CNH Industrial CEO Richard Tobin also became Brand President of CNH Industrial Construction Equipment earlier this year. In an Interview Q&A with Aggregates Business, he outlines the priorities of his extended role and goals for the Case and New Holland brands in the quarrying and heavy construction equipment sectors.
AB: You took on the role of Brand President for CNH Industrial Construction Equipment in April 2014, what are/have been your immediate priorities?
Richard Tobin: My first priorities touched three main areas of the business:
Reposition the two construction equipment brands:
Completing the transition to a single global partnership from our previous dual source excavator strategy: We achieved this through the new agreement with
Business development in emerging markets: To this end we are reinforcing our product line-up in Latin America, expanding our offering in India, strengthening and developing our dealer network in APAC, and we are developing a low cost product range that we will export from our established manufacturing plant in India. All these actions will enable us to meet even better the specific product requirements of our customers in these countries and raise the level of the support we provide them.
AB: How do you see the current state of the heavy construction equipment sector and where are the growth areas?
Richard Tobin: We expect the construction equipment industry to increase in unit volume in the next five years overall. The growth will continue to be uneven as different geographical markets adapt to changes in market conditions and macro events so it is imperative that we retain our flexibility to meet the demands of our customers; at present North America and non-China Asia markets are demonstrating the highest growth rates. From a product perspective, we believe that the heavy and light equipment segments will maintain the same proportion of the total industry, with wheeled loaders having the highest growth rate in the heavy segment.
AB: How has CNH Industrial managed to maintain strong revenues and its growth strategy despite the difficult global financial climate?
Richard Tobin: First of all, our global dimension:
Efficient operations: Of course we have also taken actions to run the business as efficiently as possible and cut unnecessary costs, the ability for our construction business to access the resources of the CNH Industrial group in powertrain technologies and parts distribution infrastructure are two good examples.
Development of our distribution network: With the lasting economic recession, the size of some of our dealers’ business and their capacity to invest in the brands were not enough to offer the best support to our customers. In Europe we launched a Network Restructuring plan in order to select and develop the right partners to serve our customer base now and in the future.
Building on our strengths and leveraging on the advantages of being part of the powerhouse that is CNH Industrial to develop each of our two construction equipment brands, each of which addresses different customer needs.
A strong focus on product development has ensured that we have the best equipment and technologies to support our customers’ success. We invested heavily in best in class low emissions technologies for each brand and our development work on Tier 4 Final product launches for both Case and New Holland is largely completed.
AB: What heavy construction equipment-based services offered by CNH Industrial Construction Equipment are key to growing the company’s revenues and profits in the heavy lines market?
Richard Tobin: We launched a new all-in-one heavy machine support program, ProCare, that provides extended coverage, a planned maintenance programme and Advanced SiteWatch™ telematics. It takes the worry and uncertainty out of managing a fleet of heavy equipment. The comprehensive extended coverage and planned maintenance mean fixed maintenance costs and no surprises for the fleet manager. The Advanced SiteWatch™ telematics further helps keep the machine in top condition, sending reminders of scheduled service intervals and malfunction alerts to prevent damaging technical issues. As a result of the excellent care provided throughout the life of the machine, its resale value will be higher, providing an additional benefit to the business’ bottom line.
ProCare also helps fleet owners and managers with the business and operational aspects of running the fleet. The planned maintenance program helps them budget throughout the life of the machine, in addition to the advantages of lower ownership costs, technical support and maximum uptime. SiteWatch™ provides real-time performance metrics, idle-time analytics, machine tracking in customised reporting formats, making it easy to deploy the fleet most efficiently and ensure every unit is performing at its most productive and cost efficient.
AB: Can you tell us about CNH Industrial Construction Equipment’s latest R&D work on new solutions to meet heavy equipment customers’ future energy and emissions challenges?
Richard Tobin: While the treatment technologies to meet Tier 4 final standards are in the spotlight, we have developed additional innovative features that benefit equipment owners and operators in ways beyond just meeting emissions requirements. Many of these innovations derive from the electronic systems that help meet Tier 4 standards, which also achieve new levels of fuel efficiency, productivity and control. When we worked on our Tier 4 solutions, we set out to improve the overall profitability of our customers by considering how available technology solutions fit into each machine and its general application.
In addition we developed machine control solutions to help improve our customers’ productivity (faster cycle times), because the operator can dig with absolute confidence in mass excavation applications and know that they’re not over-digging. This can be particularly helpful in trenching applications by guiding the operator to the exact grade depth and without the need for a worker to be present in the trench to measure depth.
Our new strategic partnership between CASE Construction Equipment and
AB: Have you set any long-term performance targets for CNH Industrial Construction Equipment? If so, what are they?
Richard Tobin: We are focused on realigning our market position among the heavy line players, reinforcing our presence in the countries with the highest growth rates.
AB: Is CNH Industrial Construction Equipment planning to open any new manufacturing facilities for heavy line models/quarrying equipment in the next 12 months? If so, what will be manufactured at those sites?
Richard Tobin: We are constantly reviewing our manufacturing footprint to ensure it operates efficiently and remains the lean and flexible operation we need to deliver best-in-class response to our customers based on industry volumes and market demand as they evolve. We have recently released our five-year financial plan for the business which incorporates a variety of product and market initiatives, our largest project underway is the industrialisation of the crawler excavator line in cooperation with Sumitomo Construction Machinery.
AB: Are there acquisitions-joint ventures within the heavy construction sector you may be/are considering? Perhaps not names at this stage, but product sectors?
Richard Tobin: The industry is in constant evolution and we regularly review our situation, evaluating the opportunities and challenges that the market presents and how to best address them.
AB: What are the main challenges of your role?
Richard Tobin: I am both CEO of CNH Industrial and Brand President of the CE brands, which gives me a unique insight into our construction equipment business and is testament to how important the construction equipment business is for CNH Industrial.
