Cranes Today’s first interview at ConExpo came before the doors opened, meeting with Eric Etchart, president of Manitowoc Cranes, and global EVP Larry Weyers. The next day, we met with Tim Ford and Francois Truffier, of Manitowoc’s US rivals, Terex.

The American multiline, global crane builders find themselves facing some similar questions: how to create a unified global manufacturer from legacy businesses in different regions and product lines, and how to meet the demands of customers in the high capacity crawler sector. The two have very different answers to each question.

Manitowoc’s stand featured two of the show’s most hotly anticipated new products, new 300t and 650t crawlers with a variable positioning counterweight similar in concept, if not appearance, to that on its giant Model 31000.

The company largely kept a lid on its product plans. It was more open about a new organisational structure, announced at the start of the year.

Eric Etchart, president, Manitowoc, says, "We’re moving towards becoming a product line organisation. Larry Weyers, as global EVP, is looking after this. All factories now are under one EVP for operations and procurement, Joe Matosevic. Dean Nolden, our EVP for finance and information systems, is implementing SAP.

"We’re in the middle now of our Project One SAP implementation. We have it now in Niella Tanaro, with China coming soon. We’ll have it in Manitowoc, Shady Grove and Wilhelmshaven in 2015.

"Our deployment of SAP ties into our global processes. A regional organisation was great, as a way to put three company cultures together. Now, after 12 years, we need to move to a product line organisation. That helps us address customer problems. These are now very global products, with less silos slowing us down."

As part of the shake-up, Larry Weyers was appointed to global EVP, responsible for all Manitowoc’s product lines including engineering, sales and marketing, and for its Crane Care service division.

He says, "When we were looking at our corporate structure, we looked at the customer value stream: who’s accountable for identifying the customer, and how we go to market.

"We now have Dave Hull looking after customer value. Then, Ingo Schiller on small hydraulics, Jean-Noel Daguin on tower cranes, John Kennedy on crawlers and Jens Ennen on all terrains and truck cranes. Each has their own Crane Care and engineering resources. There’s a straight line for the customer."

That straight line points back from the customer, Etchart says, "We use a lot of customer monitoring systems, to determine our CSI (customer service index) score. We implemented CSI tracking four years ago. We were getting results of four or five out of ten. We’re now getting nine."

Weyers adds, "In 2008, we may have thought our products were better than they were. So we invested into the Product Verification Centre, into the concept of checking every component. Customers are beginning to see the benefit of that. We’ve won back customers with some great new products like the GMK6300L and GMK6400."

The most recent of the company’s new products were the MLC300 and MLC650 VPC crawlers. Both Etchart and Weyers were deeply excited about the new cranes.

Weyers says, "When we talk to customers, they use words like game changing. One called it ‘the internet of cranes’. You always have those implemental improvements, but then you have those that really change value for customer.

"We looked at 100m wind towers. With the MLC650’s load moment and VPC, it’s able to raise 350ft of boom, without outriggers, and lift 130t of weight. With load up and counterweight in, it can crawl across wind sites. With superlift, you only need 1,140sq ft of space. That makes it much more maneuverabe on cramped sites."

Like its Wisconsin-based rival, Terex grew rapidly around the turn of the millenium with a series of acquisitions. Since Bauma last year, it too has been reshaping its organisation. Tim Ford was appointed as president, Terex Cranes, shortly before Bauma. The company reorganised at the same time.

Ford says, "We’ve got a product portfolio today, that is very complex, as a vestige of our history. We’ve pulled that together from a branding standpoint. But we’d never stopped, looked in the mirror, and asked, ‘What are we putting in the market?’ Last year, we looked at this, and saw we had over 200 products customer can buy. How productive are they? There’s a long tail of products that don’t generate revenue or margin and take up space in our product line. With that complexity, when a supplier changes one part, that rippled through who range. We had too much complexity in the overall system.

"Francois Truffier has lead an effort to evaluate which products are productive, which are not. The flipside is now we don’t have to support all those models, we have more engineering capacity. We take a modularity, family and platform based approach. Explorers are a good example of this. "

Truffier is now group vice president, global marketing, product and commercial strategy. He says, "We’ve moved from a factory-based to a region-based organisation. General managers are responsible for sales in their regions. But, how do you make sure machines are suitable for the whole world? How you go to market has to be harmonised around the world. So, the product and commercial strategy group handles this, and puts together all the service organisations around the world.

"More and more, we start with the customer. We take a Customer Driven Product Definition (CDPD) approach. We go to customers, look at our products, and competitors’, what customers like and what they are prepared to pay for. That feeds our product planning, under Klaus Meissner: what product will be needed, what will be stopped. That then goes to the regional factories, telling them what they need to supply.

"We have a new global leader for product support improvement, Frank Schröder. He was head of parts in Europe, and is now, global head. We have 25 new international service engineers, with new service centres in Singapore, and South Africa, and new technicians in Benelux and Germany.

"We want to be easier to do business with. A lot of that is to do with how we interact with customers. We need to make sure, when they wants spare parts, they don’t have to think, ‘Which factory this comes from?’, but have instead just one contact to call and get parts fast. It should be the same with getting a quote, or getting finance. We’re modifying all of our processes and IT systems, to make it easy for the customer to find who they have to talk to, and get an answer fast."

While Terex and Manitowoc have factories around the world, Link-Belt is very much a US manufacturer, building all of its cranes at its plant in Lexinton, Kentucky. Domestically, it has been developing its boom fabrication capacity, and it’s all terrain range. At the same time, it is also looking to build its global business.

Russ Hopper, vice president of manufacturing, says, "We shipped the first all terrain in July 2012. Really when it comes to the all terrains, in assembly it’s just a bigger version of the truck cranes, but with more powered axles. Processing-wise, it’s more of a challenge, because of the formed boom we’re putting on it. We’re developing the technology and finding good suppliers. To be able to produce the ATC,we added a bay to the plant, strictly for ATC’s and large truck cranes.

"In 2009, we produced our first production formed boom, on a 40ft press. We only have one press, so in order to produce several models, we had to have a real team effort between our engineering and design departments to make sure we could manufacture all the formed booms needed for all the product lines.

"We’ve implemented lean manufacturing, building one boom at a time for each machine. We’ve implemented a quick change and set up system. This has been our recent focus. The initial investment needed to be able to form and weld these products was around $25m. But, we’re continuing to improve this process."

As it continues to develop its manufacturing capacity, Link-Belt is also looking to build sales around the world. Pat Collins, director of product marketing, says, "Our first in house all terrain was at ConExpo 2011, and production started the following year. We had our homework to get done, testing took a little bit of time, but we wanted to make sure when we let it out the door, it was right.

"I think with the ATC-3275, we have to be getting the attention of those manufacturers who were the only ones in those classes. Our market share has been better than expected. Since we stated shipping, over half of them have gone to repeat buyers, I don’t mean they bought multiple machines in one shot: they bought one, then a second, then a third. We have people now owning four. That’s probably the best endorsement you can ask for.

"The new 50t telecrawler has been very good, we’ve got interest globally. It’s no secret that we’ve previously focussed on North America. The first machine, which had a Tier 3 engine, shipped to [Singapore-based] Tat Hong. That should be good indication of where we’re going globally. We’ve got Tier 3 and Tier 4 Final done in them right now.

"There’s no lag now for new engines. Our complete range is now Tier 4 Final, but at the same time, we can ship Tier 3 engines for many new cranes.

"At Bauma, our presence was much bigger than you’ve seen in the past. Our dealers have responded, we’ve got strong international distributors. With Baden, and others, that’s drawing traffic and interest. We’ve expanded our international sales and service staff, building that back up again. The longer attachments we’re coming out with, are geared to the global market.

"It’s been an interesting year, we had a strong run right up and through Bauma, that was a great show. But coming back, there was a lag, the positive energy didn’t really carry through to North America. We had a strong back log, but it coasted in for the rest of the year. Everything, from an inbound standpoint was slowing down. It’s all about watching inventory and finished goods, matching that closely to the build schedule. I think it coughed and spluttered a little, but the engine is running.

"Prior to ConExpo, we’ve seen confidence driving the recovery. But the real test is when you get home. Inbound orders have picked up, with signs of strengthening, getting back to decent levels.

"I think the rough terrains are pretty even, the trucks are good, the all terrains have a little bit to go, and the lattice crawlers are finding their way back, especially in the larger class."

Across the Atlantic, Liebherr’s three construction crane divisions are also seeing the benefits of reorganisation, and of new approaches to crane design.

The main organisational change came last year at Biberach, Liebherr’s tower crane division (which, until that point, included its concrete plant segment). Biberach managing director Dominique Tasch says, "The tower crane and concrete divisions were split up about a year ago. The main reason was to allow the divisions to focus on their own activities and customers.

In 2003, Liebherr had moved from a regional to a group-oriented structure. Ten years ago, when Liebherr was first split into divisions, it was decided that as the concrete and tower crane facilities were close to each other, it made sense for them to form one division.

"Those divisions at that time were smaller. The number of employees in the group, was half what it is today. Since then, those divisions have grown, and our owners have decided that they could reasonably be split up. It really adds to our focus on customers and their needs.

"From an organisational point of view, we have two new departments. Tower crane solutions was launched at Bauma. It will be working on projects with customers at an early stage. Since Bauma, we’ve invested in people, we now have 24 on staff. Intended to grow until the end of this year, to 30 people.

"The second new department, is Tower Crane Centre. This team is taking care on a worldwide basis of used tower cranes and to rent tower cranes and accessories. Now, we have enough rental partners around the world, but this will create network between those partners and our own fleet. As all rental companies looked to increase utilisation, it took too long to get cranes between markets."

Biberach has been working to build its international manufacturing capacity. Tasch says, "We decided to start production of the 85EC-B in Brazil, with the plant becoming operational in late 2012. A second new regionally produced crane came in India, at the end of 2013. The next plant will be in Nizhny Novgorod, Russia, which will be operational from the end of this year.

There’s a focus on local manufacturing in growing markets. This gives us a nice manufacturing footprint for tower cranes, which are a product that take a lot of money to ship."

As well as developing what could be called a ‘mass-market’ global crane, the company is developing more targeted products. One such, aimed squarely at users in the USA, is a new big luffer, the 710HC-L. Tasch says, "We call it a combination of a cheetah and grizzly.

It’s a very fast crane, with high line speeds. It’s a big luffer that has been designed to replace diesel hydraulic cranes, which have some environmental and noise issues. In big US towns, diesel hydraulics were standard. Now, there are more electrically driven cranes."

Liebherr has already achieved New York City department of buildings type approval for its 542HC-L. It will aim for the same with the new, bigger crane.

LIebherr’s Ehingen truck crane and big crawler division has been facing the challenge of tight new engine emissions standards in developed markets around the world. To comply with the standards, engines need to be bigger, challenging engineering teams, particularly on smaller cranes.

Ehingen’s approach, managing director Christoph Kleiner says, has been a new single-engine approach.

"We have a world market release of the LTM 1160-5.2, 160t, the successor to the LTM 1160-5.1. It has a single drive concept, like the LTM 1300 that we introduced at Bauma, with a mechanical drive shaft. It has the same length of boom as its predecessor, but is stronger by 20-25%.

"We will upgrade the whole range, unless there is a successor. Exactly what we’ve got here on the LTM 1160, or what we did on the LTM 1300 as a successor of the LTM 1250. Every new crane will have a new engine, and the others will be upgraded. Due to the single engine concept, you can save weight on the upper, and this weight reduction can be put into load bearing components, which then gives you this quite remarkable 20-25% increase in capacity.

"We wouldn’t go for it across the range. For the very small cranes, you already have the single engine concept. From four-axle cranes, upwards, we had the two engine concept.

"But then we said, let’s try the single engine on the LTM 1300 six-axle crane. It’s the most tricky one, at the limit of where you can go with the single engine. It proved to be the right thing, with no fuel consumption increase and all the other features of the previous two engine crane fulfilled.

"As a logical consequence, single engine should be easier on the LTM 1160. Single engine, drive concept, is the direction many of the manufacturers are going. There’s less maintenance, less investment, for the same performance level."

Liebherr Nenzing, which builds smaller crawlers and harbour mobile cranes, has also upgraded its range. Managin director Gerhard Frainer says, "The LR 1250 is selling well. It’s based on the LR1200, with much better load capacity, it has a stronger main boom, and good capacities with luffing jib. In the 250t class, we’ve increased our market share already, even though it was only launched at Bauma. It’s made its mark, comparably to the 300t class, where we are a market leader."

In the Far East, manufacturers are also looking to grow sales regionally, and internationally. Tadano has, over the course of decades, built a global business in developed markets, first through its acquisition of Faun in Germany, and more recently with its acquisition of US telecrawler specialist Mantis. It has also recently been developing its regional manufacturing and sales in Asia’s emerging markets.

The company’s annual results were due out a few weeks after the event. However, CEO Koichi Tadano says that the company’s domestic sales for 2013 were on track, driven by Japanese prime minister Shinzo Abe’s ‘Abenomics’ stimulus and growth strategy: "We think we would achieve planned sales and profits due to expected rising of demand under Abenomics, the continuous demands for construction machinery in the recovery from the Great East Japan Earthquake [of 2011], and the upcoming Olympic/Paralympics games in Tokyo in 2020."

Tadano says that while demand had decreased in the Americas, this was offset by active demand in Southeast Asia and the Middle East.

Tadano is developing its sales and manufacturing footprint to meet that demand in South East Asia, with new sales deals in countries like Laos, and new subsidiaries in India, Australia and Thailand. Koichi Tadano says, "Our Thailand plant is a straight boom loader crane production site. We know that knuckle boom loader cranes are popular in Europe, but the straight boom type is popular in Asia and Middle East, so we prepared our plant to meet the demand of this expanding market. Our main target is Southeast Asia, where the commercial truck market is expanding in the Middle East, and also in Africa."

In Australia, Tadano recently established direct sales, through its new division Tadano Oceania, and launched new truck cranes specifically targeting this market.

Tadano says, "The truck crane, the GT-600EX meets road regulation for Australia, and is making smooth shipment results.

"Australia was a truck crane market in the 2000s but increasingly turned to small all terrain cranes, since the supply of truck cranes from Japan was stopped. However, we introduced the GT-600EX 2 years ago and smoothly increased sales due to its abiity to travel long distances, with lower maintenance cost, and without dismounting and transporting components separately."

Another new division for the Japanese market has been established in India. Tadano says, "We think India is the next expanding market after China. The current market for new cranes is small, but we think that it is very important to develop strong relationships with customers now. Thus, we think the subsidiary is our foundation to develop a relationship with customers in advance."

In America, Tadano once supplied all terrains through Link-Belt. With the end of that agreement, the company is now selling into the market directly. On show at Las Vegas was its range topping all terrain, the ATF400G-6.

Tadano says, "The ATF400G-6 has smoothly increased the orders received in North America. As sales of all terrains expand in North America, we’re increasing our sales staff. From now on, we think the best way to expand all terrain sales is that we build more enhanced after sales support for our customers."

Also in America, Tadano’s Mantis subsidiary has just launched its first telecrawler developed as part of the Japanese business. Koichi Tadano explains the fruits of this new collaboration: "We supported Mantis with our know-how of cranes and adjusted it to meet the customer needs for North America. Especially, we focused on the boom development and supplied some of the components from Japan. We will develop Mantis products to achieve a unique concept of crane, with support from Japan, and expand the sales in the future."

The final major new offering on the stand was a high capacity, 160t, rough terrain. Some observers have questioned the need for a rough terrain of this size. Koichi Tadano, acknowledges that this is probably the biggest rough terrain the modern market will support, but says it has a very clear niche: "Our rough terrains is mainly used for the energy sector. Plant construction and expansion in this sector doesn’t go horizontally, but vertically, due to the limited site area.

"So, a higher lifting height, with a longer boom was required. In addition, modules are getting larger at construction which means the higher lifting capacity is also required.

"We think we don’t need larger rough terrain cranes, since any crane bigger than the GR-1600XL will be too heavy, and would need to increase the number of axles, losing compactness, and reducing mobility, which spoils the merits of a rough terrain."

While the other manufacturers interviewed here have had decades, in some cases, to build their international businesses, many Chinese manufacturers only began a concerted effort to sell cranes globally in the last ten years or so.

Zoomlion has been one of the first to develop its global business, and Frank Zhang, senior president, international trading company, takes a leading role in that change.

For many years at the start of the century, China’s domestic market for cranes was so vast manufacturers could be excused for not looking overseas particularly hard. But now, that is changing.

Zhang says, "From the investment side, the Chinese domestic market has been slowing down. The government’s strategy has been to move from investment-driven to consumption-driven growth. Compared to 2012, in 2013, the overall market has been decreasing, there has been a 30% decline. End users and customers have capital and funding issues.

"We expect stable and sustained domestic sales in the coming year, because the new government are making macro changes to the economic environment. Even under this change, the crane industry should maintain. Investment is a key factor. The oversaturated issue should be digested in the coming years.

"The major point of the Chinese government’s macro-economic policy change is the new city/suburb organisation and changes to land policy: more farmers will become city residents. Investment by central government in residential construction will continue."
With Zoomlion now expecting steady growth domestically, rather than the hand over fist sales of previous years, its overseas business is increasingly important.

Zhang says, ""Even though the Chinese crane market will stay the same, overseas markets have great potential. Overseas markets are now 70% of potential market for our cranes. We have to explore this.

"We’re still trying to implement our globalisation strategy, focused on the main emerging markets. In India, we have joint venture enterprises. In Brazil, we’re building a factory. Overall, we are confident, but economic conditions have fluctuated a lot.
"We did a great job in Indian market last year. In the Indian mobile crane market, we took 70% of all Chinese imported cranes.

"In Brazil, for the past five years, we have increased sales by an average of 50% each year. Last year, customers had difficulty with finance, but we still did well.

"For the future global market, we still expect stable sustainability, we do not expect the same over-saturation as we’ve seen locally.

"In Brazil, our new factory will open next year. The tariffs in Brazil, set up a trade barrier. So we need to expedite our production process.

"Zoomlion has a very positive asset structure. Fixed asset investment is less than 10%. Now, we will be very cautious in Brazil. We’re starting with concrete machinery, mobile cranes and tower cranes. We plan to localise to over 60% to enjoy Finame finance."

For Chinese manufacturers, entering fellow emerging markets like Brazil and India poses one set of challenges. Competing well in developed markets poses even more.

Zhang says, "In Europe, Zoomlion is following a stable strategy. There are safety regulations we need to digest. We’re also looking for opportunities with dealers in the USA; we have one in Germany already. We have an R&D centre in Germany, since we acquired Jost technology. In terms of value for money, we are at an advantageous position.

"For big tonnage tower cranes, we’ve researched the luffing jib. This is best for the American market. The tower crane market demand is limited, so we will not be focusing on small tonnage, but on bigger tonnage cranes.

"For tower cranes, our production facility layout is very important, due to transport costs. We developed a very advantageous layout in China. We aim to do the same around the world, with a series of factories to control logistics costs."

One big hurdle for Chinese manufacturers is aftersales and support. Zhang says, "For overseas sales, we’ve separated our support system and sales system. We try to categorise our regional support system, to optimise how we offer support. We have spare parts, finance and logistics network in each region.

"For example, for concrete machinery, we are doing very well in the European market. If we independently set up a support system for tower cranes, it wouldn’t make sense. So we use the overall platform of Zoomlion to optimise support. It’s like an airport hub: we distribute our service like an airline. Every product line is like the airlines, and the Zoomlion platform is like the airport.

"There were a lot of small players in the Chinese tower crane market. The market was not safe. We increased the safety factor. Now, many of these small players have gone bankrupt.

"For the mobile cranes, these are very special products. The customer has high requirements for after-sales service. The business model for mobile cranes is dealership, so we want to rely on dealers to have support system.

Since 2006, we have looked for dealers, like Global Crane Sales. All sales and service will be done by local dealers.

"We support the customer at two levels: first, by Zoomlion regional centres, spare parts, and logistics; second, by dealers, who have sub-spare parts and logistics. Up to now, we have developed around 50 dealers around the world. Most have been co-operating with Zoomlion for over ten years. Zoomlion will not easily change dealers, we train the dealers."