire Store in Madras," said Brown. "Point S Tires hired one new full-time employee and assigns others as needed just to service Daimler."
"DTNA also uses Rip-Q, a local Madras business, for special, high-tech 'wraps' on their trucks rather than airbrush painting; an example is shown on their 'Tribute' and 'Never Forget' trucks," she said. "The company has done a great deal of local business with Rocky Ridge Excavation, Bullet Rentals, Inn at Cross Keys, Detail Plus, NAPA, Ag West, Ace Hardware, O'Reilly's, gas stations, and a long list of Madras businesses that have benefitted and increased their revenues."
"In addition, DTNA holds several large meetings for their engineers, international customers and other events throughout the year," said Brown, who pointed out that the company spends many thousands on the events. "They purchase all their supplies locally and hire local caterers to host these multiday events."
Brown sees a ripple effect with the expansion of Daimler in Jefferson County.
"Not only does the company spend money in our communities, so do their employees and their families. These folks live in Madras, Metolius, Culver and Crooked River Ranch, shop in local stores, go to local doctors, use local realtors and attorneys and many other services," she said. "Madras and surrounding communities have prospered with the addition, and will continue to with future additions of Daimler."
This article first appeared in the fall/winter 2018 Sageland.