Fearon expects solid albeit slightly softer demand over the next couple of years Photo by Genie
Fearon expects solid, albeit slightly softer, demand over the next couple of years.

Interview with Genie President Matt Fearon: Opportunity to Differentiate

RER sat down with Matt Fearon, Genie President, Terex AWP, at the recent ARA show, where Fearon discussed the impact of the new ANSI standards, the company’s varied new products, its new telematics offering, the growing interest in hybrid technology, and more.                    

RER: Let’s start with the new ANSI standards. Can you give a bit of an overview of the impact of the standards? 

Fearon: We’ve known the ASNI standards were coming for many years, and we’re more than ready. We use the standards coming as an opportunity to differentiate, and I was really proud of our organization because our team members really looked and said, “OK, we have to meet the new standards so let’s use this to come up with a way to differentiate.”

One of the things we’re really emphasizing is innovation. It goes back to the DNA of our company. I’ve been telling the teams whenever you come up with some way of innovating make sure you can connect the dots to how it drives rental return, how it drives productivity. So, we looked at the standards as an opportunity for us to introduce the XC product line. We looked at the scissor lift line, and we knew there was going to be differences in the indoor and outdoor rating, so we have taken that as an opportunity to incorporate changes that will make it easier for rental companies to manage their new ANSI-compliant fleets.

We also put a lot of time into training – online training, and information, because we know some of the larger rental companies are very sophisticated, they’ll figure out what has to happen, they have departments to make it easy. Other companies are asking, “What’s changing?” So we try to make it easy. We’ve had Q&A sessions online, we’ve been talking to customers for a couple of years now, so we’re ready and we’re embracing it, and we’ll come out of it with an even better portfolio of products.

Regulations can be burdensome but equipment improves at the same time, right?

Yes. I think equipment does improve. We manufacturers have to step up and look at what are the requirements here, how do we integrate that into our machines and make machines even better, so we all have a piece in the value chain. The manufacturers have a piece, the rental companies have a piece and construction companies have a piece. From my perspective, I can see that everybody is taking it seriously. And, they are taking ownership of making the products and construction sites better and safer, so it’s good.

Are all the machines you are presenting at the show “ANSI-ready” or are some of them not quite there yet?

Yes, everything we showed at the ARA Show is ANSI-ready. We’ve known the standards are coming. With a lot of uncertainty in 2018 about when the standards would go into effect, we worked hard leading up to 2019 to make sure Genie products are ANSI-ready when the standards take effect.

Are customers now asking about the standards and requesting equipment that is ANSI-compliant? Are rental companies that aware?

Oh yeah, they’re aware, the awareness is growing, especially the big rental companies. They know it’s coming. Some come in and are shy and say, “What are the new standards?” Or, they ask “What does it mean to me?” And, we make it really easy for them to get that information so they are aware.

What are some of the new innovations that you’re excited about?

We’ve got some great innovations out here. It starts with the telematics, and that’s a big step for us because we’re putting it on all of our booms, all of our scissors, all of our telehandlers. That will happen in the second quarter, and it will be phased in around the world with the three-year subscription. We’ve got it tailored: Customers go in, they go to the portal and there are dashboards in there, and they’ve got all the pertinent information that a rental company might want right there. And, they can tailor it even more to fit their specific needs. For example, the larger rental companies can reconfigure it with data.

This is important because telematics is going to change the way the machines are serviced.   From a rental company standpoint, there’s not enough service techs. And, this is a solution for that. If we save one service call per week for a rental company, which I think is extremely conservative, that’s worth a lot. They don’t want to send a truck out for a couple of hours to fix a dead battery, and it’s hard to make money that month on that machine. So, I think that what we’ll see is the acceptance and the adoption of telematics is going to accelerate in the next few years. And from the manufacturers’ standpoint, there are things we can learn about machines. We want to know how to make machines better, we want to know how they’re used, we want to understand do we have too much material on them, because rental companies are constantly telling us “you got to get the cost down, we can’t get the rental return.”

And then we’re battling because the standards have asked us to add some things, so we’ve got to be creative on our side to help drive the cost down. So, telematics is one of the innovations, there is also the electric drive on the scissor lift, we’ve got a little micro scissor lift that has electric drive. Next to that, we have a scissorlift fitted with lithium batteries, which is a really interesting trend that we’re seeing, that I think you’re going to see continue to gain momentum because the battery technology is getting to a point to this industry where it can be affordable. If you take the total cost of ownership of the machine into account, because the lead acid batteries that have been used in scissor lifts for decades, they don’t last very long within these scissors. You have to water them, so there’s maintenance, and replace them every two to three years. If you’re holding on to a scissor lift for eight years, it gets expensive. We see the technology getting to the point where we believe we can put it in there and have the total cost of ownership improve. And, the batteries also charge faster.

I’m excited about 2019 because we’ve got battery technology evolving, telematics is evolving, we’ve got the electric wheel drives, we’ve got the hybrid technology and we’ve expanding our XC product line. Combining some of the different technologies, and you can see the industry changing.

Then there are a lot of accessories, a lot of examples that we’re listening to customers. There are two main things that we’re trying to do: We’re trying to make sure that we’re completely tapped in to what customers are asking us for and pushing our teams to be the innovators. And, we’re pushing for purposeful innovation, that’s really what our recipe for success.

It looks like Genie is developing the hybrid technology significantly.

It’s the early years, and I feel that Genie has fully embraced it. I feel that Genie is leading in the hybrid technology, there’s lots of different hybrids around the show, I look at them in detail and I ask a lot of questions about how they’ll perform in cold weather, and I ask about the overall efficiency in the drive train because you can make something electric. But, if you don’t make the drive train efficient you’re really not creating the best machine that you could. So, our engineers have put a lot of time and effort into making sure that we’re putting the right level of technology in and not losing any performance to get the features that the customers want.

Are rental companies asking for hybrid technology?

Yes, they are! It used to be that Europe was the early adopters of hybrids, but that’s definitely expanding. If you look at our Z60 FE boom that we came out with three years ago, about half of our volume in that category is now going FE versus diesel — and, that’s true in North America. I think it’s phenomenal because there’s no downside. Genie FE technology performs as good, or better than, a traditional diesel machine. It runs quiet, it can run with the engine on, it has the 24-horsepower engine which can accept any fuel so when our customers need to dispose of the machine, if they want to dispose of it offshore, there’s few limitations. If they have a Tier 4 Final engine, the fuels don’t work everywhere in the world, so I think it’s the full package, and customers are connecting the dots and saying “yeah.”

You have had telematics for a while. This system seems more user-friendly.

Yeah, we had what we had what we call telematics-ready equipment for several years. Basically, it is a club, and customers could put whatever telematics device they wanted on it. As we were developing our new Lift Connect solution, we knew it had to be flexible because every customer was doing something a little bit different with telematics. We didn’t want to come out with a system and say, “This is our telematics solution, take it or leave it.” We didn’t want to do that. And so while we were learning about telematics and seeing what they were using, we looked at what partners were out there and what type of capabilities they had and at the same time we were looking at the control systems that we have in our machines. That is why our new Lift Connect solution is much different from what we offered in the past.

Today, Lift Connect hardware comes in the base machine price, as well as a three-year subscription. So we’ve gone all in and said, “We’re going to provide this to you, and the data and here’s a portal where you can go in and get basically everything that you need.” And what’s cool about it is that everything that’s in that system came from talking to customers and working with our service teams on what do they need. It’s very practical. Actionable information is what we wanted, and that’s what Lift Connect delivers.

Some people aren’t quite sure what’s most important about telematics and feel a bit overwhelmed by all the data when they’re first getting into it.

My advice to anybody that’s wrestling with it is to start simple. Just know where the machine is, know a couple of things and expand from there and that’s kind of the way that we developed it.

So it is factory installed with all units and it’s up to the customer to figure out what to apply?

Yes, and the amount of information varies by machine type, the control system. In general, with the simpler machines, you get a smaller amount of data pieces. With the mid-sized units, it’s more data points, and the big electronically controlled machines you can get full CANbus software so it’s quite powerful.

Generally speaking what is your assessment of rental demand right now going forward?

In 2017 and 2018, the growth was more than we expected, and we’re expecting that it’s going to slow down a little but continue to grow. If you look at where the industry is at, it’s in a really good place. We think it may slow down a little bit, but that doesn’t mean that it’s shrinking. And then behind these next few years, it is more replacement.

How is the market in China?

China is growing faster than anywhere in the world. Even though their GDP slowed down a little bit, and you read about it a lot, but if you look at the aerial industry, the adoption of aerials, scissors in particular, the last 18 months has been phenomenal. And, that growth is moving from smaller aerials into booms. There are more players involved, but that’s a good healthy sign for the industry because it means the adoption is going to continue. They see the productivity, they see the safety gains and it’s starting to stick. So for the longevity of this industry, I think it’s a real good sign.

Looking around the world are you seeing more adoption of mobile elevating work platforms?

I think the next one to keep your eye on is going to be India. In India, we’re starting to see more acceptance of machines, more awareness, and it’s starting to transition from what was known as a used equipment market to more new equipment purchases which is really encouraging. Africa is the other piece that still has a lot of potential to grow in the coming years.

Any thoughts to sum up?

I think we’re in good times, these are good times around Genie, I’m excited about it, and I’m proud of what the team has put together. I think if people look closely at what we’re offering out there, they can see that we’re leading the industry with innovations that create value and drive our customers’ growth.

 

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