The Genie booth is usually one of the largest and most prolific every year at the ARA show and last month in Orlando was no exception. RER enjoyed the chance to sit down and talk for a few minutes with Genie president Simon Meester, who shared his enthusiasm about the company’s new products, the booming interest in hybrid and electric aerial machines, the challenges of the supply chain, war in Europe, aerial safety, the economy’s future, and more.
RER: What’s new with Genie since the last ARA show?
Meester: Time flies! Always great to be in ARA and it feels like we are kicking off the season for real like we always used to do with the ARA show. I’m not going to lie, I’m incredibly proud of what we’re showing here today and what it looks like. I know I’m biased saying that, but I’m really proud of the way our marketing team put the stand together, it looks really cool.
In terms of what’s new at Genie, a lot of things have changed. We’ve announced a new facility that we’re building in Monterrey, Mexico, and we’ve obviously announced a lot of products that we’ve launched. The operational reality is we’re still very constrained on materials, which is unfortunate. I would have liked to go into this new season with more material availability so that we could build and ship more products, which we obviously still are going to try to do as much as we can. But we are still being constrained today and we still have a lot of disruption in our factories and our assembly lines and in our parts warehouses. The industry is still struggling quite honestly.
But I do believe that eventually free markets will balance themselves out so we will get into normalcy again at some point. When you think about all the investments that are being made in infrastructure and the [CHIPS and Science Act] and what have you, we have to get our act together, we have to sort this out. Because customers have already aged their fleets and so we have to, it’s really a supply game at the moment. We have to keep pushing and we have to keep ramping up. It’s good to be at Genie!
As we began hearing about the shortage of chips, I kept wondering, “Is there some reason why here in the United States we can’t make those?”
That’s why we had the Chips Act, right? There is no reason why we can’t build those ourselves here in the United States. A lot of technology originates from the United States in the first place, I think it’s the right thing to do to onshore that capability because quite frankly chip manufacturing is critical with the role they play in our machines. There are about 250 chips in any of these machines that you see here. About 250 microchips and that’s only going to get bigger and bigger going forward.
I guess any aerial equipment manufacturer is pretty much in the same boat.
I can’t really speak for the others but from what I hear it’s really an industry phenomenon and the industry is struggling with the supply chain. It’s certainly not unique to Genie and it’s not unique to aerials. Any capital goods manufacturer is struggling with supply. It’s something that we need to catch up on. It’s obviously amplified by Covid and the Ukraine War and geopolitics, and that kind of extended this whole ordeal a bit more.
What are some of the other effects of that war? Obviously, fuel prices have been affected?
Mostly Europe and the supply chain in Europe. Obviously, the impact on energy is impacting us although most European governments have contingencies in place and have other ways to get their hands on energy. But we have a large facility in Italy, and we have a reasonably sized operation in The Netherlands, so we’ve been following the developments around energy availability quite extensively. Then also the refugee situation in Europe. There are a lot of Ukrainians looking for shelter and there’s a humanitarian crisis going on as well. And then we had suppliers that were sourcing materials from Ukraine and then got into trouble and that led to extended lead times on materials. It’s hurting us in many different ways.
Looking at the industry overall, is the aerial industry safer than it was 10, 15 years ago?
Absolutely, oh without a doubt. We’ve made tons and tons of progress. And I think the numbers speak for themselves. The numbers of recordable incidents have gone down. It’s not just because we’ve moved from traditional conventional ways of working at height to aerial lifts, but it’s also that we get smarter and smarter every year in managing and controlling them so the finesse at which our machines are controlled at heights in their envelopes and the closer you get to the jobsite and the work that needs to be done, you get a lot more electronics involved. It’s almost like a digital twin to what’s happening on the jobsite. We now have computers helping us with safety. It’s not just the analog way of doing it in the past, it’s the digital way as well so it’s a continuous improvement. But it’s miles better than it was 10 years ago.
You have multiple accessories to help with safety.
Yes. And our new 13-foot platform, I don’t know if you’ve seen it. It provides more moving space. That, in itself, provides a safer working environment. We have the netting, which is important because all sorts of stuff falls out of platforms, that creates a hazard in itself. We have the anti-lift devices where the boom stops working the moment it senses any type of obstacle. There are a lot of accessories and features in our products today that have made us safer. We’re in the safety business, that’s what we do.
It seems the business is strong around the world?
Again, it’s mostly a function of supply. This is not an industry that is currently struggling with demand or any problems from a growth perspective. Projects are still out there, there are a lot of investments coming our way, it’s just our ability to produce the product at hand, including overseas.
Any particular areas of the world where they haven’t really discovered aerials, that could be the next growth areas?
I’m thinking about Indonesia, India, Argentina. Those are still markets that are at the very very early stages of adoption and those are massive economies when you think about it, and they’re not even using aerials today. So, the global adoption of this type of product still has many years to go. Look at what happened in China the last five years, how massively that market has grown. We’ll see the same happen eventually in India and some of these other large economies.
I guess five or 10 years ago you’d walk around Shanghai and not even see an aerial.
Yes. And now China is one of the largest aerial markets in the world.
How about issues like inflation and high fuel prices? Are you concerned about those?
Fuel prices have come down a little. So that’s good. Of course, we are concerned by inflation. When the Fed hikes interest rates, it’s been a slow-down investment, which will cut down consumer spending, which might eventually lead to a recession. But we’ll have to see how it’s going to play out. Six months ago, we were worried about a hard landing. Then it became a soft landing, and now I was reading in the Wall Street Journal that there may not be a landing at all.
I actually think that there could be some sort of correction, some sort of dip. Will it be of material impact on our industry? I don’t think so. We have enough work to do. And it’s not that we are selling luxury goods that we can do without. These are products that we need to build roads and bridges and universities, so I’m not necessarily worried as a businessperson about inflation. But naturally you want the entire economy to do good, not just your own. In that respect, I hope we get the softest landing possible and find a way to keep the economy going as best as possible.
I’ve heard suggestions that perhaps a slowdown would allow the supply chain to catch up.
It could very well be. To your point I do believe that free markets will balance everything out eventually. That’s exactly what we need is some sort of balancing.
Overall do you see this as a strong year in the rental market?
Yes. Our customers are very optimistic, and we are optimistic. We think that the whole infrastructure investment will kick in late this year or early next year. Together with the Chips Act so it will be a strong year and we believe 2024 will be a strong year, and we believe 2025 will be a strong year. We believe this industry is on a good run the next couple of years.
Will there be particular areas you can talk about that you’ll be concentrating on?
We’re focusing heavily on electrification. We’re very pleased with the investments we’ve made in Acculon Energy, and Apptronik Inc. Acculon will help us go to market faster from a battery systems standpoint. And the investment in Apptronik we are excited about because we think that labor will continue to be a scarce resource. Maybe not for the next year or two, but from the long-term outlook in this industry we do believe there is a space for robotics and automation, and we are excited about that investment.
You’ve invested heavily in electric equipment. Are customers coming to the booth and asking about electric equipment?
Probably the most popular products that people are asking for are our hybrid solutions because in many outdoor applications, we don’t think the infrastructure is there to support fully electric solutions, so our customers are asking for hybrid solutions. And I’ve made that point a couple of times: Just because technically you can do something doesn’t mean it’s the right thing to do for your customers. So, we offer easily a full range of electrified products, which, by the way, 70 percent of our portfolio already is. We could say let’s electrify the remaining 30 percent, but our customers are telling us they have much more use for hybrid solutions than fully electrified solutions, because the charging infrastructure is not there.
That will change eventually.
Eventually yes. The key is to make sure you do it at the right time for the customer.