21.11.2003

Haulotte on the spot (full interview)

In an exclusive interview with Vertikal.net, Pierre Saubot, president of Pinguely-Haulotte, expresses his concerns on the access industry’s approach towards the EN280 standard and CE certification, and talks about the company's latest moves.

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Haulotte president Pierre Saubot.

C&A: You expressed some concern to C&A over the current confusion concerning the implementation of EN280, can you explain those concerns?

PS: Yes, I believe that the industry as a whole has an opportunity with the publication of EN280 to break out of the current negative position where rental rates across large parts of Europe are un-commercial. As an industry, we should be very clear on promoting safety and the fastest possible adoption of EN280.

C&A: The main issue you have raised is the fact that machines that were CE approved prior to June 2002, are still able to be sold without being updated to include the final amendments to EN280, and this principally concerns overload devices?

PS: Yes, EN280 was worked on by many experts for years and years, and while it may not be perfect, it is the closest we have to perfect as a standard for safety. The industry as a whole should now be very clear and promote its fast adoption rather than being involved with any discussion on maintaining older approvals.

C&A: The main point here though is the full envelope overload device requirement that was a late, politically motivated addition rather than a safety recommendation from the drafting committee. And even when the requirement was added, most of those involved thought that it would only apply to boom lifts. Many experts argue that these devices are not state-of-the-art, and will increase the cost, particularly of smaller machines, possibly slowing the uptake of powered platforms.

PS: I believe that anything we can do to improve safety should be done. I recall the crane industry 30 years ago when overload devices were not required. Many people argued against the requirement to fit them, but the reduction in accidents afterwards was very significant and the arguments against the requirement disappeared very quickly.

As to the cost, most units are rented. Adding a few hundred euros to the price of a machine translates into a very small amount on each week’s rental. If rental companies knew they had to upgrade their fleets in the next few years to fully meet EN280, they would be forced to charge commercially viable rental rates and this would be good for the industry as a whole.

Non-profitable rental rates are bad for the industry and bad for safety, not only from a point of view that maintenance might suffer and machines might not be replaced as often, but also in terms of spreading the use of aerial work platforms. I recall ten years ago when we had a small rental company in Paris. The market went through a bad period like the present day, so we hired two young inexperienced salesmen, gave them a few weeks of product training, told them that their basic pay would be almost nothing, but paid them a percentage of the business they brought in. They were told that they were not allowed to go anywhere where they saw platforms working. They were only allowed to go to places that did not use platforms. It took a while, but within three months or so we had a new customer base and everything was rented out at good prices. And just as important was that these were new users. We had spread the word.

With today’s rental rates, companies cannot afford to pay good salesmen, so we are not finding new applications and promoting safety as fast as we should be.

C&A: Your reference to cranes is a good point, but crane operators were frequently lifting loads that they could only guess the weight of, and only had a vague notion of the boom length and working radius for machines that have 20, 30 or 40 different lifting capacities. A work platform usually has one single unrestricted lift capacity, the operator lifts any load into the platform and, unlike the crane driver, he becomes part of the load, thus more sensitive to the machines stability.

PS: Yes, but people still overload work platforms and the problem will be that when they get used to using a machine with an overload device, and then the next unit they rent does not have one, they could be at risk. It’s not only the overload that I am referring to, it’s all of the points in EN280.

If EN280 was mandatory on all new machines, in five years or so, almost all machines would fully comply, compared to maybe 20 per cent at present.

C&A: Is it not true that most manufacturers have incorporated most, if not all, of the EN280 requirements into their products as notified bodies have referenced the draft standard for many years? It is largely the last minute inclusion of the overload devices that are not included, and many of those manufacturers argue that such devices would have minimal to no effect on platform safety.

PS: I am not sure about this, we know of smaller producers who have sold machines that are marginal, or are rated for impractical conditions. I think that we should be very clear on the message we send. Others also have a role to play, such as insurance companies. They should charge lower rates for full EN280 machines in a fleet, or charge a higher price for older units on the basis that they are less safe.

C&A: Do you not think that we should all be promoting the adoption of items or practices that significantly improve safety, such as training and safety belts for booms?

PS: On safety belts I am not sure, in some incidents a safety belt can cause more harm than not having one, but this is something for the rental company and the user to consider. I notice that even some experts do not wear safety harnesses and people disagree. Training is important, but even highly trained people still have accidents. Look at aircraft and driving accidents. Training helps but it is not the total solution to reducing accidents.




The White Island

C&A: Most of our readers are located in the UK and Ireland. Could we talk about Haulotte’s policies in those markets.

PS: In the UK we will very soon be moving to new premises, as the current locations are very basic to say the least. This comes partly from our philosophy;
1. Make turnover
2. Make profit
3. Invest profit.

We do not go into expensive premises when we start in a country. In the UK we now have good turnover and we are making a profit, so it is time to move to more suitable premises. This will happen be very soon, before the end of the first quarter for sure.

C&A: In the UK and Ireland you have been criticised for supporting or funding UK Platforms who started from scratch, and have been accused of using your support to cut rental rates to unprofitable levels. Why did you follow this strategy and do you now think it was a mistake?.

PS: We did not enter the UK market with this in mind. When we started in the UK we visited all of the rental companies trying to sell our products. The market was US-orientated and we were offering a European work platform with good performance at a slightly lower price, but the answer was always “no thank you, sell them to someone else then come back to us in a year or two”. We got this response from everyone. In the first few years we sold nothing. We then met the guys who wanted to set up a new rental company, UK Platforms/Ireland Access. We saw an opportunity to get started and increase our market share so we said: “OK”, this way we get our products onto the market and once people try them, they will ask other rental companies for them.

Sadly it is true that they cut the rates to unprofitable levels, but they are a private company and we had no control over them while they paid us. It is not what it should have been for sure.

C&A: Are you literally re-launching Haulotte in the UK?

PS: In a way, yes we are, we are better known now, our image is good and improving, we have no fixed ideas, but we will develop. Our products are becoming known and our market share in the UK is growing and is spread over more customers. End customers are asking for our platforms, and rental companies like Panther are buying them on specification. We will be introducing changes before the end of the first quarter, including the move.

C&A: So what sort of things will we see in the UK?

PS: Lets just say you will notice!

C&A: Most of your competitors are US-based. Haulotte still produces everything within the euro zone. How do you see the recent fall of the dollar and the rise of the euro affecting your strategies?

PS: I see that US companies pay significantly more for their steel than the rest of the world. Also, most US producers import components from Europe, which are more expensive. On the other hand, we buy US components, which are now costing less, so the actual impact overall is not as great as it might seem. US manufacturers have experienced far bigger drops in volume than us. We have gone from 12,000 units to 10,000 [during the 2002/2003 period].

We are continually reducing our costs as we find better ways to organize our production. You will notice that every year our cost of production is lower.
But we will certainly make adjustments to our plan to take the currency shift into consideration.

As to the US market, we are in the US and we are happy to be there. We will stay in the US. You must also remember that the euro today is only now at the same level as it was in 1999. When we first started in Australia, potential customers said that they were worried that we would abandon them if it got difficult, I told them that we are here! We shall stay! We are now number one in Australia. This is our policy. We are not in a hurry. We think long term!.

I do not expect that we will be market leader in the US for obvious reasons but we will win a share of the market. It might take us five years, it might take us ten years? As I said before, we are not in a hurry!

I would have preferred that some things would not have happened over the past five years. The value of my company today is not what it was in 2001, but I am not selling my shares, so what does it matter? It makes little difference, I am still paid the same as I was three years ago Most people here do the same job as they did three years ago. I still live the same way as I did three years ago, I can only eat three meals a day!

Rental Attack

C&A: You recently surprised the aerial lift market by buying the rental company LEV. A few weeks on, how do you see this move?

PS: Even though we knew LEV, it has surprised us with the quality of its business. Each day since we have owned it, we are more convinced that it was the right time. It is already really bringing value to the group.

C&A: LEV has a large truck mounted platform fleet, does this mean that Haulotte will become a truck mounted platform manufacturer?

PS: We will be in the truck mounted market. We will use LEV to help us enter this market, but only for the higher volume models. We will not be a full-line truck mounted producer.

C&A: What about the claims that you bought LEV in order to have a place where you could put the hundreds of used machines that you are having to take back from bad finance deals?

PS: When I hear these rumours I want to laugh. We have not made such silly agreements and we have no machines like that. We have been prudent and cautious and have only taken back a few machines. It is simply not true. We have many requests from people who think we have hundreds of such machines, but we do not and we cannot meet that demand.

I have also heard the rumour that we bought LEV because we did not know what to do with all the new machines we are building. Again, not true. We have a three month delivery period on most machines at the moment. I started in 1966 and I am not far from retirement, why should I start doing things contrary to 37 years of business practice? It is too late for me to change.

C&A: Do you have plans to make further acquisitions in the rental field?

PS: If we have some good opportunities like LEV in terms of profit, not market share, then yes we will look at it. Since we bought LEV we have had a number of calls from people asking if we are interested in buying other rental businesses. If it helps increase market share and profitability, and fits with our strategies, then yes.

We have increased our market share every single year for the last 15 years and we have also been profitable during those15 years, even with the worldwide market down 55 per cent, and the French market down 50% per cent, after a 50 per cent fall last year. We are still making a profit. We want to develop a real partnership with the rental industry. We might increase our spread with a franchise system like McDonalds. Once again, we are not in a hurry. We are constantly looking in every direction for opportunities. We do not wear blinkers.

C&A: You have expressed the aim to earn 50 per cent of your revenue from non-access products. Assuming you count LEV as “access”, have you not just made that plan more difficult? What are you doing to progress this aim?

PS: Growing the Haulotte Faresin line and expanding it into a full line range is clearly one area, but we will also be looking at other products.

C&A: You introduced the Easy Crane which is a very different product to anything on the market. How is that going?

PS: We sold the first units quickly because they fitted an existing need perfectly, but it is a new concept and it will not take off overnight. We started the platform business in 1985 and it took us seven years to get the concept established and we still have a way to go. So it will take time.

C&A Finally to wrap up this interview I would like to ask a few personal questions for a section we are adding to our future major interviews.

What is your favourite book?

PS: Cyrano de Bergerac by Edmund Rostang.

C&A: What is your favourite Film

PS: Cassablanca

C&A: What music do you listen to?

PS: Sonate a kreutzer (in French) by Van Beethoven

C&A: What is your favourite gadget?

PS: My Slide Rule for calculations and my Plam pilot for appointments

C&A: What is your favourite non work pastime/hobby?

PS: To produce a good Jurancon Wine and I manage an association involved in school training for youngsters who are not able to follow normal schools.

C&A: Thank you Pierre.