Just before he retired, Wacker Neuson’s U.S. CEO Chris Barnard spoke with RER about his career with Wacker Neuson, the growth and future of the rental industry, the Internet of Things, transformations in the retail industry and more.
RER: You have been leading Wacker and Wacker Neuson Corp. a long time. Could you sum up how the company has changed during this era?
Barnard: When I joined Wacker in 1997, we were a much smaller company focusing exclusively on light equipment. We had an extensive but narrow distribution system with dealers and small rental dealers. In 2015, I am leaving Wacker Neuson Corp. a larger company by many multiples, with an industry unique product line with a much expanded line of traditional light equipment and with the broadest and most unique line of compact equipment in the industry. I cannot emphasize how strategically important our broad line of equipment is to our future strategy. Our distribution has evolved into a broad multi-channel customer-segment-focused system that is again one of the unique strengths of Wacker Neuson.
Some things at Wacker Neuson did not change in these 18 years: our passion for the end-user process requirements, our total commitment to independent and profitable distribution, our commitment to provide the channels and their customers with “all it takes” in terms of broad product and support offerings, our global footprint, our values structure, and our commitment to leading technology.
I am very proud and fortunate to have been a part of this transformation working for a remarkable company.
Let’s discuss your contributions. What are some of your contributions to Wacker Neuson and some of your unique achievements?
I am certainly very pleased with the overall evolution of the business in all functional areas during my tenure over the past 18 years. These achievements would not have been possible without the support of an outstanding team of people that worked closely with me to achieve the many successes we achieved as a company. Together, we advocated for the best interest of our business to an outstanding executive board that gave me all the support and resources I required. That is the beauty of Wacker Neuson corporate culture in that we all work together globally for regional success.
How would you like to be remembered by people who are involved in the industry?
I hope I am remembered as a knowledgeable, committed, honest, frank, visionary advocate for our industry manufacturing and distribution segments. I have been in the construction machinery industry for more than 40 years and although somewhat disappointed by the relatively slow historical pace of change in the industry, this bodes well for the future for the manufacturers, such as Wacker Neuson.
As an executive within the industry, I have always been an advocate of change and as a result Wacker Neuson has invested heavily in the future by focusing on the two critical essential success factors for our industry: products and distribution. The economy is changing at exponential speeds and the construction industry will have to follow. Wacker Neuson is ready and I am very proud to have been a part of this vision.
Obviously a great part of your years at Wacker Neuson involve your relationship to the rental industry. What are some of your observations about the rental industry, and reflections about years of working with the rental industry? How would you say the equipment rental industry has evolved during your years at Wacker/Wacker Neuson?
When I joined Wacker in 1997, as the rental business model expanded it was being done by primarily small rental dealers. Although the rental business was growing, it was growing at linear growth speeds through 1998 when consolidation and professionalization in the rental industry accelerated the growth of rental. Since then, we have seen rental grow exponentially where today in some product segments rental has the main share of the market. The professionalism and focus that the large rental companies brought to the rent-to-rent industry was necessary and a huge contribution to overall construction contractor efficiency providing them with competitive national scope services.
Wacker Neuson has always had an excellent relationship with all the large rental companies. We were early adopters as preferred suppliers to the large rental companies. The rental industry today is characterized by extreme professionalism and high financial and operational performance standards. This type of professionalism is necessary and welcome in the construction machinery industry.
Wacker Neuson has always been and will always be committed to forming a tight partnership with the rental industry providing the channel with all necessary business requirements. Wacker Neuson benefited from being one of the industry’s early preferred suppliers to the rental industry and will continue to benefit by forging ever tighter relationships with the channel. In the rapidly changing economy, neither channel nor manufacturer can operate efficiently without a very close relationship understanding the key business drivers.
What are your predictions for the rental industry in the years to come?
I generally feel that rental will continue to expand its market share in the industry. However, in today’s exponential economy, the one thing that we can be assured of is that we can take nothing for granted. Today’s business model is not assured of future success, and historical growth rates can accelerate and decelerate at incredible speed with the advent of new business models driven by rapid technological change.
As an example, the “Internet of Things” driving the connected economy, the rate of digital change, and the need for transformation could very well have a significant impact on how industry -- not just the rental industry -- evolves. However, I am confident that the proven professional management in the large rental companies and their remarkable ability to change, as we have seen in the past 10 years, will assure rental a major part of the industry. This rapid change will require closer partnerships with leading preferred suppliers, such as Wacker Neuson, to quickly identify and implement product and support needs in a rapidly changing economy. This is where companies like Wacker Neuson provide value to the rental industry.
What are some of the suggestions or advice you would give to the rental industry going forward?
The rental companies and preferred suppliers need to work closer together to understand the impact rapidly changing technology will have on the delivery of the rental product. As an example, today we talk about the importance of telematics when in reality we should be talking about the Internet of Things and how this impacts product design and support at the manufacturers and how this will impact the rental business model. Telematics in my judgment is a sliver of a much bigger issue. We see connectivity, communication, relevant operating and process data gathered in an open environment and not in a proprietary and competitive environment, and the growth of mobility having a growing impact in the overall industry including rental.
How would you say equipment has changed and evolved (for Wacker Neuson and the industry in general) during the time you’ve been with Wacker/Wacker Neuson?
Equipment has had to evolve as the channels and contractors evolved. Technology and features of a product vary by channel and by end-user needs. As an example, the concept of rental ready and bullet proof bring to mind the requirements of a typical rental market product. Other end-user markets may have different requirements for the same product so manufacturers have to be ready to adapt model designs and features quickly. This will accelerate product time to market demands on manufacturers.
Regulatory requirements have made a huge difference in the industry. We are concerned with the accelerating pace of regulations on the design and cost of equipment and consequently the impact this has had and will have on the industry and on contractor costs.
What are some of the new directions you expect to see with construction equipment and what are some of the things you’d like to see develop?
Construction equipment in the future will be a part of an economy that will be driven by technology and connection. We will see a trend where the needs of contractors and the needs of the marketplace in such an economy will dictate what products and services have to be provided and what the contractor is willing to pay for it.
The rapid transformation in the retail industry and the impact of concepts such as Omni Channel and “last mile logistics and services” has had on the competitive landscape is almost mind boggling. All of these changes have been mandated by rapidly changing end-user needs in a connected world. Certainly a piece of construction equipment in rental or retail is different to a typical retail product but we need to be mindful of the need to understand the benefits of connected technology and the need to have the right and relevant data available on demand to drive the business model. This is not a matter of whether but when this will impact our industry. We need to be ahead of the curve. Wacker Neuson will be there.
