Two in one

At Bauma last year, Tadano celebrated its agreement to acquire renowned German all terrain and crawler manufacturer Demag from Terex. A year later, shortly after this year’s big show, ConExpo, I spoke to Ingo Schiller about the work the company has done to integrate its businesses.

One of my first questions was about the Demag brand. During Tadano’s press conference, Jens Ennen, CEO of Tadano Germany, whose job includes overall responsibility for the factories in Lauf (Faun) and Zweibrücken (Demag), had clearly stated that cranes from both brands would be supported throughout their life cycle. What was less clear to me, watching the press conference over Google Hangouts, was what would happen when Demag crane models came to the end of their life and were due an update.

Would new cranes be designed and sold in Demag’s yellow and blue, or would their successors be painted white and blue and sold as Tadanos?

Schiller is emphatic: “There is a clear strategy to maintain the Demag brand. If I can speak very bluntly, we just spent an awful lot of money to acquire the Demag brand, their products, their engineering, their legacy. We’re in no rush to step away from that.

“The Demag brand has a tremendous value and reputation in lattice boom crawlers, and in all terrains.”

At the time of the Demag deal, Tadano America Corporation (TAC) was responsible for selling and supporting the company’s German and Japanese-built cranes in Canada, the US, and Mexico. South of Mexico, sales and support were managed through an office in Chile. The company’s US telecrawlers were built, sold, and supported by Mantis, which Tadano had acquired in 2009.

And Demag had its own sales and service through parent company Terex. All three also had their own network of dealers.

To achieve its ambitious aim of being the world’s biggest crane manufacturer, and to better serve its customers, the company would need to rationalise these overlapping networks. At its ConExpo press conference, the company announced it would now sell and support all of its Tadano and Demag cranes across the Americas (outside of Brazil) through TAC. On April 1, the day after I spoke to Schiller, Mantis’ customer facing presence was also brought under the TAC umbrella.

Now, if you want to buy or get support for any Tadano, Demag, or Mantis crane in the Americas, you can call the TAC office in Houston or Santiago, and reach an Englishor Spanish-speaking representative who can get you the help you need.

That makes life easier for customers, and one can anticipate that it will reduce costs overall for Tadano. As well as helping complete the company’s goals, it is a response to new opportunity. Over the last decade or so, construction equipment sales in markets like the USA and EU with the most stringent engine emissions regulations had split from those in markets where the ultra-low sulphur diesel needed for new cleaner engines could not be found. Now, Schiller explains, the correct fuel is available far more broadly across Latin America, making it easier to combine sales operations.

It will also help fix one of the issues Demag had struggled with, a perception that service and parts supply could not be relied on.

Schiller says, “The reputation of the Demag product was a little unfair. Cranes can break down. If you can get parts for the crane, and a service technician, the next day, then it’s a great crane. If you have to wait six weeks, then it’s a lousy crane.

“We want to make sure we are able to take care of cranes in the field, and our customers. The first thing we did, on day one, was to increase the number of Demag parts on the shelves.”

Prior to completing the acquisition, with Terex a listed company and a rival to Tadano, the companies could not share detailed information on their operations.

So, when the deal completed, Schiller and the rest of the management team were running two parallel businesses. When they asked their staff what they needed, parts supply was top of the list.

“And what we found in the following few months,” Schiller says, “Is that the reputation of Demag all terrains and crawlers has improved drastically, because parts are more readily available. It’s not a complete fix, but it makes things a whole lot better.”

A reliable crane supplier is about people, as much as about parts. With the integration of TAC, the company has focussed on having the right people, in the right roles, across the business.

One of the key people in the new Tadano is Jens Ennen, who joined from Manitowoc and had senior roles in production, engineering, and product management at Shady Grove and Wilhelmshaven.

“One of the things that I really appreciate about the acquisition of the Demag group,” says Schiller, “is that we’ve brought on board Jens Ennen to manage this. He has the experience we need, but no particular affinity to either brand.

He just looks at the product. He can make the decision, ‘Yes, we like this from this brand, this from that group’, but never mind which was invented where. That gives us the maximum opportunity, and the best way to serve our customers.

That experience and objectivity is rare to have in a merger like we’re having now.”

Schiller has also been building an expert, combined, team around him in TAC. “We’ve expanded our team here. We’ve brought over most of the Demag-focussed people over from Terex. Now we have Ken Butz, who runs sales for Canada, the US, and Mexico. Dean Barley is responsible for aftersales across the entire Americas, and, based on his experience with Terex Demag, is also overseeing sales and the support of distribution across Latin America. Along with those guys, we have Julie Fuller, the new president of Mantis, Brian Mims, our in-house counsel who was brought in a year ago to help with the integration, Christian Bartley and Sven Ebinger in marketing. Life has got a whole lot easier for me, because the team around me is really talented and experienced in the industry.”

Schiller’s (comparatively) easy life is made easier still by the broader Tadano, Demag, and Mantis teams. A key project for TAC has been building on the expertise across the group, and finding the right place for its team members.

“After we announced the Demag deal,” Schiller says, “We brought the sales team over to Japan. We had dinner with [Tadano president] Koichi Tadano, and I asked the group of seven, ‘Who here has been in the business for more than twenty years?’ Most them raised their hands. ‘Who is second generation in this business?’ Half raised their hands. ‘Who is third generation?’ Two did, including Mr Tadano.”

Schiller too, who distributed Liebherr mobile cranes in America in an independent business with his father, Heinz, is another second generation crane person.

“And then I asked, ‘Who has sold crawler cranes?’ Three quarters of them had. So, we were able to say to Mr Tadano, ‘Crawler cranes may be new to Tadano, but with the team we’ve got around you right now, we can handle this.’”

That shared expertise and institutional experience is as important after a sale, as before.

“We’ve already coordinated all of our service centres, so that we have a single pool of engineers that are taking care of all our Tadano and Demag cranes now,” Schiller says. “We have some service guys who prefer working on rough terrains, some are crawler guys, some do all terrains. It’s a rare individual who can work on all three of those product lines. So we decide who the right person is to send out to work on a particular crane.”

Importantly, for a company whose operations span the Americas, this isn’t just an English speaking team. “We have a large number of Spanish-speaking service technicians in Houston, and that we’ve trained up at our distribution centre in Chile.” Now, across the Americas, if you need support for a crane in the broad Tadano family, you can reach a service tech who speaks your language, just as well as they speak the language of cranes.

Most crane manufacturers rely not just on their in-house expertise, but on the local expertise of their dealers: to know the right crane for a customer’s market, you need to know cranes, and you need to know the local market. I, and other industry observers, had wondered if the integration of Demag would leave large numbers of dealers across the USA, and wider Americas, without a big name crane brand to represent.

That turns out not to be the case, Schiller says. “We already shared several dealers, like Cropac, Scott-Macon, and Bigge, so the integration has been easy in those areas. We have had to do a little bit of alignment, because sometimes the geographies covered by the same dealer for the two brands weren’t identical, but we just managed that though conversation.

“As well as overlap, there were also some areas where the Tadano brand or the Demag brand didn’t have a presence. Tadano has never been interested in covering the map with dealers. Whenever we can, we like to leave some space in between, so that gives everyone just a little room to breathe.”