12.07.2008

Tanfield to cut workforce

Tanfield, the UK based aerial lift manufacturer has issued redundancy notices and opened a consultation process with the aim to cut around 100 jobs at its UK plant.

The cuts which are likely to come from both the lift and the electric vehicle business will represent a reduction in the region of 25 percent and follow staff reductions at most other large aerial lift/telehandler producers in the face of shrinking lead times and order books.

A Tanfield spokesman speaking to the local press said: "As part of the strategy realignment announced on July 1, Tanfield has initiated consultation periods with members of staff in two of its divisions and some ancillary field operations."

"These consultations are in order to ensure that the divisions have appropriate resources to meet the changes in market conditions and operations that have affected these divisions.”

Vertikal Comment

With so much negative coverage in the mass media, the principal buyers of aerial lifts - specialist and general rental companies - are feeling nervous about next year’s prospects. Even though business is general good, holding close to last year’s record levels.

At the same time lead times for aerial lifts have plummeted due to order cancellations and deferments – some due to the uncertainty, some (very little) due to credit issues and in Europe a good deal also due to a change of strategy by a couple of major ‘consolidators’ which have acquired large aerial lift companies.

They have switched the ‘young fleet’ policies of the acquired company’s which turned their fleet every three years or so, into a ‘run it for life’ strategy that will take the average age of the merged fleets up to six years or more.

This will inevitably reduce the number of new machines they purchase over the next two to three years as those fleets age. It will though also throw up opportunities for those companies that continue to operate a young fleet strategy, which all things being equal, customers prefer, however the current economic atmosphere does not exactly encourage heavy investment.

One must not forget that the underlying market for aerial lifts is still expanding and in Europe it has a long way to go before it reaches the levels of penetration seen in North America, and that market itself is still far from mature.

In Western Europe there are tens of thousands of potential users to convert from ladders, scaffolds and make do methods while the markets in Central and Eastern Europe are only just beginning.

Aerial lift manufacturers can take a lesson from the crane industry which was also hit by rental companies aging their fleets some years back. The market had slowed and the new products had changed little over the previous 10 to 15 years. A well maintained 10 year old crane was almost identical a brand new one. In the face of a slowing market there was no incentive at all to run a younger fleet, better to invest in tarting up the older units so they looked new.

When manufacturers started launching new models, with longer booms, more compact dimensions, better lift capacities and lower running costs the pressure to buy new returned. The last few years have seen very little significant product development from the major self propelled aerial lift manufacturers – a refurbished 10 year old boom is hard to distinguish from a new model.

As always the period we are entering will offer both challenges and opportunities, both for small or start up ventures as well as the larger long established companies. Those that grasp that fact and positively look for and seize on those opportunities are likely to be the new winners.