Interview: Wacker Neuson America CEO explains new alliance with Deere
By Jenny LescohierJune 17, 2022
It was announced on June 14 that Wacker Neuson would begin manufacturing mini and compact excavators for John Deere in North America, with the first machines arriving in the market by 2024. The move comes just months after Deere’s divestiture from its decades-long joint venture with Hitachi for excavator production.
Under the new cooperative alliance, Wacker Neuson will manufacture under 5-tonne excavators for both Wacker Neuson and John Deere at is factories in Menomonee Falls, WI and Linz, Austria. In turn, the 5- to 9-tonne machines will be built by Deere using designs acquired from Wacker Neuson.
To dig deeper into what this new alliance means for the two companies, and for the people who own and use their equipment, we spoke with Gert Reichetseder, president and CEO of Wacker Neuson America Corporation.
CONEXPO-CON/AGG 365: The new alliance is big news, but Wacker Neuson and John Deere have had a relationship for some time, with under-5-tonne machines built for Deere in China for the Chinese market. Are these the same machines that will now be available for North America?
Reichetseder: We’ve had an alliance of cooperation with John Deere in China and the Asia Pacific market. We kicked it off in 2018 at our plant in China, where we’re building the 1.7-tonne excavator, which is pretty much the same as what we’re building in Europe for the rest of the world.
In China, we’re also building Chinese-specific machines, 6-tonne and 7-tonne models sold under the Wacker Neuson brand.
The 1.7-tonne machine produced there also goes to Australia, along with a 3.5-tonne machine which comes from our plant in Austria.
In the U.S., we’ll be building only the models that are most important for the U.S. market, the 3.5- and the 4-tonne models. We’ll bring these into our factory here in Menomonee Falls, however, we need to touch up the design to localize it for the U.S. market.
CONEXPO-CON/AGG 365: Will there be significant differences between the machines made for Deere and those made for Wacker Neuson?
Reichetseder: The idea is to utilize synergies and economies of scale. We’ll have the same base machine, but whatever technology options Deere adds to their machines will differentiate them.
Wacker Neuson had been in a cooperation alliance with Caterpillar for quite some time, until 2018. From that relationship, we learned our way around utilizing economies of scale and synergies. We’ll have the same basic machine, but they’ll be differentiated.
CONEXPO-CON/AGG 365: You mentioned the company’s relationship with Caterpillar. Why do you think the biggest OEMs want to work with Wacker Neuson?
Reichetseder: We have a good machine, we know what our customers want and we’re easy to work with.
It’s a compliment and it tells us we’re doing something right… it helps us here in the Americas to speed up our strategy to bring our excavators over here. It makes us more professional in the fastest way.
On the other hand, we would never get into dependency, where the majority of our business is for another OEM. Then we’d be putting all our eggs into one basket. We believe in the Wacker Neuson brand and we believe if we do things this way, it helps us become more professional.
To answer your question, if you look at our product portfolio and our manufacturing footprint, there aren’t too many others out there.
We’re happy to get this thing going. There’s a lot of work that needs to be done to bring it live, so to speak, since we are not yet producing a single excavator here in
our factory in the U.S. We need to prepare accordingly.
CONEXPO-CON/AGG 365: What are some of the benefits of this arrangement for Wacker Neuson?
Reichetseder: Our goal is to grow further. We want to have profitable growth here and gain economies of scale. This is what this OEM partnership helps us with, number one.
Number two, when I came [to Wacker Neuson America Corporation] three years ago, we always had in mind to realign our strategy here and excavators have been a part of that.
This OEM alliance helps us speed it up because we can get a critical volume so it makes sense for us to manufacture certain products here faster than if the goal was just the Wacker Neuson brand.
Last but not least, zero-emission, battery-electric vehicles or excavators are very important for us. This cooperation and partnership will help us to speed up the process in the Americas region.
These are the three goals which we have and that’s why this alliance makes sense for us.
CONEXPO-CON/AGG 365: The electrification of equipment is something Wacker Neuson has focused on for years. Do you see this alliance pushing North American equipment owners and operators further toward acceptance of those alternatives?
Reichetseder: We know Europe is ahead of the game due to regulations and other things happening there. Those are also coming in the U.S. and Canada. I have strong belief that this cooperation will help us to speed up the process of customer acceptance of these products. With the combined forces we have, absolutely yes.
CONEXPO-CON/AGG 365: How many additional jobs may result from this alliance at the Menomonee Falls, WI plant?
Reichetseder: We need more people. We have a huge plant and we are building skid steers, generators, light towers and more here. We already have a very successful business which is growing and will continue to grow.
However, if we realign our assembly structure here, we believe we can leverage our existing footprint much better so we can cover this additional volume for Deere and for Wacker Neuson.
So, at a minimum, we are going to double our production workforce by 2025.
CONEXPO-CON/AGG 365: When will the first Deere models be in production?
Reichetseder: The first ones will be the smaller ones from Austria, the 1.7- and the 2.6-tonne machines. U.S. production will follow that with the 3.5- and 4-tonne models.
The 3.5-tonne machine will have a major redesign to localize it for the U.S. market. This will be a win, not just for Deere but for Wacker Neuson, because our customers will get a machine built in the U.S. for the U.S. market.
The worldwide market volume for the 3- to 5-tonne machines is the biggest in the U.S. We have had machines in that class, but we need to touch them not only for localization, but also to improve them a little bit here and there. That’s why they will be coming in stages. The first machines will come from Europe in 2024, and the other models will come in subsequent years.
CONEXPO-CON/AGG 365: Do you see any further developments to this alliance in the future?
Reichetseder: We have made a new agreement that covers the excavators, but the two companies have been working together for years already. It’s not a secret that we’re working the other way around – with our Kramer brand, which is under the Wacker Neuson umbrella, we’re selling telescopic loaders through the John Deere dealer network in Europe.
We also have a cooperation with Hamm, which is part of Wirtgen, which is part of Deere. We have good communication and cooperation there.
If you look at the product portfolio, there definitely are opportunities for other things as well, but this is not part of the current agreement as it sits right now. Nothing else is included, but nothing is excluded at the end of the day.
As I said earlier, Wacker Neuson has no intention getting into dependency with a partner. We still believe our DNA is the recognized Wacker Neuson brand.