March 26, 2009 Breaking New Ground

Volume 12 | Issue 2

The life and resurrection of Thomas Equipment shows what can be done when sacrifices are made on behalf of well-built machines supplied to a

You can add any amount of sophisticated electronics to a piece of equipment but at the end of the day the machine still has to perform its function without breaking down. That’s called reliability. Thomas Equipment has built that kind of reliability into its machines since 1942, and still holds steady in 2009 on the premise that just because other manufacturers make machines with bling doesn’t necessarily make the products more durable in the field.

To understand this you need to speak with Al Potter, residential home and demolition expert in Calgary, Alberta, Canada, who has nine Thomas skid steers and says he won’t use any other brand. “Thomas Skid Steer Loaders have stone axe simplicity,” Potter says in a testimonial on Thomas Equipment’s Web site. “I consider a stone axe as basic and reliable, just the way I see Thomas skid steers.” Thomas skid steers, he attests, “are part of the solution I offer customers, not part of the problem.”

For years Thomas manufactured skid steers in the scenic maritime province of New Brunswick, Canada, a remote location that eventually made it difficult for Thomas to thrive. As the company struggled financially, its determination to position the Thomas Equipment name alongside the other leading competitors of this industry became as robust as the machines it offers. It just took a small case of confronting reality.

MILESTONE: FINANCIAL RESTRUCTURING
Tough financial times are never a good thing, but in the case of Thomas Equipment it made everyone step back and acknowledge that perhaps Eastern Canada wasn’t the best place for skid steer manufacturing. In fact, dating to 1942 when the Thomas brothers celebrated the completion of their first hydrostatic skid steer loader, the economics of their invention always eclipsed the invention itself – something that reared its head in late 2006, when a new management team was brought in to devise a reorganization plan to pay off creditors and enable the company to dig out a new road to growth.

Upon filing a reorganization strategy in February/March 2007, the new management took a renewed look at the landscape in New Brunswick: the Appalachian Mountain range, coastal beauty, great sand dunes … and a remote location that prohibited the viable manufacture of machinery.

“The economics of building skid steers here doesn’t work,” says COO Ilan Danieli, a member of the company’s new management team. “For example, you have to ship in materials and then ship finished goods out, and it’s very expensive because we are based in a very remote location. We tried to make the numbers work but we realized we couldn’t build machines to make money.”

In fact, Thomas Equipment was never successful at making a lot of money building skid steers in New Brunswick. For a long time, Danieli says, Thomas was owned by McCain Foods, one of the largest frozen food companies in Canada. McCain wanted to support its supplier base of potato farmers, and one way to do so was to locally build skid steers to help them in the fields. Subsequently, it bought Thomas. But the company floundered and never made enough money; in effect, it was McCain that kept the financially strapped Thomas in the black for many years.

Osiris, a U.S.-based holding company, purchased the company in 2004. When the new management team replaced the previous one in 2007, it decided to take a different look at the operation, and found that the best plan was to shift manufacturing to China, a decision Danieli describes as “painful,” but essential.

“We’re in the process of moving manufacturing and in February 2008 signed a contract manufacturing agreement to build our skid steers with GJK, a subsidiary of global ST Kinetics. Relocating our manufacturing operations over to China makes for a daunting project due to the many technical, language and cultural differences,” Danieli adds. As an example, the company’s original design schemes were based on imperial measurements, instead of metric, precipitating a mammoth and complicated changeover. In terms of the relocation, everything else – office, customer support, technical service, sales, spare parts, billing, etc. – remains in Centerville, New Brunswick.

Petter Etholm, President and CEO of Thomas Equipment and Osiris, said at the time the agreement was made: “The vast resources and product expertise at ST Engineering, a global company, and its GJK subsidiary, will provide Thomas with major support to deliver to our customers skid steers that represent both value and quality. Thomas will be in an even stronger position to support its customers in every way in the highly competitive international skid steer market.”

TRIED AND TRUE
And now, back to Al Potter, who has more to say on the subject of Thomas Equipment’s machines: “I have nothing against other brands that use gadgets, but when I am clearing debris from a worksite, I just need muscle and reliability and that’s what I get with Thomas.” The owner of Al Potter Services adds, “Thomas skid steers are easy to operate and fix. I can’t afford to have equipment out of service for any length of time. Thomas skid steers break down far less than competitive brands and I can generally fix a Thomas myself.”

Being antiquated sometimes isn’t a source of pride for companies; for Thomas, it’s a source of recognition. “A lot of our competition makes their machines with sophisticated electronics, but then they break down because those machines are called in to work in very rugged environments – rain, mud and dust,” Danieli says. “Customers like our machines because if there’s a problem, they can often fix them in the field themselves, and for the farmer, that’s essential. Otherwise the machine needs to go to the shop, and they’re losing money.”

Nonetheless, Thomas Equipment is keeping step with trends, particularly in the area of sustainability. “One of the areas we’re working in is green product development,” Danieli says. “Part of the consequence of an industry dominated by a few huge players, is that when you consider the environmental impact of a skid steer, the machine is still polluting. We started down another path, asking how we could be different.”

Thomas is looking at various areas of product development, among them a form of hybrid technology, and the use of more environmentally friendly materials, both plausible means to an end. The company is currently researching these two avenues for possible machine upgrades and advancements in the coming years. In the meantime, Thomas Equipment’s skid steers will continue to work hardy, lasting 20 years against some of the other competitors’ eight- to- 10-year average life span. “Our Thomas machines are like a strong, reliable car, except without the power windows and doors; but the car still runs and runs well,” Danieli says.

Among its most popular models is the Thomas 185, which replaces the Thomas 175, featuring high-lift bucket height over 11 feet, an operating weight of 7,200 pounds, lift capacity of 1,850 pounds and more than two tons of breakout force.

The Thomas 185 reflects the company’s aim to help productivity on construction, agricultural, mining and other worksites. It does heavy lift and carry jobs as easily as routine worksite tasks and offers cab comfort and extensive features.” Powered by a 4-cyclinder 59hp tier-three engine that meets or beats environmental standards, the Thomas 185 moves at nearly 8 mph and features an easy-to-service universal joint, rather than troublesome traditional bands, and has a 100-chain drive to deliver tremendous traction.

The Thomas 185 also includes standard features such as:

• sound suppression system kit around engine;
• fully lined cab for comfort;
• hand controls;
• self-level valve control;
• extensive extras from electrical rigging for future use and lockable fuel and hydraulic caps to dome light, horn and more.

The Thomas 185 Skid Steer Loader also features two in-line hydrostatic pumps to lift, pull, and hoist; dump height over nine feet; sure grip 8-ply or 10-ply tires for stability and pushing power, and a range of attachments and options.

Another popular model is the Thomas 153, containing a Kubota 4-cylinder diesel engine rated at 46 hp (34.3kW). Power is transferred from the engine to the loader’s hydrostatic pumps through an easily serviceable universal joint. A heavy-duty 100-chain drive provides powerful traction and pushing power to the wheels. A full 1500-pound (680kg) lifting capacity combined with more than 4150 pounds (1882kg) of breakout force allows the Thomas 153 to make quick work of any job.

It’s been the name of the game for Thomas for decades, and while others continue to devise new and more sophisticated gadgets to sell machinery, Thomas will continue providing the best muscle for a customer’s money.

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