18.03.2016

Manitowoc Crane to restructure

Manitowoc Crane has announced that it will be making substantial changes to the business in order to match current demand levels, while looking to improve operating efficiencies.

The changes will include headcount reductions at the Grove plant in Shady Grove, Pennsylvania and at the Manitowoc plant and headquarters in Wisconsin. The company is also looking at further production plant rationalisations, and cost saving initiatives in addition to those announced towards the end of last year.

Chief executive Barry Pennypacker said: “As we have communicated, this cycle has proven to be different from any other in recent past. Since joining the company in late December, I have continued to outline a strategy that centres on customers, employees and shareholders. My goal is to create a culture that is driven by innovation and velocity at the core of every aspect of our business."

“Our business has great potential for growth and improved profitability. However, there are clear opportunities to improve near-term performance, while at the same time positioning the company to extend its industry leadership. The activities we are announcing today will further improve our margin profile, while ensuring agility in our response to customers’ needs. We will provide greater clarity on expected costs and savings as a result of these actions during our first quarter 2016 earnings call."

Vertikal Comment

It is always interesting to watch how a new chief executive coming in from outside the company acts during his first six months or so.

There are those who come in full of management-speak, bluster and a determination to change everything even before they start, or get a feel for the company, its customers or its people, or the market. Those types usually cause massive damage before their incompetence is identified and they are paid off to go on and mess up another company.

Then there are those managers who on the surface seem to take a more thoughtful and cautious approach, saying nothing much at all, as they claim to prefer to listen and learn for the first six months or so. But then two years or more on have done nothing at all, and are clearly not likely to, even though the company may desperately need it.

There are times and circumstances that suit both extreme stereotypes of character, such as when a company is in terminal decline, and only a swashbuckling action man can kick start and galvanise the swift action that is required. Alternatively there are times and companies where a quiet manager who just lets everyone get on with running the business they know well, keeping both them and the shareholders happy is ideal.

Most managers obviously fall somewhere between two extremes of course, as to which side Barry Pennypacker errs towards, it is not possible to say. He clearly does not appear to fit the do nothing and see how it turns out type, and seems keen to play an active role in transforming the business. Given the current market uncertainties, Manitowoc probably needs to be asking some questions, such as whether it needs to be manufacturing in so many locations, or if it could benefit from streamlining some office based functions.

Hopefully for Manitowoc he falls somewhere between the two extremes and will prove to be exactly what the company needs at this time.

Time will tell.