INTERVIEW: Tadano CEO talks cranes, supply chains and decarbonisation

In post as Tadano president and CEO since April 2021, ICST caught up with Toshiaki Ujiie at the company’s factory in Zweibrücken, Germany. He now has almost a year under his belt as president and CEO, taking over from Koichi Tadano, now chairman at the Japan-headquartered global crane manufacturer.

Toshiaki Ujiie, Tadano president and CEO

Ujiie is not new to the company, having already been there two years before taking the CEO job. Now he is in charge of the company’s efforts to increase its standing again as one of the world’s largest crane makers, the top position it held just a couple of decades ago. Ujiie has a long career history working in the construction industry, including at the beginning, in the 1980s, with a stint in the United Kingdom at Marubeni, which was also a Tadano crane distributor.

Marubeni also owned Hitachi in Australia, another Tadano distributor.

“My first assignment abroad was with Marubeni in 1987 in the Netherlands where we rented space on the second floor of the building of Tadano International Europe. Marubeni assisted with appointing distributors in Spain, Portugal and Belgium, this last one by me.”

From 1987 to 1992 he was in Europe, then later in the USA, for five years, from 1997 to 2002. His experience there included distributing Hitachi excavators and Volvo loaders, in Georgia, Alabama and Florida.

“Spending a few years in different places was a good learning experience.”

Then coming right up to a couple of years ago his career in a way came full circle, back working with Tadano, before taking over as president and CEO on 1 April 2021.

How has your first year been as Tadano president and CEO?

For the first three months I was busy preparing for the company’s annual general meeting, held in June. From April to June there were many things I had to do, showing up at the stock exchange in Tokyo, explaining the financial results for the year ending in March. As soon as I became CEO, I had to go out to the public and I had to explain one of the toughest year’s results.

What are you doing now and what is next?

One thing I need to do is complete the One Tadano strategy. We have development and production bases in Japan, Germany (three factories) and also one factory in the USA, so we need to form a real global alliance of those three zones.

In Japan we mainly produce rough terrain cranes, in Germany it is all terrain and crawler cranes. In the USA it is telescopic crawler cranes. Each factory has got its concentrated area but, for example, in Japan we also produce all terrain cranes that fit the Japanese market. We import the Faun carrier from Germany and fit it on the superstructure in Japan where we also sell complete imported cranes.

How is the new crane delivery time affected by the pandemic?

We see the markets coming back, which is really positive for us, and we have an order intake which is comparably good. But then the supply chain is letting us down to a certain extent so we have to push out deliveries, which you normally don’t want to do if you have a good order situation.

Tadano president and CEO Toshiaki Ujiie, right, and Jens Ennen, president and CEO at Tadano Demag and Tadano Faun in Germany

Our customers understand because for every other OEM, for excavators, wheel loaders, cranes, whatever, it is exactly the same situation. Delays are everywhere and lead times are going up. Depending on the size of the equipment, the larger the longer, in simple terms.

It is also difficult because the predictability of the supply chain is really poor. We are standing with tools in our hands and the part doesn’t come and you need to do something, in terms of the way we can react to those uncertainties.

Will supply chain issues get worse before they get better?

I think they’ve been at the same level for a few months now and soon we’ll see slow progress but we don’t expect an end to it before the third quarter, especially with microchips and similar which will probably last the whole of 2022.

With the component shortages and parts delivery issues will you outsource less and start bringing more component production back in-house?

The volatility of the supply chain means we have to bring some components back. We are increasing our efforts when it comes to welding, because we figured out that we need some safety or security on our side there. So that is something we are pursuing but we will not go into very specialized things, like building our own hydraulic pumps. That is not a goal for Tadano. It is not the right time to start production of diesel engines now.

Talking of diesel engines, how does Tadano see the future in terms of decarbonisation and powering cranes – is, for example, hydrogen, really the next big thing?

If manufacturers come up with a very good hydrogen engine we would jump on that but the infrastructure is not there. We are looking for new solutions and of course we are starting to learn by ourselves too.

We will soon introduce a decarbonised machine. I can say we are working on that. Our engineers are working to complete the timeline. It is a headache for our customers. They need to own and use our equipment for the coming 25 years. During that time if they need to stop using it because of the engine then we need to solve that problem.

We all know there are government targets around the world to reduce the carbon footprint. We cannot develop our own fuel cell or our own hydrogen engine or whatever so we look to the engine manufacturers. If you listen to the large players like Volvo or Mercedes they all are following various strategies right now because it seems no one really knows the end game.

We are talking to various engine manufacturers to get the right solution. I think it’s hybrid, it is battery, it is fuel cells, it is hydrogen combustion – those four things are out there. We just have to find out which solution for which crane, because an AC 3.045 City is not the same as a CC 88.1600. What we do is listen to as many partners as possible, to what kind of views they have, and we should be very open to those.

On the acquisition of Demag is there more to achieve in terms of further synergies?

Theoretically, synergies should always be there although they are not easy to obtain, especially in our case. Faun and Demag used to be competitors and normally one plus one doesn’t become two. We have faced a similar situation but, as we already announced in public, TFG [Tadano Faun GmbH and TDG [Tadano Demag GmbH] are being vertically integrated.

The Tadano fleet (Photo: Tadano)

We have cut the crane in the middle, so to say, in that everything above the slew bearing is built in Zweibrücken or Wallerscheid and everything below the slew bearing is built in Lauf. It goes back to when Lauf was the Faun heavy duty truck carrier factory. even before Tadano started building cranes there. The production facilities there are optimised for this.

Once our ERP systems are harmonised, on July 1st, we will start. We will relocate production of one carrier to Lauf and one superstructure to Zweibrücken or Wallerscheid at the same time. At the same time we have slimmed down our product line to remove duplication. It will take us 18 months because we cannot simply transfer everything all in one shot. By the end of 2023 we will have it that carriers all come from Lauf, driven by road. On the way they will get an extensive test drive which should help confine teething troubles like bad connections, leaking hoses and so on to history.

Dividing the production in this way with less scope but a higher volume of fewer different components at each plant should mean higher quality. Also, less investment in manufacturing technologies because we only invest in carrier manufacturing in one place, unlike today. We build carriers in Zweibrücken, Wallerscheid and in Lauf so for anything we want to improve on carrier production we have to do it three times. That will be history. Once we’re done, in two years, we will have three optimised factories with a very nice production flow.

Why are you dropping the Demag brand name AND will it be brought back again like it was when it was under Terex ownership?

First of all, we are not Terex. We are a crane company. The best news for this [Demag] factory in Zweibrücken was that Tadano, the crane manufacturer, became a shareholder in the company. We have continuously stayed strong, by making cranes. That is why I believe that to carry on or to not carry on, with the name of Demag, does not affect us very much. Some people may hold a different opinion but we have decided it to be that way.

We had long discussions before making the decision. The longer you think about this and the more you look at it, you can also change your mind. Now the majority of customer feedback we’ve had says, ‘I understand this, it is logical and it makes sense.’ Of course there will always be Demag enthusiasts who will tell you this name cannot go away. I won’t say they are wrong but I believe we have made the right decision. It will take a while, also for me and for everybody else here, to not talk about a Demag AC 45 but a Tadano 3-45 but we will get there.

Tadano’s brand name in the rest of the world is very strong. In core Europe, okay, we don’t have the rough terrain so everybody is much more familiar with Demag but in the rest of the world, because of the reputation of the rough terrains, this move is quite good. The Mantis brand will also be Tadano. We will have everything in blue and white and all under one roof. If we want to be One Tadano we cannot at the same time sell as Demag or Faun or Mantis. If we want to be one company, then we also want one brand name. It will take a while. I’m quite sure people here will speak in 50 years about the Demag factory, that will not go away. But with the product itself, I think that will not last too long, then people will get used to it.

When customers buy new cranes from us we are getting more requests for them to be branded Tadano painted blue and white than blue and yellow [Demag colours].

Will all new Tadano cranes be global market models?

All terrain cranes yes. For rough terrain cranes sometimes it is different. In Japan it is a totally different animal. It’s almost something in Europe we would call a truck crane, some with several axles. But outside Japan I would say the models are somewhat global, yes.

The all terrain cranes built in Japan are likely to stay within Asia and not go to Europe because of the totally different road regulations. They have a quick connection where you take the superstructure off, deliver the crane to site and then there is a lifting device developed by Tadano that puts the superstructure on the carrier.

In Japan it is usual to transport them in two pieces plus the counterweight. In Europe I think this would be hard to accept. The cranes are very compact in Japan and very heavy. Even the carrier alone might still be too heavy for European road regulations. As with the rough terrains, it is totally different market requirements outside Asian countries.

After you’ve completed the integration what will be next, what is also on the Tadano shopping list?

For now, we are integrating two former competitors that have been out there competing for 50 years or so. Doing that and then product development, plus decarbonisation, resource optimisation, production relocation, supply chain issues, etc – we have enough things on the ‘shopping list’ for now. Going forward, never say never but we will see.

We have a lot of things to do. Decarbonisation is a big issue and there are things like autonomous driving we could look at. I don’t say we can have a driverless crane on the road tomorrow but current technology, of AI or IoT, those things will help us a lot more than today. We are starting to investigate them and we are very happy to show something at the next Bauma [construction equipment exhibition in October 2022]. It is not only for our product range but also to show ideas for what kind of future we are seeing. We are digging our own path and going further.

We still have some time to finalise our integration before we go to the next steps. There may be other lifting solutions out there that would fit the Tadano portfolio but for now we have other priorities.

You’ll see we have a new slogan, “Your passion. Our DNA”. What we figured out is that we share the same passion with our customers and we share it so much that it is in our blood. So that’s why we say it is in our DNA. That is true for many people here. We are in the crane business forever and we’re solely a crane producer.