I can't say this comes as a surprise. The NACCO stock holders have been clamoring for this type of "spin off" for years. Their feeling was that the lift truck business was holding down the stock price due to it's continuing inability to generate continuosly significant margins at the same time they grew share. North American Coal Co. is the goose that keeps on laying the golden egg much more consistently than the lift truck group can manage. It will be intersting to see if the lift truck group can improve their situation by standing alone or fall further into the hole of disapperaing market share and profitability that they have managed to obtain over the last several years.
They do have several pluses that they would bring to the table in a sale, merger/aquisition scenario. These would namely be - strong brand names with Hyster and Yale (at least in the US), a good dealer network. Their product offerings in the counterbalnced segments are good. Their Class III products are also good and benefit from Yale's success in this segment over the years. Their Class II performance would be non existant without the Lowes store business. They also have a large national accounts sales group that is a plus.
The weaknesses that I see are - a very mediocre management group that practices the "you will do this or else!" approach and expects a higher level of "workaholicism" from their subordinates than they exhibit themselves. The lack of both a strong knowledge base, proven high performance and productivity driven product designs coupled with the massive amount of times they go through reorganizations without really understanding what therir dealers and ciustomers need or want will not help the "new" NMHG be any more successful than the old NMHG. The bottom line is that the industry has passed them long ago and they are always trying to catch up.
I am a long time retired so I am not saying these things to make myself look good or NACCO look bad, these are just my observations and thoughts driven by 40+ years in this business. Our industry has changed dramatically over the last 10 to 15 years and not all of us have seen or understood these changes. The paradigm has shifted several times and continues to evolve. Potentially the best scenario for a successful future would be to sell themselves to or merge with a much more globally savy lift truck company such as but not limited to Linde.
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That's interesting because Hyster have singed a agreement with Tractors of India for them to produce older large Hyster trucks there for the local market. I know heli have a quite good new truck called the G series that looks like a CVS to come out soon i have seen pictures of this truck and it looks like it might be quite competitive against the hyster ,kalmar Kone Linde models this truck would have over 50% of the same or similar parts as the major producers , So if Hyster are looking to work with Hangcha on a big truck it would be to protect its market from both Heli and Sany who are also looking at developing a large truck range. The one thing about big trucks is that you don't only have to develop the trucks you must develop the services to go with them. I know that Clark have supposed to have bought Omega in Australia so the big truck market is set to get quite interesting. there will be more Large truck manufacturing moving east
If you were to look at the HC 12 - 16 ton range of truck against the kalmar range you would see some quite similar trucks so by bringing in Nacco on the development of the big range would make scene as they would get a way from the old Kalmar shape and develop their own with help from NACCO. then work together on developing new ranges. Remember HC came out of building Nissan forklifts in China and have also good connections with TCM so they might just think bigger is better and try to make a large company to take on Kion and Toyota
Davelift, you seem to be well informed. I hear that Hyster engineers are working with Hangcha in China on the development of large capacity trucks.
Definately more to this arangement than first thought.
A report that i had seen from Al Rankin say's that the purpose of splitting off Hyster is to give the company greater flexibility to pursue strategic growth opportunities such as acquisitions and joint ventures,and to give Hyster-Yale direct access to capital and debt markets to fund these initiatives.
Might be Hangcha might play a bigger role in this than first thought. I can see the brands splitting in to different areas
Could I throw another spanner in the works here. Didn't I read in another forum that nacco own a stake in hangcha and this stake is the purpose behind utilev?
Could it be that nacco see the Chinese as the long term solution to solving any margin generation issues at the expense of sacrificing one of their more well known brands?
I have no idea if Naaco will sell or not. What I will comment on is they have an issue with the product line for both Hyster and Yale on class 1, 2, 3 products. Yale does do a better job than Hyster when it comes to warehouse products. The Hyster dealers are still stuck in the world of class 4 and 5 lift trucks.
So when people say that Naaco is losing market share, there right. Just go in look inside some of the big box warehouses and look at the brands (electric) of course.
The market is changing, the problem Naaco is that the market passed them up a long time ago. They seem to make some really good electric units now. Again, the dealers are still stuck in the old ways of class 4 and 5.
I can see a number of law suits coming if this does not go they way some dealers want. The Lawyers will be sharpening there pencils
dont look now but the newly acquired hyster dealer in the southeast has just announced that they are going to be the authorized yale lifttruck dealer in tennessee, NACCO appointed at that.... yeah i guess they are anxious eh?
It has begun!
Radical!
They would be the better bidder but would they want to go into manufacturing. From a business prospective it would be better for them. they would control the supply of their equipment and would be able to probably generate better profits by combining the business. This would then go back to my earlier peace would Yale become the major name with hyster only doing big trucks over 8,000kg
i think the only company that would be interested in Buying it would be INCJ. They have the capital and could integrate it into its own Business given it a opening to better North America presence and a opening into the big truck market. I would all depend on what value NACCO puts on the business.If not INCJ then possibly a Chines manufacture might come in for it. The big problem is there is not a lot of capital floating around and there are better deals in the market than NACCO. There some large construction machine manufactures in China who would have the capital Like Sany or XCMG , the only us company would be Terex but i don't think they would go for NACCO it would be to much. INCJ would like the deal as it would give it a turnover of around 3.3 Billion dollars to make it the third largest forklift manufacture based in turnover by quite a way. And with the Hyster , Yale ,TCM , Nissan and the UTILEV bands it would be able to compete with KION and Toyota in all markets and segments
It might not be their most profitable division but it was their largest profit center compared to the rest of their division. According to most of the articles I have read it made up 78% of their sales and 79% of their profit.
Still part of Nacco but run as a separate division.
Definitely the first step in a sale. NMHG, with good market share and low profitability, is a ripe target for an investment bank(think Bain Capital) to come in and gut costs and re-sell at a tidy profit.
Unfortunately, rarely will you get a better product as a result, And a few execs at NACCO will make a nice chunk of change off the sale.
Good luck, everyone.
I can't see the UTILEV brand being good for NACCO because it is a badge truck from hangcha. after time the only winner on this will be hangcha as they could say to customers you have been using our truck for the last so long now here they are at a lower cost. It's never any good to do a badge deal unless you own the company that is building the badge trucks. I think Linde do this with baoli in parts of Asia. they do a low cost linde thats a baoli truck painted red
I agree with sport05, selling may be sooner rather than later. The family ownership of NACCO is not getting any younger. There are several Hyster Dealer Owners getting very close to retirement and have not been on the same page with the direction of NACCO over the past years. The merger of the two brands with a so-called Yale sales team and Hyster team has not resulted any increased share. They have been fortunate to hold on to their current share. In order for the dealers to sell this UTILEV truck(Hangcha Mfg.) the dealers must sign the current dealer agreement. Some Hyster dealers are still dragging their feet.
I should think that the local Yale dealer is anxious about this since acquiring the local Hyster branches. A bad omen!
I can see the Hyster brand just being in big trucks over 8,000kg and container handling and Yale looking after the rest. Yale side of the business seems to be on the up side with Brigss locking to expand both in US and possibly Europe ,NACCO main area of business seems to be in North America with $1.57 Billion of total sales. This also could be a opportunity to sell the business to either the owner of Briggs or the new TCM Nissan company. ether way you can now see the end for BW in the forklift business.
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