Interview: Manitowoc forges a new path
By D.Ann Shiffler22 October 2020
Aaron Ravenscroft’s relationship with Manitowoc is serendipitous. Early in his career he was a sell side stock analyst and Manitowoc and Terex were among the companies he followed. During that time, he toured the Manitowoc facility and ended up with a Potain tower crane model. Who knew some 20 years later he would be appointed to the company’s highest post?
However, Ravenscroft did not end up as president and CEO of Manitowoc Cranes by chance. Considered to be smart, ambitious and amicable, he was said to be part of a planned succession to former president and CEO Barry Pennypacker.
Ravenscroft’s past jobs include regional managing director of Weir Minerals at The Weir Group, vice president of the Industrial Products Group at Gardner Denver, vice president and president of Process & Flow Control Group at Robbins & Myers and an analyst at Janney Montgomery Scott. He earned his undergraduate degree from Bucknell University and an MBA from Carnegie Mellon University in the US.
Shortly after Pennypacker took the job at Manitowoc in late December 2015, he recruited Ravenscroft to join his management team back in March 2016.
Ravenscroft’s first assignment was running the mobile crane division. Shortly thereafter he was asked to lead the tower crane division and moved to France. He was then promoted to vice president of cranes, and sometime thereafter the succession plan began.
What is your focus for Manitowoc through the end of 2020?
Ravenscroft: There are some complications to deal with right now and through the end of the year. One is the Covid-19 situation. We continue to manage this very closely relative to the safety of our employees around the world. We are managing our balance sheet and we have good liquidity. We have in excess of US$300 million to help us maintain through the hard times we may be facing through the Covid crisis.
What is Manitowoc’s ideal end game regarding the US Department of Commerce Article 232 investigation?
I would say there are two elements [to this]. One thing I think is important is that our message has not gotten out. You have to look at the cold, hard facts. We don’t believe the current trade environment favours domestic manufacturing.
In the last ten years, the cost of a 300-ton crawler has gone down 20%. Driven by foreign exchange rates and other factors, the industry has seen a significant increase in imports over the last decade while our export of cranes from the US has declined 80%. We do not believe that the US trade situation is fair, and as a result our domestic workforce has been reduced over 40%. I do not think this is just Manitowoc, but for all US manufacturers.
At the same time, it is really important to put ourselves in the place of the American workers. For instance, our welders in Shady Grove. When you spend 40 hours a week welding in August and then you see your tax dollars being spent on products being built outside of the US, that is difficult.
From our point of view, the current environment does not favour the local producer, the local product. I think we can do better in our trade environment. With respect to the Article 232 investigation, it is pretty complicated and unique. It has only been used under the Trump Administration and it is pretty much driven by the President at the end of the day. There is not much precedence for it.
I want your readers to know, the industry to know, the headwinds we have faced. We are not in favour of tariffs, but we are in favour of levelling the playing field. We do not want to inhibit the market. We want to stimulate demand. This will mean more infrastructure spending. This may mean more American-made provisions.
We believe the most effective remedy would be for the President to take concrete steps to stimulate demand, particularly for US-produced mobile cranes by enhancing Buy America/Hire America provisions for federally funded construction projects. These projects are funded by American taxpayers and should benefit the hard-working factory workers who pay those taxes.
We need to see increased infrastructure spending. It has been more than a decade since the US funded a major overhaul of our existing infrastructure. This would boost demand across our entire industry, and infrastructure spending is one of the few issues on which both major political parties agree.
And lastly, provide grants for local research and development in the crane industry. We believe that these remedies would help stimulate demand in the crane industry as well as advance the industry with new technology that is developed in the United States.
What do you see as the ideal Covid-19 recovery path for Manitowoc?
As great as it would be to have a V-shaped recovery, that may not necessarily be the best path. Think back to 2016, when the market was down and then back up overnight. This hurt the ability to deliver product.
In the long run, I think we need to ease back into this and get the supply chain back up. We need to be able to manage ourselves [through an upturn]. If you are down 30%, you do not add 30% of production overnight. As much as we are super excited to see orders, I think it would be better to see a gradual return of the market.
During your tenure with Manitowoc, you’ve been sales oriented and customer facing. How do you envision interaction with Manitowoc dealers and customers, particularly under the currently challenging circumstances?
This is a personal relationship business. I have regular interaction with all the major players. We stay in touch. We talk, we email. It is a business that is all about confidence, and I will be working with our customers to improve our relationships and help them improve their businesses.
It is lots more fun and meaningful to be face to face, but for the time being it is Teams and Zoom calls and phone calls. There are so many ways to communicate.
How is Manitowoc approaching new product development?
For us, nothing has changed. We have continued to invest in product development in the same way we participated before the Covid-19 crisis. We are doing a lot more things virtually, but we are still doing all the things we did before. Typically, we will fly the entire product development team into Shady Grove to meet. We have found ways to do all the things we used to do to assure our new products are what our customers need. The Voice of the Customer is still very important to us. All our plans remain on track, and we are eager to get out of this and add more resources to our product development strategy.
What do you see for the Manitowoc crawler crane line?
We recently launched the 100-ton and 150-ton crawlers, and we are looking at launching another model next year. When I look at the overall line up, I would like to spend more resources on the all-terrain crane market. We are eager to develop new ATs. We have a couple more machines that are high priorities.
What are your thoughts about expanding Manitowoc’s reach through mergers or acquisitions?
This is something we have been working on, but we have not been able to get across the finish line. I think an acquisition is something we need to do. It would be a shot in the arm. There are some good acquisition opportunities in the crane business. We are excited to get back to normal business so we can do a deal.
We spent four years doing debt renegotiation. Now that that is done, it gives us a lot more flexibility. Prior to that, the covenants were so strict that we could not really entertain any acquisitions. We do have a dedicated thought process to acquisitions when the time is right.
This interview first appeared in the September issue of American Cranes and Transport magazine, a sister magazine of International Construction, and the number one magazine in its sector. It is used with thanks to them.