The Wacker Neuson Group will add 200 employees and invest over $10 million in its Menomonee Falls plant as a result of expanding its business relationship with John Deere for manufacturing excavators.
The companies announced their agreement in June but not the details of the impact on Wacker Neuson’s American headquarters in Menomonee Falls. Gert Reichetseder, who is Wacker Neuson's president and CEO for the Americas, discussed the company’s plans in an interview with the Milwaukee Business Journal.
“It’s a once-in-a-lifetime opportunity for us where we wanted to grow faster," Reichetseder said. "We think this is a win-win for employees to be something bigger with a big partner.”
The two companies will collaborate on developing excavators, including battery electric products to be manufactured by Wacker Neuson. Reichetseder said engineering work and installing new equipment in the Menomonee Falls plant will require two to three years before production starts.
The agreement is between Wacker Neuson, which is based in Munich, Germany, and John Deere Construction & Forestry Co., a subsidiary of Deere & Co. (NYSE: DE) of Moline, Illinois.
The two companies have collaborated on manufacturing Deere-branded excavators in China and Austria for the Asia-Pacific market, but those products have different designs than those in the new agreement, Reichetseder said.
Wacker Neuson previously manufactured small-size excavators for Caterpillar Inc. at the Wacker Neuson plant in Linz, Austria, he said.
“Alliances are nothing unusual for us,” Reichetseder said.
Wacker Neuson will design and manufacture mini and compact excavators weighing less than 5 metric tons in Menomonee Falls and in Linz. The excavators will be distributed under the John Deere brand via John Deere’s global dealer network.
A spokesman for John Deere said Thursday the company had no comment for now.
The Menomonee Falls plant will not be expanded, Reichetseder said. Rather, the $10 million investment will go for reconfiguring assembly lines to accommodate the Deere-branded products and restarting a powder-coating facility in the plant that has been idle in recent years, he said.
The Menomonee Falls complex at N92 W15000 Anthony Avenue has nearly 540,000 square feet of floor space.
Wacker Neuson also will need another 100,000 square feet or more for additional warehouse space, Reichetseder said. The facility will house components that will be used in assembling the Deere excavators, he said.
Reichetseder said it’s likely that Wacker Neuson will rent the warehouse space rather than investing in buying or building a facility.
The company already has a logistics facility in Germantown for its existing business.
Wacker Neuson is planning to double its production workforce from the current 200 once production starts on the Deere excavators, Reichetseder said. He acknowledged that recruiting will be a challenge, assuming the current hiring environment continues.
“It’s a big increase; it’s a positive thing,” he said. “It’s not an easy one these days, but I think we appeal to the workforce.”
Starting pay is over $20 an hour plus benefits, Reichetseder said. Employees in the plant are represented by the United Steelworkers union.
Wacker Neuson already is in a hiring mode as it endeavors to keep pace with demand for the existing product line in Menomonee Falls, Reichetseder said.
Products the company already manufactures in Menomonee Falls include: skid steers, compact track loaders, utility track loaders, compaction rollers, generators, light towers, heaters and mobile generators.
Wacker Neuson was created by the 2007 merger of Wacker Construction with Neuson Kramer Baumaschinen, also of Germany. Wacker Construction opened a U.S. headquarters in Hartford in 1957 and moved to Menomonee Falls in 1986.
The company has updated and expanded the Menomonee Falls complex several times since 1986 — most recently in 2012.