From nuclear engineer to business turn-around executive to crane company CEO, Jeff Bust is an engaging leader.
Jeff Bust, chairman and CEO of Broderson Manufacturing Company, has had what he terms “an interesting and varied career.”
After talking with Bust and learning about his rise through the crane and other industry ranks, I would be inclined to embellish that statement. A former naval nuclear engineer, Bust is a graduate of the U.S. Naval Academy. He has been a top executive for several prominent companies, including P&H, Manitowoc and Grove.
“I went to the Naval Academy because it was the only college education I could afford (free),” he said. “I became a Mechanical Engineering major at the Naval Academy because that was the strength of their faculty and curriculum. I became a naval nuclear engineer because the Navy needed nuclear engineers. During my service in the Navy I liked being at sea and having large responsibilities, but it was not a good career path for raising a family because of all the time at sea.”
So he left the Navy and earned his MBA at Dartmouth College in accounting and finance. He figured that was the best way to transition into business and civilian life.
In the early years of his business career he was focused on manufacturing and operations, working for P&H, where he served as president of the mining division. He first came in contact with the crane industry while at P&H, although the company had exited the crane business before he arrived.
“But we were still working through some of the transition issues,” he said.
He became directly involved in the crane business while working at Manitowoc and Grove Worldwide.
“The crane business has a rich mix of attractive attributes including worldwide markets, interesting equipment and designs, challenging applications and most importantly a user base that knows their business and respects honesty and hard work,” he said.
He later served as president of Manitowoc Cranes and CEO of Grove Worldwide. After the two companies merged, he left the crane industry, and for several years specialized as a business turn-around executive for companies like Blue Bird Corp., JMC Motors and others.
Bust is known for having good instincts and for being a straight shooter. He is also a genuinely caring person.
“I came back to the crane industry as president of Broderson because of my long term friendship with Mike Lanigan, president of Lanco Group,” he said. “I knew Broderson well from competing with them while I was at Grove and I respected their simple, solid products and culture. I had wanted to work for Lanco Group for years and was waiting for the right opportunity. When Lanco acquired Broderson I felt I could make a solid contribution.”
I have visited with Bust a few times through the years, when he was at Grove and more recently at the Broderson booth at ConExpo. I consider him to be one of the sharpest people in the crane industry and also one of the most genuine. He is the perfect person to lead Broderson into its next chapter.
His answers to my questions are forth-right, comprehensive and enlightening.
You have been in and around the crane business for many years? What are the most prolific changes?
I am an engineer so I am tempted to say the changes in hydraulic component and system design, changes in boom design, mobility related design improvements and that never ending journey for longer, stronger, lighter equipment are the most important changes I have seen.
Practically though, the change from an ownership based market model to a predominantly rental fleet market model is the largest change I have seen in the crane business.
What are the biggest challenges for U.S. manufacturers in today’s market?
There are many challenges facing domestic crane manufacturers. The move to a predominantly rental-based delivery channel for cranes makes it easier for international manufacturers to enter the market and reduces the distribution/dealer channel advantages domestic crane manufacturers used to enjoy. The internet makes product information, pricing and availability readily available and crane buyers are more aware of international products. Crane buyers are better informed.
Then there are the currency/exchange rate challenges that currently work against domestic crane manufacturers. I think though that the biggest challenge most domestic crane manufacturers’ face is the inability to take the long view strategically. It is harder to compete when you are managing a business with an eye to next quarter’s investor’s call. Broderson is lucky to be part of a family owned company with extensive experience in the equipment industry.
Broderson is a solid company with a rich history. What distinguishes the company in the markets it serves?
We keep it simple both with our products and our business culture. We build good products, focus on serving our customers and work to earn a profit. We are small enough to be directly accessible to our customer base at every level of the Broderson organizational structure. We are small enough to keep everyone in Broderson aligned to consistent common objectives. We compete in a small market segment where the scale advantages of our bigger competitors are not meaningful.
In fact, being small and focused gives Broderson an advantage. Our long term consistent performance and narrow focus distinguishes Broderson in the market place.
What is the scope of the Broderson product range?
Broderson currently is delivering eight industrial carry deck crane models, all but one being offered with diesel, dual fuel or LPG engine options. The smallest industrial carry deck model is the IC-20 with a 2.5-ton rated load capacity. The largest industrial carry deck model currently in production is the IC-400 with a 25-ton rated load capacity. In December of this year we will begin production deliveries of the IC-600 industrial carry deck crane we introduced at ConExpo. The IC-600 is a 30-ton rated capacity crane. The IC-400 and IC-600 are only offered with diesel engines.
Broderson is currently delivering two cab-down rough terrain crane models, the RT-300 and the RT-400. The RT-300 is a 15-ton rated load capacity crane and is a long term member of our model portfolio. The RT-400 is a 20-ton rated load capacity crane. The RT-400 also debuted at ConExpo and is currently in production.
Broderson also introduced the RT-500 cab down rough terrain crane. The RT-500 is a 25-ton rated capacity crane and will begin production deliveries in November of this year.
Broderson looks for small niche market segments and the MTL-225 material handler we introduced at ConExpo is a good example of that focus. The MTL-225 is a 22,500-pound rated capacity unit with fork and hoist capability. It is a front wheel drive, rear wheel steer, tight turning material handler without outriggers. MTL-225 production deliveries will begin in 2018.
What are Broderson’s primary markets?
Broderson cranes are used in oil and gas, automotive, steel, mining, paper, chemical and power generating industrial applications as well as in general construction and infrastructure construction applications. Broderson products are used extensively in refinery and chemical plant turn-around projects. Broderson cranes perform routine maintenance in a variety of industrial applications. Our largest markets geographically are in North America.
How do you characterize the market for Broderson’s products?
Like all crane markets, Broderson’s market is cyclical. We are seeing a good rebound to a positive cycle this year after two down cycle years. This same cyclic pattern has repeated itself for the last 30 years. Broderson manages itself to this demand cycle. Our business processes are designed to be profitable in down cycle periods with a minimal amount of headcount changes or organizational adjustments. Our business processes are designed to be flexible enough to meet up cycle demand.
We believe we have a role as a manufacturer to manage our markets. Over producing cranes in a down cycle destroys pricing and used equipment/installed fleet values and contributes to pushing down rental rates. At the same time, we must meet demand during the up cycle periods. This is our market reality and we accept it.
Do you envision expanding the Broderson product line? How do you approach product development?
Broderson fell behind in product development prior to the acquisition by Lanco, so we have been doing some catch up recently. The biggest comment I receive from our customers is don’t change anything, but that is unrealistic. Component suppliers’ change, components go out of production, EPA engine changes are required – all of these factors mandate product design changes. A stale product line-up also holds down rental rates because older equipment is not distinguishable from newer equipment. There must be a balance and that balance for Broderson is always influenced by our culture and focus on keeping it simple.
Our product development process at Broderson is all hands based. Every function has a role and we all put our shoulders into the effort. It is also very hands on. I am very pleased to continually see Broderson engineers on the shop floor covered in grease or asking our shop technicians questions on designs. We leverage the open communication environment we have at Broderson and receive unvarnished input from our customers, field service techs and crane operators. We start design projects with well-defined requirements, detailed schedules and modular cost targets.
We only have a handful of engineers so keeping everyone on task, minimizing bureacracry and working together is easier for us than larger companies.
Do you envision acquiring other product lines?
Our parent company, Lanco Group, is always in the market for new product lines. We like to target niche markets and look for ways to leverage existing businesses and distribution channels. Lanco Group acquired the rough terrain forklift manufacturer Liftking in September 2016. It is a good example of our acquisition strategy. Liftking is working with Broderson and other Lanco operating companies to leverage distribution channels, production resources and sourcing alternatives.
At ConExpo, Broderson had a strong presence and a range of new products. How do you characterize this tradeshow?
ConExpo is Broderson’s primary tradeshow. The attendance includes an excellent representation of our primary customers, suppliers and business partners. It is a hectic week of meetings, hospitality and selling activities. It gives Broderson a chance to demonstrate and practice our team skills because everyone pitches in with booth setup, customer discussions, supplier discussions and everything else associated with the show. For Broderson, we don’t attend ConExpo, we participate in ConExpo on a full contact basis. It is an intensive whole week immersion in our industry.
Reflecting on your time at Grove, and now being back in the crane industry with Broderson, what are the contrasts? Similarities?
Broderson is a much smaller company than Grove. My daily routine is to walk the shop shortly after I get in every morning, and while I knew many of the Grove folks by name, I did not know them all. My day always starts out well with a few quick conversations with members of the Broderson team. I also am happy to not have to worry about investor and bank communications.
The best part of being back in the crane industry is renewing relationships with customers and colleagues I haven’t met with in a while.
What is your business philosophy?
Businesses get in trouble because of arrogance and complacency. If your head isn’t filled every day with ideas on how you can get better or faster you are in trouble. If you think you’re the best – you aren’t. If you think you can relax – you can’t.
What do you do in your leisure time?
My brother and I own some ground in the middle of nowhere South Dakota. I like to operate and maintain the equipment, play farmer and hunt pheasants and deer. My two sons come out to help with the projects and I have that special time with them. I also like to read and play very mediocre golf.