JLG is celebrating its 50th anniversary this year and as part of that, is recommitting itself to the core values the company was built upon in 1969. We sat down with Frank Nerenhausen, president of JLG Industries, at The ARA Show in Anaheim, CA to find out what's coming next for the aerial industry and JLG itself.
Rental: What is your outlook for the aerial industry in 2019?
Frank Nerenhausen, president of JLG Industries: It definitely started off strong. I think we’ve got good solid core fundamentals in the market. We’re seeing future growth in nonresidential construction and we’ve seen [oil] rig count improve. Our performance as a company has been good in the first quarter, giving us an optimistic outlook for the year, and our customers feel largely the same way. There are always things that can derail us, but we’re cautiously optimistic and the fundamentals seem really strong.
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Rental: How is the replacement cycle factoring into the current strength of the market?
Nerenhausen: We think we’ll see a tail wind from the replacement cycle over the next several years. We can’t pin point it exactly, but we see those stronger years coming out of the Great Recession coming into replacement turning into a tail wind in the post-2020 time frame.
Rental: From a global perspective, which markets are strongest, which are most stressed?
Nerenhausen: North America and Europe are mature markets, but the fastest-growing market is the APAC (Asia Pacific) region. There we see a combination of a strong adoption curve as well as a maturing rental market. We’re excited about the opportunities there but are still very focused on mature markets such as North America, Europe and Australia. Latin America continues to recover, though we’re seeing a turnaround with the new political climate in Brazil - a positive in an otherwise challenged market.
Rental: How much do you think the current political climate in the US is affecting the economy and the construction market?
Nerenhausen: Some policy changes created uncertainty early on for construction and rental, but the strength of those markets appears to be absorbing the challenges created by things like steel tariffs, etc. We just have to wait and see how that plays out post 2019.
On the other hand, we can’t deny that changes in the tax structure contributed to an increase in spending, and there’s a general confidence in business as a whole right now. The tariffs are contrary to that – I think all business people would prefer a free market – but the strength of the market has largely absorbed the challenges associated with the tariff structure. As a whole, the political climate has been a positive.
Rental: What are some of the primary technological trends with aerial equipment?
Nerenhausen: We’re seeing a lot with telematics, connected machines, mobile control… there’s a lot of new technology coming into the marketplace.
Rental: How do you see customers responding?
Nerenhausen: Some things are changing, somethings are staying very much the same. Customers still want strong customer support and machines that are reliable. Their drive is the same as ours; they don’t want technology just for the sake of technology. It needs to provide a service that’s valuable.
Rental: JLG is celebrating its 50th anniversary this year. How will the core values the company was built on evolve in the next era?
Nerenhausen: Fifty years ago, our founder, John L. Grove was on vacation when he witnessed a fatality involving some work being done at height. At that moment, he had the choice of continuing on his vacation or doing something about it. He chose the hard path and did something about it, inventing the world’s first boom lift, JLG 1. To this day, every one of our machines goes out with his initials on them. The core values of the company, such as listening to customers and passion about the team and the business, are what our founder was about, but those elements can be lost in a large company, so we’re working very hard to double down on them. Once you lose those core values, you lose your sense of purpose, and ultimately, your value in the market place. Our culture is genuinely focused on our passion for innovation, which comes from listening to our customers, while maintaining Grove’s mentality. We want to leverage size and scale but behave like we’re a small company.
Rental: What does the future look like?
Nerenhausen: There are lots of variables that could derail long-term growth, but the positives are that there continues to be new uses for the machines we manufacture, so we continue to build out our core product lines. From the macro-economic standpoint, we can’t predict the future, but given the volume of technological change and the capacity to further improve the productivity and safety of our machines, the future looks bright for access.
