JLG reports faster than expected growth
By Murray Pollok28 March 2011
Wilson Jones, president of JLG Industries, said the market recovery was proving stronger than anticipated at the start of this year, with the top 20 rental companies in North America increasing investment; "We are seeing CapEx [from these companies] 30 to 50% higher than last year."
Speaking to IRN at Conexpo, he said the larger independents "were in the same game, but when you get down to the midpoint and below, they are still [waiting to invest]." He said he thought it unlikely that these smaller renters would resume investment this year.
"Construction spending is still low [in the US] - so the order intake is hard to believe", said Mr Jones, "But it is pure replacement."
Mr Jones, who joined JLG last year from sister Oshkosh company Pierce Manufacturing, said JLG was also seeing positive signs from Europe; "Two months ago the outlook was still bleak. Now there is more optimism." He said JLG was taking some significant orders from European renters.
JLG, which has recently responded to rising raw material costs by increasing its prices by 3.5%, continues to increase production capacity to meet demand and has hired around 700 US workers since the market bottomed out.
Even so, the company is still engaged in restructuring some of its European operations. At its Maasmechelen plant in Belgium, production of self-propelled booms is being transferred to its plant in Romania and electric scissors to the new Tianjin facility in China. It closed its plant in Tonneins, France, last year.
Maasmechelen will now focus on producing telehandlers for JLG and Caterpillar and also housing the European parts operation.
The boom in aerial platform rental in Brazil has prompted JLG to consider local manufacturing - Brazil alone accounted for 10% of its sales outside North America last year. "We're still studying it - nobody has broken ground there yet", he said, "We're taking a wait and see approach."
Manufacturing in Brazil will become more important when a competitor decides to start, since that will trigger considerably higher import taxes on machines made outside Brazil.
Meanwhile, Mr Jones said JLG was now taking a longer term approach to its product development efforts. It has established what it calls a Multi Generation Product Plan (MGPP) under which a five year development schedule is being established - a long term approach borrowed from the automotive industry.
"Innovation has been a big part of JLG's DNA and we're going to run with that", he said. This will include further development of niche products - recent examples being the LiftPod and the agreement with Hinowa for its crawler models (shown in JLG colours at Conexpo). Mr Jones said sales of LiftPods were now in the low thousands and that progress was ahead of expectations. The company launched a smaller version of the LiftPod at Conexpo.
"We're always looking at these niche areas because you get better margins", said Mr Jones, "There will be more niches, more filling out of gaps." He would not be drawn on specific plans to add products such as 12 m compact RT scissors, or larger double deck scissors around 18 m, which some customers have been requesting.
IRN also asked about the possibility of JLG cooperating with Bronto Skylift, now that the Oshkosh company Pierce has become the North American distributor for Bronto's fire fighting platforms. Bronto said that it will continue to sell to the industrial market - including rental companies - via its existing North American distribution network.
As a former president of Pierce - and before that an employee of Emergency One, which used to own Bronto - Mr Jones knows the Finnish company well; "They want to work on the fire side first...I'm sure down the road there may be opportunities to talk."
See the April issue of IRN for details of the new JLG product launches at Conexpo, including its new 150 ft 1500SJ and 34 ft 340AJ booms.