Photo by LGMG North America
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Interview with Craig Paylor and Michael Paylor: Reduce Acquistion Costs

Oct. 9, 2020
Craig Paylor, president and CEO, LGMG North America; and Michael Paylor, inside sales and training manager, talk to RER about the effects of COVID on the market, the company’s next level of boom lifts, why demand for hybrids and electric units will grow.

RER: What are the latest safety developments from your company?

Paylor: We have spent as much time within the company safely taking care of our employees as we have been working on the new ANSI regulations. As for our machines, because we are a Chinese company, we have been building for the Chinese market. We've spent the last five years adding several safety features to comply with the new ANSI standards. While some of these changes have delayed their introduction into the North American marketplace, we are pleased that the models introduced have been well accepted and have customers anxiously awaiting the rest of our growing product line. All of these machines will meet all of the newest standards.   

What impact has COVID-19 had on your business and what do you expect going forward? 

The virus has had major impact on the buying patterns of all rental companies, both large and small. The change in buying patterns resulted in major problems for all the leading manufacturers in the MEWP business. Small to midsize rental companies who don't normally hear from the leading market share manufacturers are suddenly hearing from them because they need sales to reduce massive inventory levels. This push for business from companies other than non-traditional national rental companies has a second effect as it causes the prices of the equipment to reduce. Rental rates are down due to lack of jobs, and this causes even small rental companies to hesitate to spend money on new machines when there is no clear indication when this virus will be over or how it will affect the November election. Both could be major factors in determining the rebound in 2021 and beyond.  

What have been the latest developments in your company’s product line in the past year

Because we are only 18 to 24 months old in the North American market, we had several basic product model introductions. We introduced our full line of electric drive industrial scissors, which have been very well received by distribution. We introduced our first 65-foot boom to accompany the new LGMG 52-foot platform height model that we feel will provide a niche size between the 45- and 65-foot heights. We also started delivering our electric-powered and diesel-powered RT scissors, that ranges from 32- to 53-foot platform height and 69 to 90 inches wide. These models are specifically designed to reduce acquisition costs yet still provide plenty of rough terrain gradeability and capacity. Finally, our design team has launched into the next level of boom lifts that'll extend from 80 feet to 150 feet. These can be expected in our markets starting in early January 2021. In short, we are playing catchup to the industry leaders, but we are doing so with a full and very competitive product line.

What have been the most important recent trends in aerial product development and what trends look most important in the near future? 

If you read all the latest news from all the established players in the MEWP business, it sounds a lot like the machines are getting more and more technical. There are new special safety features intended to continuously keep operators safer and safer have added some complexity to the machine operation, which is a good thing, adding more "new age" features such as advanced telematics, GPS positioning, wireless and remote machine diagnostics, and many other advanced features. The cost would also increase, not to mention the level of skill for mechanics required to complete the repairs of such systems. We all know all companies require mechanics in the service position to be successful.

If rental fleets of multiple types and brands of equipment all continue to add technology to their machines, both the mechanic will be harder to find and much more expensive to afford. Following these additions to the machines, either the price has to go up for the rental company or the cost has to come out of somewhere else. In our case, we are trying to simplify the machines while only adding the items that customers want or they can get their money out of. Not that the other highly specialized options are not nice, but are they affordable? LGMG is focused on keeping everything from pricing, to standard features of the machines we build, to even our pricing methodology, as simple as possible. Afterall the one trend that is always the most important is who has the best return for the money.

Now that new ANSI standards have become a reality, how would you assess the impact they are having so far?  How are customers adapting to newer machines with load-sensing technology, terrain-sensing, indoor/outdoor restrictions and so on?

In large part it is much too early to tell. Many customers have not bought enough of the new machines to tell how they feel. The load-sensing technology will become what I think will cause the most problems. A few pounds here or there on the platform, with the machine moving or running over something that causes a "bump" in the platform could shut a machine down in the middle of a critical job at a time very inconvenient for the operator or the company involved. It is easy to say these sensing features will make the machine safer, but the difference between a strict safety mandate and a machine that operates safely but conveniently within a suitable margin of error will eventually settle the issue.

As for indoor and outdoor guidelines, there are multiple ways to accomplish this with every manufacturer having their unique way of addressing the issue, it will become a larger issue as operators do not always use the same brand of equipment so everyone will be forced to adjust what they feel comfortable with. Frankly, any system that gives the operator the ability to turn an indoor machine into an outdoor machine by selecting a button and counting on the operator to do the right thing is overlooking the nature of operators in general.

What level of demand are you seeing for electric MEWPs, hybrids, alternative fuels?

Without question, electric power is the way of the future especially with all the advancements in lithium batteries. Hybrids and other alternative fuels will also develop quickly over the next few years but need significant advancements in infrastructure to support them. Much the same way electric cars needed some infrastructure advancements 10 years ago. This will continue to advance as the batteries continue to evolve in power generation, duty cycle, weight, cost, and serviceability. 

How do you see adoption of telematics systems changing the rental industry? 

Like so many other items discussed here, telematics will eventually be a wonderful cost-reducing addition to the rental industry by supplying critical information to sales, service, and transportation departments within an organization. The question is when will the time be right based on the costs of such units, the degree of difficulty keeping them operating correctly, how many different styles there are, and how much service attention they require. Like the original GPS systems from 15 to 20 years ago, there were many types, but they all operated off a different platform and nothing conformed with one another. Like SmartEquip is for distribution to manufacturing operations where everyone works within one common system, the right telematics system would be one where regardless of the number of providers for telematics they would each operate the same so the users did not have to jump from one system to the other.