With a history of major business triumphs, Dr. Peter Schiefer has always been a quick study. Tall and stately, Dr. Schiefer has amassed a skillset that gives him a unique perspective when it comes to running a multi-national tower crane company.
Dr. Peter Schiefer, CEO, Wolff
Born and raised in Germany, Schiefer studied electrical engineering at the Technical University of Munich. He went on to get his Master’s and Ph.D. degrees before taking a job with Siemens in Santa Clara, CA. He spent five years commuting between the U.S. and Europe, working through the ranks as a software engineer, business development associate and product manager.
In time he would move back to Germany to run a unit within Siemens’ telecommunications division, which under his direction grew exponentially. He began working in private equity and venture capital for Siemens and was soon promoted to its power generation group, heading the automation and control division. He directed the division that employed 1,500 and had a turnover of 1.2 billion Deutsche Mark.
He was then recruited by Goldman Sachs as managing director in London. Following that appointment, he joined a private equity group in Munich that purchased a renewable energy business unit from ABB, which was involved in developing and operating wind farms.
“What I realized when that deal closed was that you can really do these deals on your own,” he said. “Then Wolff came around and was offered for sale and it was offered to me.”
But rather than just make a deal, Schiefer saw Wolff as a company he could build, nurture and grow.
Over the past decade, I have met Dr. Schiefer at the Bauma and ConExpo tradeshows, and we have reported on Wolff’s successes in the North American tower crane market. For the past couple of years, Wolff has hosted a holiday party for its customers and associates in New York City. ACT was invited, and we saw it as a good time to catch up with Dr. Schiefer to get his take on the U.S. tower crane market and learn what’s going on with Wolff.
One-on-one, Dr. Schiefer is sharp, conscientious and confident. At the party later that evening, I observed him greeting and chatting with customers and Wolff partners. He was cordial and genuine, and a lot of laughter was shared. I could see that these people are more than business associates to him, they are also good friends. I think you will be interested in his answers to my questions.
What’s your take on the North American tower crane market?
The current picture – I think we are still in a strong upswing. And I think in terms of real market opportunity, we haven’t seen it all. The U.S. economy is strong and can produce a lot more in terms of re-development, new commercial properties and infrastructure work. There is strong market potential.
There is a second factor in that some of the philosophies and methods to approach the building side are changing. Where traditionally we saw a contractor bring in crawler and mobile cranes to start the site work, people have started recognizing the benefits of having a tower crane on the jobsite. The smaller footprint, the higher durability – there are a number of positives you can’t beat. This is opening up a totally different market perspective and market opportunity.
What have been/are your strategies for developing business in North America?
When Wolff invented the tower crane in 1913, it was an international company. As they grew, they had cranes in Europe and Asia, and the company has a long history in the United States. The previous owner shut down the U.S. market a long time before I bought the company.
We have an international product and in order to really balance the company and its portfolio, we have to be in the international markets. In the U.S. it is particularly interesting because we think we have exactly the right product. It’s a product the U.S. market asked for, they are used to it and it’s what they want.
We also see a number of changes in awareness and approach. A good example is in New York City, where our entrance [to the market] was triggered by the Department of Buildings. There had been some fatal crane accidents, and they were taking a close look at who is in the New York City market and who is offering tower cranes. The Department of Buildings concluded they needed additional players, so we were invited in for a beauty contest. I think we have clearly demonstrated what Wolff is capable of producing quality cranes and offering strong product support and spare parts.
[Due to my background] the North American market is close to my heart, and it was a natural step for Wolff to come back to the U.S. market. I think it can be one of the biggest and most important markets for our cranes worldwide.
People told us it will be very complex, but at the end of the day we have not had a single incident that was unreasonable. We have been spot-on in the market, and we know what our customers want.
What were/are the challenges in the roll out of the Wolff crane range in North America?
I think it’s really a boring answer. It was not an extraordinary challenge. I think just everything we should do in a very detailed and comprehensive way was demanded and double checked. In terms of technical requirements and documentation, it’s been very straight forward. Maybe in Europe someone cuts a corner, but here everything was demanded right on the spot and you have to deliver it.
You mentioned coming into New York first. The government here isn’t known for being the most crane friendly, and Crane Age has an issue here and in other large cities. I don’t want to put gas on the fire, but it’s not necessarily about the age of the crane. It’s how you follow the procedures, how you take care of the crane. Can you prove what you’ve done with each machine and do you keep all the records? Do you follow the manufacturer’s specs in every aspect of the crane’s operation? Do you control the process from A to Zed? If you don’t do all of that, the crane is not going to be safe. This is quite a complex test and we have the people, the abilities, the energy and the passion to do all of this.
In North America, are you pursuing strictly sales of your cranes or are you also renting cranes?
Our model is selling and the partners who buy from us. We have a selective group of partners and they can also rent from us. There is virtually no limit on that. If they need equipment, they can get it from us. We do not compete with them. Yes, we are selling cranes and renting cranes in North America.
What is Wolff’s service and spare parts model?
Our prime focus is to have a quality team of service technicians and available spare parts even before the first crane gets there. A higher quality product may mean higher prices. You have to expect the crane will work and if it goes down, it gets fixed within hours, not weeks or months.
Wherever we have a larger population of cranes we will have the needed service technicians and spare parts available. We train our partners, so they are all geared up for this.
Our partners are usually a mix of a dealer and rental company. They have a direct access to the market.
How do you counter the lower priced OEMs fROM Europe and Asia who are now pursuing the North American tower crane market?
We know how difficult it is and how complex it is to make a tower crane a completely safe product. Steel structures have been around for a hundred years. You add some electronics and it appears to be that simple. But when you dive into it, and you look at the mechanical engineering part of it, and the safety of it, you start with little things like nuts and bolts. You advance to steel and electronics quality and you are dealing with 200 to 300 items, where each item, if done incorrectly, can have a severe impact. A small issue out of 300 items can cause a complete failure of the crane.
We want to go to bed each night knowing that we have not cut corners.To accomplish this, it takes a lot of people and a lot of knowledge.
We know some of these names very well. They are not producing even close to the quality of product that we produce. At the end of the day, the market is smart. It takes so much more to really discuss, check and control every single detail, and only then can you produce a truly safe product.
Here’s another indication – check the used crane prices for tower cranes that are 15 to 20 years old. There’s a reason why one or two brands in the world still have very high prices.
Right now, it’s a chase and we have to be fast. People are snapping up the equipment, regardless of the age or how well the equipment was treated. In times like this, when the economy is good, what’s going to happen is some of the sub suppliers will make a mistake and you may have components that aren’t safe. What you have to do is increase the quality assurance measures and exercises to make sure every step that you take you are producing quality.
Initially, if it’s done right, it’s expensive. But actually, if the processes are right, it’s going to end up being a cost savings. Initially, to install the program you have to treat it as an investment. Invest in quality and you will see the return.
What new models are in the pipeline for the U.S. Market? Big luffers, for instance?
Our approach is, because we have short delivery and development time compared to competitors, we are extremely close to the market. When we see a trend, we can react early. Right now, I don’t necessarily see an appetite for larger luffers, but I could see that down the road. Our Wolff 1250B installed here in New York City, size wise, is a great luffer at the top of the range.
When you look particularly at the U.S., what’s going to be interesting is with building approaches changing from crawlers and mobile cranes to maybe using more tower cranes, there’s also a rising demand for smaller tower cranes. It’s not just the big beasts.
You are now 13 years with Wolff and the tower crane product? Is the company where you want it to be?
The answer is yes and no. No, in the sense that when I bought Wolff in 2005 anything that happened thereafter was beyond my wildest expectations. I think the path we’ve taken was unexpected.
A tiny, small company is now one of the major players. We are investing more capital into our rental fleet per year than our total revenues in 2005. The figures have grown; we are talking about making an annual investment of $30 to $40 to $50 million into the rental fleet. Hold on for a second. We are talking about $50 million in capital!
I am very happy and very proud of what we as a whole team have achieved and accomplished. Could we have been a bit further down the road in some ways? Yes, maybe. I think in total the whole team has done a great job. It’s been exciting through the years, including 2008 and 2009, as you know how the downside can look and how to react. You learn and make the company even stronger.
What do you like about this industry?
It’s the people and the product. I think once you understand the product you can get addicted to tower cranes. And you are addicted for life. You have a lot of extremely passionate people who live, breathe and die for the cranes. I think it’s a life sentence. You don’t get out of it.
What’s your business philosophy?
Be extremely customer focused and customer centric. Be extremely fast to react and always be approachable. We must motivate everyone in the company to deliver to that first target. Not just motivate, but also encourage and empower. At Wolff, we are not going to get stuck in bureaucracy. And then in terms of the outer approach, you have
to keep moving forward in the development of the company. Standing still is not an option.
What do you do when you are not working?
Lot of sports, depending on the season. I love playing tennis, mountain biking, swimming, water sports, wind surfing and snow skiing. Not just downhill, also uphill and climbing.
And if I have to, when it’s not possible for this activity, then I go to them gym. If I can do something outdoors that’s preferred. So, now I am looking forward to the winter season of skiing and hiking.