John Dutcher with DEUTZ Corporation

SUMMARY KEYWORDS

rental, company, engine, talk, machinery, market, years, industrial, business, industry, changing, machine, service, conversation, world, manufacturer, refurbishment, fuel, equipment, baggage cart

00:03

Welcome to the Industrial Talk Podcast with Scott MacKenzie. Scott is a passionate industry professional dedicated to transferring cutting edge Industry Focus innovations and trends while highlighting the men and women who keep the world moving. So put on your hard hat, grab your work boots, and let's get Hi there

00:21

and welcome to Industrial Talk. Thank you very much for joining Industrial Talk the number one industrial related podcast in the universe that celebrates industry professionals all around the world. You are bold. Yes. You are brave. Yes. You dare greatly. Absolutely. You're changing lives and therefore you're changing the world. That's why we celebrate you on this podcast. All right, we are broadcasting Yes, we are broadcasting from PowerGen. 24 here in New Orleans, Louisiana. And you're going to be listening to a guy that has his story is sad, because he's not going to be able to eat any food from New Orleans. It started the conversation in us. His name is John. Well, let's commiserate with John. All right, let's be cracking. Sorry. We're still dazzled by the fact that you're, you didn't eat anything. What do you eat for lunch? Alright, and I was just over here.

01:18

Nothing exciting.

01:21

He'll bring me down. Oh, well, we went over to Gordon Biersch and had a hamburger. It was decent. It was not bad. So it's really Hey, it's not not you know, New Orleans, like, you know, come to a guess you don't? Doesn't matter. You have a good conference.

01:39

Absolutely. Good day.

01:40

What is it? What's making a good?

01:42

It's a good part of the segment. Lots of new players here. And lots of old players here. People I know. Come across. Have you walked the floor? About three quarters done it early.

01:53

It's for me, it's I haven't been in salt mine. This is the salt mine. But I would love I geek out on this stuff, you know, and it's just to see what's out there, what's new and what's evolving? Who knows the innovation is just outside. All right, for the listeners out there, John, sort of give us a 411 on who you are.

02:14

So John Dutcher, who's he had been in this industry now for 32 years, mostly in the sales capacity, but came from service. I just love the heck out of it. It's a lot of fun. And we touch a lot of industries, mainly in rental equipment. We get it we get involved with that heavily. But it's deeper than that. We're changing. We've got innovative products coming we're changing the market demands that might soon be present with electric electrification. Yeah, battery electric, multiple fuel sources, etc. Yeah, there's lots going on.

02:48

Are you with the propane people or what? What is? What's the company?

02:54

So the company has its Corporation in America? Hola. Hola. Hola. Hola. There's

02:57

a guy named just like you. Is that you? But so Okay, so you're with them.

03:05

So we're an engine manufacturer,

03:07

you're an engine manufacturer,

03:09

I love your tagline. Because we share it we ensure the world keeps moving. Very

03:12

cool. Yes. See? See? Yeah. How can you? How can you not be upset about that? So from an engine manufacturing, take us through what that what that means.

03:26

engine manufacturing. So we have three large sized plants that we produce in the world. Most of our high technology engines are made in Germany. And we also produce in China, a lot of engines, most of those stay in China. So we're making mostly diesel engines, we do have a, an arsenal of multiple fuel engines, like propane, or natural gas are one of the first developers of hydrogen engines. For that next technology. No, we purchased some companies that get us into the battery electric space. And we're, we're beginning to develop customers that will use those systems from us.

04:05

I know we're gonna be chirping on the rental market. But I have to ask because you're they're very active out there. You are manufacturing these engines and you're seeing where the market is going. sort of explain to the listeners a little bit about where you think that that's happening. It's like these multi fuels. Anyway,

04:30

continue to go. And so I think the first the first thing we'll see any any large changes are is probably going to be in diesel, just how diesel is produced with the advent of a synthetic diesel, or an HBO a byproduct of natural production, or we can take the plants and make feels right, yeah, so that'll that'll happen pretty rapidly and that does produce a cleaner carbon result than a traditional petroleum diesel. You Small machinery will go battery fairly quickly. Really small machinery especially. So you're talking about equipments that power by less than 50 horsepower to talk in those terms are 35 kilowatts rough. Yeah, yeah, you'll see that happen. And they will see they have mostly in urban areas, obviously for the push on and get decarbonization from the urban areas. But we're gonna see diesel and propane, natural gas is around for a long, long time.

05:27

I don't see any other way. But I think what fascinates me about just the evolution of the market and the businesses is how it's, you have to be quite nimble, because the market is changing so drastically and so quickly, in a sense, and it's not a negative. It's just the realities, and how, how do companies like yours and others respond to those changes? And that's through innovative solutions you got? It changes so much, it does change. But it's a good thing. Change is

05:58

good, you know, this next year, we're in it now. 2024, some, quote unquote, election year, and they're always kind of goofy. You never know what to expect today. You

06:07

don't? Yeah, I agree with you. 100%. We've

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already seen a big change in quarter one. But there's good news out there that quarter, Tuesday looks pretty good for us. In some markets. Quarter one's fantastic, but it's Americans, it's not just that one of those goofy did way above my

06:21

paygrade. Just FYI. All right, for the conversation, and we want to chip on here is once again, rentals. Talk to us a little bit about that market.

06:32

So rental is a prime driver for the industries that that we certainly serve in including what this trade show is all about. So if you look at what's happening with equipment, sales and manufacturing, the two sides of it, the rental industry may claim ownership of maybe 80% of all machines produced no way. That's very high. That is high. Yep. You don't see that in automotive, this is the opposite. Remember, companies are large, the people who own automobiles? Well, the company has mainly sold through and managed by rental companies. And, of course, has driven over the years by tax incentives, and then the cost of ownership of the machinery got very expensive, if you're not going to use it every day, you're the one renting it. So it's a service at a service that market well, you need to do certain things. And it starts from where we manufacture an engine, we work with the equipment manufacturers, who then have their customers, which is mainly in rental, and then what we do on the backside, come back to rental and service them a certain way that makes it all seem that seems to be sensible.

07:35

Do you are you performing the maintenance on these assets,

07:39

that's a big part of it. So how we get our service parts the market is really important. So everything has to get serviced. And sometimes you have to use your own technicians for that at a certain level and certain things you let other customers handle on their on their own. There's not enough technicians or I was

07:57

just gonna say you have a you have a workforce challenge that I would imagine is significant. So because you're asking them to not be technically capable of being able to do what they need to do, effectively. But then you're also talking about them having to travel and do that too, as well.

08:16

Oh, sure. Those most things repaired are repaired in the field that isn't like you take your automobile to the car dealership repaired in the field. And we're set up for that we're different than a lot of our competition in that way Leave, leave sit, put systems in place that we can authorize and train up people enough to do a certain level of work. And that makes for a very good business. One thing that we're also unique about is that we've we've opened up service facilities, or most manufacturers don't tend to do that they go to private distribution. We like this blend that we've created. And it helps us understand. So we have

08:52

explained a little bit about that. At

08:55

Deutz, AG, a German manufacturer with with headquartered businesses around the world like ours in Atlanta, Georgia, that takes care of the Americas. At one point in time, we had private distribution, who then went through and did dealer channel to get really hundreds of hundreds of service points in the industry. We began to put our own distribution channel together owned by our company, in markets that our key markets are where we had weak distribution, there'll be some blend, we have a very strong network of distributors, and where we don't we operate on our own. That's helped us learn the industry a bit differently helped us learn and see the sight of the customer more than the sight of the manufacturing buyer. So when you're very good at something the manufacturers it isn't a guarantee you understand the end user business and this has helped us understand that.

09:46

So in that scenario, if 80% of all the equipment, theoretically 80% of the equipment is being rented in some fashion. There is a life expectancy of that equipment. What is the aftermath? market look like when when it's like, Okay, I'm getting a new one. I'm getting a new engine. What does that look like? Yeah,

10:09

so you brought up that things have changed. And they have, if you looked back 20 years ago, you'd say that maybe in seven years rent the machine will be exported to a lesser regulated country at a deal. Yeah. So lots of exports of used equipment to all parts of the world because they don't need a high cost, high valued piece of machinery. Yeah. However, with the impact on the engine business, which is a lot aligned with emissions, exhaust emission, yeah, some of those machines can't be used outside of countries like America and Canada, and mainland Europe, they take a certain type of fuel. So the idea of taking the machine from, from Texas, using it seven years and putting it across the border, and Mexico really doesn't work doesn't work, and the fuel for it, or they have to get the fuel for it. And that's more cumbersome than just taking a machine that's purpose made for that market. So yeah, you look at your rental life going longer in yours, or possibly it just goes to have a resale market to a part time user, a small contracting company or a business farm, for example, they would take some kind of machinery they wouldn't afford before. Yeah,

11:19

changed? Yeah. It's dynamic. If if in the aftermarket, it's somebody else's takes that responsibility. You're you're you're focused on today, and you're focused on the market today and providing the services as a solutions associated with clients, correct.

11:36

While the market is very important, oh, the revenue stream long term, you want to count on that, as a business manager, quite keenly, you'll look at where you're going to make your revenues in the first five years, a second five years, and maybe the third five years and try to capture all that business. Yeah, sure, at some point in time, your customer base tends to go from genuine to a non genuine source. And that's where you've lost opportunity. So it's very important to understand where this machine is going for a long period of time.

12:06

It's just a dynamic world dynamic, but you can handle it, right. And

12:11

it's not just on the engine side, there's a powertrain side, there's a machinery, they're doing the same thing. They want to capture that business as long as you can. Do you

12:20

find that in SA model, it's it's imperative that there's a collaborative type of relationship with certain trusted companies to make sure that things run a little smoother.

12:33

That's a good question. And it does occur. So when I mentioned that some rental life may have been seven years, some of those collaborations that we're talking about now actually result and refurbishment projects, even though you come in maker wants to keep his hands into that revenue source and customer service for a second period of time. And they'll do it by remanufacturing. Or resurfacing the product and making it almost like no.

12:58

So it's interesting. There's a company called FANUC. Ready, you've heard about it, and they're taking old CNC machines or just machine parts. And they're able to sort of retrofit something that's a little bit more current, but on an existing, and I think it'd be 40 years old, but they're able to sort of shoehorn and retrofit something a little current to be able to manage that that asset, extending the life. Sure. And being able to do that, I would imagine. Do you find some of your clients saying, I don't want to get rid of this? This is this is my baby. I'm

13:36

no, no, you'd be surprised the refurbishment businesses is quite prevalent. Imagine imagine, imagine what happens on an airport property with those, I'll call it a baggage cart, right? It really doesn't leave more than two or three miles mostly just looks worse for wear. It isn't terribly in bad shape, but to repurchase, it is very, very expensive. And to renew it not that it's not expensive, is much less. So you'll see those kinds of machinery be renewed all the time. Why wouldn't you and they might be upgraded. They had an old technology powertrain to a new technology powertrain, and in the process even still looks old, beaten up, even pulling edges out and putting a battery electric in and then repainting it. So it does get a new lot of new life. And it's seen everywhere. It's a neat time.

14:21

That's exciting. And it's so exciting. So outside of that you guys have got your hands in a number of things, which is just very, pretty cool. What are some of your just challenges that you see?

14:36

There's there's more to come on the admissions front. There's more to come. There's new rules on the way there's still a separation between the Americas and Europe, which is cumbersome, if you're in that business having to make two products. And then there's the new fuels coming. So everything has to work and needs to be in harmony. And if it's not, you're not gonna be successful

14:56

it is. He just kept it off, kept the conversation out. on a high note, how do people get ahold of you? They're

15:02

John dice.com. Are you out on LinkedIn? Sure, John Dutcher on LinkedIn director of regional sales.

15:10

There you go, man. I'll have his stack card out there. So don't worry. It'll be out on Industrial Talk. You were absolutely spectacular.

15:17

Thank you very much.

15:18

I really enjoyed the conversation. Now we're gonna have once again all the contact information for John out in Industrial Talk, reach out to this gen. He knows what he's doing. He's been at for what 75 years. Close started to the map didn't work. Anyway, we're gonna wrap it up on the other side. Stay tuned, we will be right back.

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You're listening to the Industrial Talk Podcast Network.

15:45

All right. John's was named. Dutcher is his last name. Deutz Corporation is the company. And there are a lot of major assets out there. We were talking about rental and how to keep the world moving. Big time. This is a must connect. This was at a safe what? Our kids? Absolutely, let's do power. But anyway, great conversation, got a lot of mad skills out there. Reach out to him all the contact information for John will be out on Industrial Talk, you know that. All right. We're building a platform platform dedicated to you industrial professionals, you want to be on the show. You want to sort of expand your you know, your your message, get on Industrial Talk. It's easy. You go out to Industrial Talk.com You just say I want to talk and it happens. It just happens. Because we we embrace innovation to technology here at an Industrial Talk. Once again, about education, collaboration, innovation. It's a platform for collaboration. Be bold, be brave, Daring Greatly hang out with John, change the world. We're gonna have another great conversation shortly.