Six Questions For...John McDonough
John McDonough
 President |
1. What are the most important challenges facing operators and what are your companies doing to assist them?
Beyond the economy, operators we do business with are most concerned with reducing both program costs and their overall costs of equipment ownership (lifecycle performance). Our clear focus for some time now has been on helping operators improve energy, water and labor efficiencies dramatically, and on backing up our equipment solutions with a comprehensive aftermarket service capability. More recently, however, the rapid escalation in water and energy costs in this country has helped not only to strengthen the green movement, it has also made operators much more open to exploring new technologies and changes in operating processes. This operator hunger for sustainable operating savings and improvements in performance has translated into much more than just a hunt for the next "faster, cleaner, cheaper" product. Collectively, we must learn to design and deliver solutions based on a real-world understanding of the operator environment and become equally adept at speaking with them in that context.
2. What are your expectations for U.S. equipment sales during the rest of this year?
We're pretty sure that demand for heavy equipment will remain soft throughout the rest of 2010. Sales of light equipment and supplies have been recovering for the past six to nine months, but engineered equipment is still lagging. I think many of us expected to see an industry-wide recovery by now, but we misread the economy's ability to create jobs. A key metric for us is the pace of new construction, particularly in the noncommercial sector, which has been very slow to show signs of recovery. Fortunately, we're seeing an uptick in design activity but, at this point, we will likely not see any meaningful recovery in new construction until Q1 of 2011 at the earliest.
3. Which world issues keep you up at night?
The volatility in price and availability of metals, if only because of the wild fluctuations over the past several years. While we're seeing greater stability now, commodities in general are so subject to uncertainties and manipulation that future supply-and-demand balances and the resulting impact on prices of metals is very difficult to predict. Furthermore, in response to the huge shifts in core commodity pricing in recent years, particularly in nickel and chrome that are essential to stainless production, the mills and distributors have dramatically reduced inventories throughout the supply chain. Any significant recovery of demand will likely strain that supply chain and put considerable pressure on metals pricing until resolved. Another concern is the increase in foreign competition that's coming into the heavy equipment categories in both the spec- and value-tiers of the market. The globalization that long ago took hold in the supplies side of our industry is finally hitting heavy equipment.
4. What was the best meal you enjoyed so far this year, and where and with whom did you eat it?
During the week before the NRA Show, I went to Mia Francesca on North Clark Street in Chicago with my wife, Ann, and my youngest sister, Alana. Alana was embarking on an exciting new venture, the atmosphere in the restaurant was relaxing and fun, and the northern Italian food was delicious, so it was a highly enjoyable meal experience.
5. What would you most like to change/improve in the relationships between equipment makers and operators?
The biggest problem operators have with factories is that we, as an industry, still don't understand what really goes on in kitchens when meal production is in full swing. The result is that many of our product designs and capabilities simply miss the mark. The best thing manufacturers can do to improve relations is to learn more about operators and their programs, and to design solutions to meet their actual needs better..
6. Which parts of the world do you still want to visit and what do you want to do there?
I'd most like to spend more time in China, India and Latin America to understand better the emerging economies and underlying cultures of those societies. It has become increasingly important that we understand how developments in Asia and Latin America will impact us personally, in our careers, industry and society..
