The dueling “Worlds” of concrete and asphalt have come and gone with subtle signs of John Deere’s integration of Wirtgen after 2017’s surprise $5.2 billion purchase, and Deere’s C&F division has announced that two Deere motor graders will become Deere’s first yellow iron to be distributed in Europe through Wirtgen dealers—but other than adjacent booths at trade shows and a simple banner with both company names (above), information on integration plans has been hard to come by.
Are the integration plans and what they mean for customers as secret as the deal that no one saw coming, or is Deere just taking its time?
Construction Equipment caught up with Wirtgen CEO Domenic Ruccolo to delve for details.
CE: [Deere chairman and CEO] Sam Allen, talking about the integration in a meeting that included Wirtgen personnel, said, “We’re not Volvo.” What did that mean?
Ruccolo: “I think he was speaking specifically of the brand. Volvo, when they had acquired Ingersoll-Rand chose to change the branding to Volvo. In fact, we hear a common question, is the brand going to be John Deere? We have no intentions of doing that with the brands the Wirtgen Group has. They’re very well known in their marketplaces and they’re very strong brands and we intend to keep the brands as they are.”
CE: I saw that graders will be the first yellow iron introduced in Europe—and I know more than that will be shown at Bauma—what might be next and what is the ultimate goal for Deere C&F in Europe?
Ruccolo: “Time will tell. In terms of why are we displaying more than just the motor graders at Bauma from a Deere standpoint, it’s simply that Bauma is absolutely the largest and most important trade show in our industry and the attendees are from well beyond Europe.
“Attendees are from…other places where C&F does business with the full earthmoving line, and from that perspective, it’s really to do that and have a presence with those customers at that show. Relative to motor graders, that is a product that is used extensively in roadbuilding and road maintenance, and those are two areas that are obviously very close to, in fact in the same space, where Wirtgen does business. So we thought that was a good tie-in to start selling those through some of the Wirtgen subsidiaries in Western Europe. There are no other plans at this time.”
CE: What is the long-term plan for both dealer networks in North America… what can customers look forward to that maybe they don’t have or see now?
Ruccolo: “There’s no plan per se. There’s been some movement specifically with the dealerships that were owned by Komatsu America and they’re affiliating themselves with BOMAG, which is fine, and the Deere dealers in those footprints took on the Wirtgen line, so really not much more than that at this stage.”
CE: Will there be a day when we see Deere engines in Wirtgen equipment?
Ruccolo: “That’s a possibility, yes. There are different kinds of opportunities well beyond engines for that matter, with different components, and again, when you have products that enjoy market leadership as Wirtgen does, you really take your time in looking at those opportunities. Over time, we’re going to take a look at a number of different things, not only engines but other components, and make sure that they’re done in a way where we retain the same level of quality, innovation, and performance in the equipment that has existed in the Wirtgen Group since the beginning.”
CE: What is the state of telematics between the two product lines…will there be telematics integration for fleets that include both?
Ruccolo: “In the Americas where we have strong presence from both Wirtgen and the Deere earthmoving products, we shared a lot of customers well before the acquisition. And clearly those customers, I think, would appreciate a telematics solution where they have visibility to their entire fleet from both Deere earthmoving and Wirtgen. So there are some opportunities that exist that we’re going to be working towards that at least the dealers that have both lines can see the equipment and help service it. Wirtgen also has its own telematics system, WITOS, and it’s to continue that service for all customers irrespective of who their dealers are.”
CE: What have you learned so far about integrating the two cultures?
Ruccolo: “Wirtgen has been a very successful company, and has its own very strong culture. There are a lot of things that Deere can learn from Wirtgen and there’s a few things that Wirtgen can learn from Deere. And really Wirtgen is kind of retaining its own culture, which was very close to Deere’s culture, and I think that’s why the two companies have been such a great fit together. The employees and companies share a lot of the same values in terms of the focus on the customer, innovation, quality, and really a drive to be close to customers and to be valued by customers.
“From that standpoint, while the cultures always have their unique characteristics, we have far more in common than not, and I think that’s one of the things even the Wirtgen brothers had recognized, and why ultimately they decided to consummate this transaction with Deere. We’ve always had a great relationship with them, and really a little more than a year into it to this stage, the integration and the acquisition have gone very, very well.”
CE: As far as integration, bringing the two companies together, has there been anything you weren’t expecting?
Ruccolo: “I guess if I wasn’t expecting something, I wasn’t expecting it to go as well as it has. I don’t know if that makes any sense [laughs]. Not that I was expecting a whole lot of issues; I had the opportunity to learn a little bit about Wirtgen over the years, obviously not being competitors but being in the same industry.
“They manufacture great products and they’re very close to their customers, and the comments we had received from customers, we share in terms of their perception of Wirtgen, they’ve always been very positive. From that perspective, the support, the people, it has matched every single one of those comments. The integration hasn’t been a plethora of Deere people coming over to Wirtgen to take the company over. It had unbelievable talent and people. In fact, to this day, there are only a small handful of Deere people that have come over to Wirtgen, including myself.
“I think the fact this is a small industry, customers understand that Wirtgen is now part of Deere, and that’s been well received by customers. I think customers have noticed in terms of the support, the way we’ve gone to market, that little has changed, and what we look for are opportunities where the combination of Wirtgen and Deere can improve how we go to market, the products and what not. But Wirtgen has been a very successful company; we take our time in terms of having that be as well-thought out as possible and not disruptive in any way to customers. That’s the approach we’ve taken to date and that’s the one we’re going to continue to employ.”