Serge Bosche, president of Manitou in North America, has served the company for 25 years and has helped guide the manufacturer through good times and bad times. In this candid conversation with RER's Michael Roth, Bosche talks about the current market, how Manitou developed its high-quality engineering, its acquisition of Gehl and the company's growing U.S. manufacturing capability.
RER: When did you begin with Manitou?
Bosche: I started in France in 1983, so it's been 25 years. My one and only job out of college. I came to the States in 1985.
Did you speak much English then?
I studied here in the U.S., I have an MBA from Bowling Green in Ohio. So I actually joined Manitou because I knew they had a subsidiary here in the U.S. and that I had a good chance to come to the U.S., which I thought would be a good experience for three or four years. Here I am 23 years later, and I've enjoyed every moment of it.
Manitou is well regarded for high-quality engineering. How did this emphasis develop? Do you devote a lot of resources to research and development?
When it comes to the engineering of our products, it's a mix of two things. Number one is the fact that the history of the company has always been to grow through listening to customers. We've always been very close to the users of the machines and listening to them has made us what we are today. They know more than we do about what they need in performance, features and benefits. That's the backbone of the company, that ear to the marketplace to come up with products that the customers want and need. Second, when it comes to the look of the machine, the European marketplace puts more emphasis on features and looks, and the ergonomics of the machine. We see that happening here to some extent in the U.S. marketplace.
For example, the MRT forklift truck technology is incredible for a forklift. It's closer to a crane, a 360-degree rotating machine, with sophisticated systems. But this did not develop because we were dreaming of a particular machine. It was the marketplace saying it would be great if we could come up with a machine with these features. That's really the background of why we are at this stage today. We invest significantly in the future, coming up with new products on a regular basis with features and performance that the marketplace needs.
What are some of your new products?
The latest product is our MHT, a line of high-capacity telescopic machines. Our biggest model is the 10210, a 46,000-pound telescopic machine. It's a very specialized segment of activity, we've had very good success with so far in varied industrial, mining, heavy construction, and military applications. We currently offer three models with different capacities, and we plan on expanding that product offering.
What inspired Manitou to acquire the Gehl line?
The primary factor was gaining market share here in North America. We've always been more of a niche, specialized player here in the U.S. Manitou, on average throughout the world, has about a 30-percent market share. One out of three telescopics used today in the world is Manitou. Our weak spot, when it comes to market share has always been North America. So Gehl has been a good fit for that. It has good products, with a good market share here in the U.S.
From a corporate culture standpoint, our two organizations work very well together with common values. We look at distribution in very much the same way. We can consolidate our place as No. 1 in this business worldwide by accessing market share here in the U.S. with a couple of valuable recognized brands, Gehl and Mustang.
The second reason is Gehl is very successful with its skid-steer loaders and we think we can offer quite a bit to that business from a world distribution standpoint. Gehl has done very well in Western Europe, they have a good distribution system. But we can leverage our Manitou world distribution and benefit quickly in terms of volume.
We have virtually no overlap in terms of products, which is nice. We think we've got the best of both worlds now where we can address the specifics of the market in terms of organization and product. That will bear fruit for years to come.
Continue on Page 2
In regard to the cultures fitting, Manitou was already a major shareholder of Gehl.
Yes, exactly. We started our relationship in 2004. Gehl was distributing some of our machines and we were distributing some of theirs. At that point, we took 15-percent ownership in the company. So we've been working together closely for the past four years, learning one another's culture. It's like a marriage; you have to make sure there's compatibility. So far it has been successful.
Will you maintain the Gehl brand name?
Yes, absolutely. A big part of the value of the company is the brand and the network. So our intent is to keep the Gehl, the Mustang and the Manitou brand names present in the market. Our business model envisions three networks, three brands and making sure that those brands are nurtured and gain market share. With increased market penetration, you can take care of your customer better, and have better support systems.
Where will the manufacturing take place?
In three locations here in the U.S. One is Yankton, S.D., where we manufacture the telescopic machines under the Gehl and the Mustang brands. The plant was expanded about a year ago. It's got good capacity, good manpower and it's tooled for telehandlers. It's a very efficient plant. We may add some telehandlers that are currently built in Europe, just so we have a good mix of product here for the American marketplace.
Our second plant is in Madison, S.D., where we build all the skid-steer loaders, Gehl and Mustang branded. It's a specialized production facility for skid-steers. In our Waco, Texas, facility, we will continue to build the masted, rough-terrain forklifts, and the truck-mounted forklifts, the more specialized products that tend to be more custom-built.
Is the ability to do custom orders one of the main strengths of your manufacturing?
For some products, yes. This has been our approach with the Manitou brand for many years in the U.S. We're a niche marketer, we tend to handle smaller volumes, but wider specs. For some other products, such as construction telehandlers, our strength lies in being an efficient, low-cost manufacturer.
How do you think the economy will be in 2009, and how long will it take to turn around?
I have no great expectation for '09. Maybe a little uptick hopefully towards the end of the fourth quarter, but the problems facing the economy are such that it's not going to happen in one month or two months. We are prepared for the most part to weather a tough year and be ready when things break loose again.
Do you find conditions pretty much the same around the world?
Yes. That's what is different this time around. We've seen a very sudden slowdown back in September and October of last year around the world. Typically business will slow down in one area and then take a few months to migrate to other places in the world, whereas this time it has stopped everywhere and I think it's primarily because there is no credit available. We're sitting on many orders for customers who want and need the equipment, but are having a tough time getting financing for those machines. So it's not like the world has stopped — the world has stopped financing.
Even among customers that have good credit?
Yes, absolutely, and many have been in business for a long time, but can't get a bank to lend money. That's the big issue and I think it will take a stabilized and healthier banking system before we see a recovery.
Any thoughts on what rental companies can do during this period?
They are a smart group of people. The rental world has come a long way. I think they do a great job at managing their businesses and I wouldn't be in a position to tell them what to do. Obviously, for some of our product anyway, we depend on the rental marketplace, but we can't force them to take product if they don't need it. The economic slowdown is creating new issues and new needs for the rental industry, and we, as a vendor, want to be aware of and responsive to those needs.