Christian-Jacques Vernazza, president of European crane and transport federation ESTA (left) congratulates Glenn Tellock, now CEO of Manitowoc Crane Group, for winning the ESTA award for excellence for the GTK 1100
Glen Tellock: “This was designed in conjunction with Wiesbauer. This was done as a ‘voice of the customer’ product launch. This came about because of meetings with the Wiesbauer people, who said, this is what I’m thinking, I don’t know how to do it, this is what you do, can you help?
“It started with himself, some engineers he knew, we brought in some engineers, what went from a discussion a few years ago and today is the typical way we make new products. It is no different to Weldex’s commissioning of the double slew-ring crane from Liebherr (the LG 1750).
“The customers are now over double digits, and include Wiesbauer, Rentakran, and Makro. There is interest in every region of the world, including Asia.
“I’m not sure where we’re headed with it, but I would say that this is our starting platform, and there could be a lot of ancillary changes if there is customer interest. I want to be careful not to keep making modifications for it. The manufacturing gets very difficult if you try to change it every time you make it – then it is custom every time. The intention is to find the applications and design them, just like we do with a GMK or a tower crane. Every one’s not different, but you have ranges of where those products work.” Two current customer demands that Tellock mentioned in particular, were to improve the transport weight for the Americas, and to make it larger.
Tellock continues: “The second unit is coming out later this year, then there is a full range of production next year.
“One comment that’s been made from a competitor is that it is just an upgrade of a 30 year old design. My response: I don’t think 30 years ago there was anything that looked like that. One of our customers that had that old design came through the other day. He says it reminds me of the old GCI, but that was a model T compared to what you have there. Does that mean that someone who has a Jaguar is an upgrade of a 100-year old design of a car?
“The reaction is better than I anticipated.”
CT: Manitowoc Crane Care is a current corporate initiative. Where are you now, and where do you want to be?
“We’re certainly not where we want to be. The reason why I say that is because when I look at the emerging markets, my strategy would be to put in the infrastructure in place, the product support, the facilities in anticipation of the emerging markets. Unfortunately our salespeople are very good, and their customers are saying, hey I’m going into Russia, I need you to come with me, and next thing you know we are selling product into Russia and Latin America. I don’t think that’s any surprise to anybody, but I think what’s different is that we aren’t going to leave the customer stranded in those areas. Whether it’s Africa or Latin America or Russia or Korea, that’s something that is key to what we believe is a success, it’s a differentiator to have product support.
“When you look at things we are doing with call centres, by the end of this year after we open the one in Asia, you have 24 hour, 7 day a week access to customer support. We’ve scheduled people in the call centres that overlap, they speak six-seven language. A European call centre opened last year, and there are centres in Manitowoc and Shady Grove.
“May 9-10 is the grand opening of our new facility in the Jebel Ali free trade zone in Dubai. We have opened a new facility in Australia. We are planning a new facility in Latin America, for sales and service. The issue is, you can call, but if there’s a problem, how do you get the parts to the person. We’ll pick and choose where we put those, you’re not going to do it in every market, but you have got to get as close as you can in every region to very quick support.
“We are well on our way in our crane care organisation but we are not where we want to be. We do need to make people investments. We can get the buildings. Finding people that want to do service and support in the construction equipment industry is very difficult. It’s finding people who want to be in Russia, the Middle East, China, Manitowoc, Shady Grove, anywhere, in service and support. We are committing more and more resources to it.”
CT: Is Manitowoc an American company focusing mainly on America?
“Let’s go to 2003, when the crawler crane market in North America was down 70% over the previous year. If I just relied on the North American market it would be a very hard business to be in.”
CT: Do you have plans to bring in non-US board members?
“We talk about that. When people do leave the board, there’s a search committee. It would behoove us to put a woman on the board, an international person. We’ve taken our board of directors to China, we’ve taken them through our plants in France. Are we an inward-looking US company? We are publicly held in the New York Stock Exchange, we have all US people on our board. We are a us-based company but I don’t think we are an American company anymore. Less than half our sales in the crane group are now in north america. Part of the acquisitions of Potain and Grove were to get that global footprint. We certainly would not turn our back on the US market, but our strategy is how we minimise the impact of the swings in the North American market.”
CT: Can you speak to the concerns of people waiting for cranes?
“Their concerns are real. The crane rental companies or contractors certainly have the jobs. If you look at the trends in the industry, people used to buy things, have it and then get work as they went along. As the prices of these machines get more, as people get to be better businesspeople, they tend to wait. When people get a job now, they want the equipment now. It’s frustrating for our customers, they don’t want to buy in anticipation of a job they don’t know they have. It’s a different dynamic of a few years ago. The industry has ramped up so fast.
“When the market went down in 2001, 2002, 2003, many of our equipment suppliers found other work, and now we are competing with other work they found during the down periods. From a supply base, let’s be honest, this is almost a perfect storm. Every market in the world is good right now, and just about every construction equipment line is good right now, so I am competing with Caterpillar, Komatsu, and those companies, who produce huge volumes in comparison to cranes. We don’t exactly get the front line of the raw material supply base.
“Tyres were a problem but that’s less and less an issue. Now it’s things like bearings, high tensile-strength steel.
“As publicly-held company, the people want to see the backlog. My customers don’t want to see the backlog, they would rather have a faster throughput.
“There’s only so much you can do. It’s a matter of what types of physical plant investments we can make, where we can make them, when you can make them, and it’s recognising that this is a cyclical business and we have to make the right investments for the long term.
“We have expanded in Porto, Portugal, our tower crane factory.
“We are expanding our RT and AT facility in Niela Tarano. We are improving Manitowoc and Shady Grove. We bought Port Washington. We are trying to build these things as close as possible strategically to the customer.”
CT: Do you have a responsibility to avoid producing a glut of machines?
“I think so. There’s a responsibility to understand the market, provide market knowledge and forecasting. We go through distribution and we go direct, so in the US we have a lot of conversations with our dealer network, we do in Europe, I don’t think it’s our sole responsibility, but if we’re not smart about it it’s not good for anybody.
“When the market turns and everybody has inventory on their books and machines not working, that doesn’t do anybody in the industry any good, because people will sell things way below their residual value and there go the rental rates again.
“I had this conversation with a customer last night, who said that manufacturers should try to drive rental rates by raising prices, then we have to charge more for the cranes. That’s a nice thing to say, but I raise my prices and the traditional manufacturers raise theirs, and you have someone who is entering the market who doesn’t have anything else but come after you on price, how does that change the rental rates?
“After every downturn, with the cost of this equipment, we’re getting to be better businesspeople.”
CT: Can we talk about used equipment?
“There isn’t any.”
CT: What is going on with used crane prices?
“The reason used prices are so high right now is that the lead times are so long. And if a person absolutely has to have something, they become a little irrational in your buying habit. Some of these people could sell the fleet for more than the business is worth.
“People have a lot of work, and if they can’t get their hands on the eqiupment, that’s what’s driving some of that.
“At the end of the day, we pride ourselves on the residual value of the product. That’s where MCG, Grove, Potain, that’s why people want to be buying new product today.”
Christian-Jacques Vernazza, president of European crane and transport federation ESTA (left) congratulates Glenn Tellock, now CEO of Manitowoc Crane Group, for winning the ESTA award for excellence for the GTK 1100 Christian-Jacques Vernazza (left) congratulates Glenn Tellock
