The marriage of two financially strong lift truck companies, one with top-notch designs and the other with the best distribution system in the world, has resulted in a production growth of over 100 percent in just seven years. Gene Newman reports on how Mitsubishi Caterpillar Forklift America Inc. has succeeded in its joint-venture endeavors.
Following a reorganization in the early 1990s, Caterpillar Inc., the world’s largest manufacturer of earth-moving and mining equipment, decided to develop a lift truck joint venture with Mitsubishi Heavy Industries Ltd., part of the enormous Mitsubishi Group in Japan.
Caterpillar had entered the lift truck business in 1966 with the acquisition of the Towmotor Corporation. After some difficult years in the 1980s, the company shifted its lift truck manufacturing operation to Korea and England and closed its Mentor, Ohio, plant, which once employed 2,750 people. In 1992, with an annual production rate of 10,000 units, Caterpillar teamed with Mitsubishi, which had entered the North American lift truck market in 1982. Mitsubishi had begun manufacturing in Houston in 1988 and was shipping approximately 4,000 units from Houston and Japan.
The two companies already had been reaping the benefits of a joint-venture operation in Japan, called Shin Caterpillar Mitsubishi, which had thrived for 26 years producing excavators and small loaders. As one company spokesperson has said about the 1992 agreement, “The marriage was a natural.”
A Merger of Strengths
The 1992 joint venture has also been called “a merger of strengths.” Caterpillar Lift Trucks had a strong distribution group, but little manufacturing presence in the United States. Mitsubishi Forklift Trucks had an excellent plant in Houston and had created outstanding designs, but had yet to develop a sizable distribution network.
The result of the agreement, Mitsubishi Caterpillar Forklift America Inc. (MCFA), is a private company with consolidated headquarters in Houston and with ownership divided between Mitsubishi Heavy Industries (70 percent), Caterpillar (20 percent) and Mitsubishi Corporation (10 percent). Yoichiro Okazaki presides over the joint-venture organization in Houston.
Manufacturing for the Western Hemisphere is mainly in the Houston plant on a 35-acre site with 565,651 square feet of production, technical and administrative areas and 900 employees.
In 1998, the Houston facility achieved ISO 9001 quality systems certification. Units for the European, African and Middle Eastern markets are manufactured in Almere, The Netherlands. Asian and Oceania customers are served by a production facility in Sagamihara, Japan. The Almere and Sagamihara plants are certified for ISO 9002 and ISO 9001 respectively. There also is a joint venture with the Raymond Corporation in New York to build narrow aisle devices such as order pickers, reach trucks and walkies that are rated for up to 8,000 pounds capacity.
In its first five years of existence, MCFA doubled its research and development budget and launched a completely new narrow-aisle product line. With its leading-edge dealer network and engineering and design groups, MCFA has raised its annual production rate since 1992 from 14,000 to 30,000 units and reached $1 billion in sales. The joint venture has shipped 80,000 units to customers in the United States, Canada, Mexico and South America. This solid performance has made MCFA one of the top three leaders with Hyster/Yale and Nissan in a booming industry that sold more than 180,000 lift trucks in 1998.
Designs for the Future
MCFA is striving to maintain or improve its market position through innovative designs in all of the five model classes of internal combustion and electric lift trucks. In the last two years, it has redesigned 90 percent of its units and added seven new models to a product line that already exceeds 75.
Typical of the advances are those in the Caterpillar Lift Truck line where designers have redefined the family of 3,000- to 6,000-pound capacity cushion tire lift trucks with a focus on operator comfort and ergonomics. The redesigned GC15K-GC30K models have been given operator-friendly features that include: a low, open-step and an easy-to-locate grab bar for convenient entry and exit; an integrated cowl cover to reduce the risk of wires or hoses drifting into the operator’s compartment; a seat cushion with improved thigh and lum- bar support; an arm support for use during reverse operation; and an advanced mast design with square fork bars for better visibility. Easier access into the engine compartment has been achieved with a new fold-down seat, a gas-spring-assisted engine hood and an easily removable floor plate. Vibration has been reduced with specially designed rubber engine mounts and with critical components rubber-mounted to the frame.
The Industry’s Strongest Dealer Network
MCFA distributes its products through 167 dealers at more than 400 locations throughout North and Latin America. Twenty-two of these distribute both brands, Mitsubishi forklift trucks and Caterpillar lift trucks. The majority are financially strong and have represented the brand names for years. Several have been in business for over a half-century.
To improve product availability, the Inventory Pool Program has been created with dealers in the United States and Canada, combining their inventories in a warehouse in Houston. This program makes more than 2,000 lift trucks available to any participating dealer. A unit that meets customer specifications can be shipped anywhere in the country within 24 hours. In addition, rental and leased lift trucks are available from dealers for customers with special or seasonal projects that call for extra material handling equipment on a short- or long-term basis.
An operator safety training program can be arranged through dealers. Designed to comply with Federal OSHA training regulations for powered industrial trucks, the seven-part course addresses key safety issues including lift truck fundamentals, pre-operational inspections, operating and load-handling techniques, fueling and battery-charging. “Train-the-Trainer” courses are available for companies that want to establish in-house programs.
Repairs provided by dealers are backed by a free loaner service guarantee that ensures that a lift truck will be repaired correctly the first time and within the time quoted, or a free loaner of comparable capacity will be provided until the job is completed.
Parts Fast Or Parts Free
Customers in the United States and Canada are guaranteed next-business-day delivery of all parts listed in MCFA parts books, or the parts and freight are free. Parts for original equipment products are distributed by the Caterpillar Logistics Services in Indianapolis, Ind. where there is a 300,000-square foot distribution center. Other parts depots are in Ontario, Calif.; York, Pa.; The Netherlands; and Singapore.
An affiliated company, Rapidparts Inc., in Grand Rapids, Mich., specializes in the distribution of service parts for other brands of material handling equipment. The parts are distributed under the PROMATCH® and MASTERSOURCE® brand names. Using Rapid-parts sourcing, MCFA dealers can service all the fork-lift users in their territories, regardless of make or model. PROMATCH parts are backed by one of the strongest guarantees in the lift truck aftermarket, with a six-month/no-hour limitation.
Promatch Online (www. promatchonline.com) is an Internet information and e-commerce site that offers free online part number look-ups for most lift truck models of all makes. The Web site also affords the opportunity to purchase replacement lift truck parts and accessories online, or to create an order form to send to a local dealer. Included are detailed product information and pictures, links to industry-related sites and a help desk.
The MCFA Fleet Manage-ment Group has experts who can analyze a customer’s lift truck fleet to improve utilization and longevity and reduce maintenance costs. Exclusive Fleet Data Tracking and Reporting software can determine the efficiency level of equipment use and the hourly operation costs and advise on savings potential. The group can also provide auditors to study a customer’s fork lift operation and recommend cost-saving improvements, as well as formulate a plan to continue to lower material handling expenses and maximize efficiency.
For a long-term solution, the group can take control of a company’s materials handling equipment by purchasing its lift truck fleet, regardless of size, and leasing it back to the customer while the group takes responsibility for equip-ment service.
Customers who choose one of the Fleet Manage-ment services will be guaranteed specific annual savings that will result from lower ownership costs, a reduction of the equipment population size, more efficient maintenance, reduced management hours and fewer purchase orders and invoices.
Other support programs offered are the Planned Main-tenance program, with periodic service to a customer’s fleet; and the Total Maintenance and Repair program, with MCFA taking full responsibility for fleet maintenance. Financial services are available to those buying one lift truck or an entire fleet. Options include flexibility in terms and down payment, equity financing and a variety of payment schedules as well as leasing alternatives.