Buying the Demag crane business from Terex, and consolidating German production (2019)

It bought the products; it did not buy the company’s shape

There is no telling how many years it would take to design a 1,000-tonne-class all-terrain crane from scratch and build a European customer and service network unaided. A company that had defined itself as LE in 2008 had no escape into an adjacent field either. Choosing acquisition as the means of holding products it did not hold was, in itself, a continuation of the policy President Tadano Koichi had stated publicly in 2017. If there was a miscalculation, it appears to lie in this: what $216.5M (¥24bn) bought was not only a product line but two organizations carrying surplus headcount and pension liabilities.

What actually followed was a sequence of retreats — putting the acquired business into legal restructuring the year after buying it, erasing the brand, closing a plant, moving small-machine production back to Japan. European operating losses ran for seven straight periods and reached ¥13.8bn in the year to December 2023. That Faun, bought in 1990, and Demag, bought in 2019, had once competed against each other inside Germany was an early warning of how hard it would be to make one thing out of two. The hole in the product range was filled within a few years; the work of turning purchased companies into a single company took far longer than that.