“If you have a thousand regulations, you lose all respect for the law”—Winston Churchill
I read a story that in 2015 the federal government employed over 277,000 regulators! This didn’t include anyone from the IRS, Social Security, Defense Department or Centers for Medicare or Medicaid. I found no such information for California, but it feels like we have as many or more, with no relief in sight.
Both Schwing America and Putzmeister America have recently announced openings for their top position. As of now no names have been announced to fill these positions. As we all know both companies are now under Chinese ownership. That means with little except all truck mounted boom concrete pumps sold in North America are offered by Asian suppliers. There are at least a dozen different brands being offered on any number of different truck chassis.
In today’s world most brands use the same hydraulic pumps, hydraulic valves, transfer case and assorted bits and pieces throughout the entire pump and boom. What may be proprietary is boom design and outrigger system. What may be different is quality of materials or fabrication and longevity of the overall pump.
Asian Regulatory Freedom Stops at Our Coast
All of us have read for years of the “Asian Tiger,” used to describe the rapidly growing economies of Asia. Much of this growth comes about as a result of little or no regulation in all fields, economic and banking, environmental as well as worker safety and manufacturing. They are very competitive in pursuing business and sales. Currently those markets are far less attractive than North America—USA, Mexico and Canada. China’s breathtaking growth gave great monetary strength to Chinese firms, which they used for acquisitions, some in Europe.
My thinking is that the new top management positions for pump makers doing business in North America are going to feel increasing pressure from their offshore owners. Where will they find such talents and at the same time people with the experience of the regulatory world of North America?
It’s “Let’s Make A Deal” Time
The pressure to sell products in order to keep factories operating and home economies moving forward will drive decisions on sales prices. When margins are subject to great pressure, methods and costs of sales change. Sales to end-users are paramount and long-term consequences are suspended or ignored. That which was once “understood” no longer applies, unless settled at the time of sale.
A second and equally important talent for managers is dealing with the regulations and regulators. As we all have experienced there is no shortage of both and as a company in North America where there are volumes of rules to be complied with; the top person is the bearer of this burden. It needs to be pointed out there are a rumored 50 States, territories, districts and special zones in the USA. Canada has provinces, territories and lands. Ditto Mexico. More rules, regulations and regulatators.
You can expect very aggressive pricing for pumps: good for the buyer but not so good for the competition. Pricing pressure for services, and a reduction in fleet value. Some customers will no doubt become pump owners. You and other folks will have a wide variety of machines to choose from, with price being one of the incentives. Look a little further.
Do you believe the market for boom pumps in North America is large enough to support a dozen or so brands? Somewhere down the road there will be a downward adjustment of brands. Are yours winners or losers?