The Dig

Johnnie Martinez   0:04
 On today's episode of the Dig, I am joined by Declan North of Tarrick Financial Services and I will let him introduce himself and go deeper into his background.

 North, Declan   0:13
 Johnny, thanks very much.
 Obviously Declan North and Global Director of Trade and financial Services for tariffs financial services, looking after the Materials processing Division materials processing is one of the two segments or one of the three segments of the Terex Corp, which is quite a diverse segment.
 I have been with financial services.
 Now I'm heading into the 10th year, so only feels like yesterday when I joined.
 I'm an Irishman from the accent, I'm sure you can detect, but based in the UK and I covered a globe from my little office here in Chinar in Oxford.
 So delighted to be on and look forward to this podcast.
Johnnie Martinez   1:03
 Fantastic. Well, it's great to have you.
 I'm glad we were able to get connected and.
 You know, I think it's important to talk about everything you guys are doing, especially, you know you look at it from a a global scale, this industry is changing so much all the time.
 You know the individual lending segments and then the wider lending space from where you sit in the role you have, you know what makes kind of your job at Terex Financial Services unique and what makes the the division you cover so so unique in the space?
North, Declan   1:34
 Oh, that's that's that's really the $6 million question.
 I'll tell you why I love the job I it is the uniqueness of it.
 So Terrib financial services, we are the captive arm, but we don't operate on books.
 So we operate with a number of funding partners.
 What makes my role really unique is that when I say it's a global role, most people show that global role into their title.
 But this is truly a global role. So.
 Material processing cell or have dealers or provide facilities?
 I have an involvement in it and that's from the start right through to the finish. So it's a really integrated job. I get to see different cultures.
 So last year I was in Australia, I was in India, I was in Dubai.
 You don't know where you're going to find yourself, which means that you're not just restricted.
 To one area or one segment or one territory.
 You've gotta get a broader understanding of the different cultural and we may talk the same language, but there's different variances and cultural differences as you go from country to country, region to region.
 So you know, that's what makes it quite unique.
 What makes Turks material processing unique is we're made-up of about 2627 different business units, each one of them has a different requirement.
 It's quite a diverse portfolio of businesses and that's what makes it really interesting.
 So you get to see.
 You know.
 Concrete mixer truck. You get to see a volumetric mixer truck. You get to see a shredder, you get to see Crane, you get to see material handler. You get to see a crusher or a power screen or Finley crushing screen.
 And so it's really quite diverse.
 Eve equip screeners no two days are the same and no, no. Same.
 No two hours are the same, let alone 2 days of the same.
 So that's what makes it really exciting.
 And we work with a great crew.
 You know, our guys are really, really professional.
 They're they're long term employees that have a really passionate feel about the business and I suppose we're the same, whether it's the financial services, whether it's the equipment side, you really are ingrained in the business and kind of passionate about it.
Johnnie Martinez   4:07
 That's you OK11 other question. I was gonna wanna ask, and I was gonna have this at the end, but I'll. I'll go ahead and do it here because of what you're just talking about.
 You know, I've had the luxury of talking with a lot of people who operate in this industry, especially at the the United States domestic level.
 Or, you know, they'll do some international stuff with Canada or Mexico with you operating on this global level, right?
 What advice would you give to someone who's kind of stepping into that?
 Level of equipment finance and starting to operate in that world as far as you know a global.
 Level of transactions and interacting with people all around the world versus maybe just Aus or just auk. Just a domestic transactions.
North, Declan   4:47
 Yeah, yeah, that's a great question.
 And it's quite funny. So to kind of give you a little bit of history, I I moved to the UK 14 years ago.
 So up until then.
 All my working life had been in Ireland.
 Expect that you move to the UK.
 That would be fairly similar to Arlington.
 The similarity was kind of the language.
 You know the products were slightly different.
 The the actual.
 Way people transacted was totally different. So it was the first kind of eye opener. And then as I moved to the UK and I started having a kind of more of an international role, the advice I would give is embrace the local culture and get to know that.
 Local culture before.
 Trying to predetermine what you want to offer, because once again, you know, they may have the same.
 Products, but the delivery of those products or the the local way of dealing is is different, you know Middle East is totally different to India, which is totally different to China, which is totally different states, which is totally different to Europe, you know and that that was one.
 Of the things I think over the last 14 years.
 That is really struck home with me is.
 Understand who you're dealing with and understand the culture, because I think that's that's the first step to actually making it a success, because if you get to know that person or get to know their culture and accept and embrace, it makes a big difference.
 A simple little thing.
 Irish people tend to talk very fast.
 Slow down, you know.
 I mean, I know you're there. You go that you know, if you had to set that to be 14 years ago.
Johnnie Martinez   6:31
 That.
North, Declan   6:35
 Yeah. No, I don't know what you're talking about.
 But yeah, you know it's that would be my my best advice.
 Look at the target market.
 Look at the culture.
 Understand the culture.
 I'll tell you a funny story, but I went and started doing business in India. First I sat in the meeting and the Indian people are fantastic.
 People are absolutely lovely people, but they don't like to say no and you know, I came away thinking, wow, that was really good and really, you know.
 Really easy and when I got back to the UKI started sending my follow up emails, you know, kind of this what we're going to go. Oh, no, we can't really do that.
 And I was kind of going, you should have told me that when I was down there, but my local guys were kind of gone.
 They didn't want to offend you and then kind of go well. You know, I'm usually. I'm not usually offended so.
 Prefer to talk direct, but that was an eye opener for me.
 You know, 'cause, I came away thinking I had agreed something, but I agreed nothing and I had to go back and start all over again, you know.
 So that was that was a really big learning experience, but I've enjoyed every minute of it.
Johnnie Martinez   7:45
 Let's no that makes it a ton of sense, and I know just in the areas that I've been able to operate in that yeah, every every culture's different and even regional cultures can be different.
 So you gotta you gotta always account for that. And I I think if your insight on that kind of getting into the the actual marketplace right from from where you're sitting from what you've seen, you know I have the ability to have that that global perspective and that.
 That each regional local perspective.
 What are some of the key trends that are shaping the the equipment finance market and especially with the materials processing market?
North, Declan   8:18
 Well, from the point of view of the financial services, the key trends have been obviously dealers right sizing their fleets and they're stuck in their inventory. We've worked, really.
 Long and hard with our dealers to get them into the situation whereby they have the right machines and the right mix of machines obviously coming out of COVID and shipping prices and logistics prices etcetera, etcetera, dealers have built up inventory.
 So you had a situation whereby.
 Maybe had the wrong mix of equipment, didn't in situ, or they'd ordered machines expecting it to be, you know, did order machines expecting the boom to continue, whereas when it's slowed down?
 To have a situation whereby they're left with an overabundance of machines. Now everybody was panicking and kind of gone.
 The market slowed and it's this the market hadn't really slowed. If you think about it, what the market was doing was just getting itself back.
 To the right size so you know I think a lot of people were panicking and a lot of finance houses were panicking etcetera because you're kind of looking at dealers with high inventories and you then haven't explained to them finances.
Johnnie Martinez   9:24
 A minute.
North, Declan   9:36
 Look, we're working with them, which is what we've done.
 We've worked in putting together a retail programs.
 That's helped the dealer.
 The other trend that we've seen is dealers moving in America.
 Dealer rental fleets are really popular and have always been part of the staple diet of of our business.
 But we've started seeing that in the rest of the world that that starts to occur as well.
 So dealers are starting to invest in rental fees because customers are kind of going high interest rates don't see the real value.
 But they need the machine now.
 That's an opportunity for itself and we develop these rental purchase options and so that there's Ways and Means of dealing with it, but you know, you start seeing these little trends start to develop and you start moving your mindset and how you kind of going to service your.
 Dealer or help your dealer help the dealer grow and moving into different areas so that that's all part of what we do, what we provide as a service.
Johnnie Martinez   10:34
 Got you know that that makes sense. And I know we've already heard about it quite a bit as a 2025's gotten started, the this dealer rental movement and you know you guys, this financial services have a a role to play in that and So what?
 If we watching how that shifts and see if that storyline persists throughout the year.
North, Declan   10:48
 Yeah.
 Yeah, I I mean it's it's funny.
 My my own.
 This is one of the things is I actually had experience with the cat rental store.
 So my my my first asset finance experience was working with CAT finance and then I moved working with the cat dealer in Ireland and then I was heading up their retail sales or the cat rental store.
 I've quite a diverse. If you had about two hours, I can tell you the full story.
 But that gives me an insight into.
 How you manage it, rental feed and develop a rental fee which is invaluable when it comes to sit with a dealer because the one thing you don't want to do is a dealer to invest in equipment.
 That's the wrong mix.
 And he's not going to get a higher or that they're just going to put out on a time utilization as opposed to a rake utilization.
 So there's all those little variances that come in.
 And you're right that they are. Marathon dealers are brilliant at that.
 They're they're possibly the benchmark that would have as a rental.
 Operation and they know their markets and I think that's key as well. When it comes to rental is actually knowing your customer, knowing your market and knowing the push and pull tactics of it.
Johnnie Martinez   12:08
 That was one of the other things I was gonna talk about. You already sort of got into it, right? Is how the customer has this sort of changed and how customers have approached financing and obviously right part of that is rental. But what what else have you seen?
 As far as customer shifts, especially as we're looking at sort of the post global pandemic landscape.
North, Declan   12:26
 Yeah, it's it's quite interesting because you you come up with all different types of schemes and opportunities and offers, etcetera.
 But and I'm going to talk to USA initially.
 USA is the conventional is the red market. The high interest rates was deterrent in a customer making a decision.
 Because I can justify the price increase on a machine.
 Deal Power electrics, improvement in production capabilities.
 But when it comes to the buying element of it, the one thing you can justify is if a guy was paying, you know, 2% interest four years ago and he comes to replace it and he's paying 7% interest, that 5% is a big, big G.
 For him to kind of overcome, because what he's looking at that saying, what do I get for that 5%?
 Doesn't get anything.
 That's just an an extra cost.
 So the habit of the customer has been to possibly go back to that rental model, rent the machine a bit longer up until the point where he then needs to make that commitment and that's where we would come in as financial services is, how do you get the?
 Customer into the machine at a cost effective way so you can develop a program or a scheme to help get the customer into that machine, which is what we've been doing.
 I would say.
 This last 12 months.
 Will that continue?
 Possibly not, because as the machines and the market starts to right size itself and you start to see the interest rates, I mean the US is a bit of a a flux as is the rest of the world at the moment because interest rates we were expecting to.
 See them drop further than they have, but they still seem to be remaining constant, and that in some cases we've had a spike now.
 You we're kind of watching that because I would expect as the market regularizes socially interest rates.
 And you should start seeing that drop, which makes it back more into a standard operating market again.
 So they're all the little things that you've kind of seen that the buying habits of a of a customer and the dealer and how the dealer interacts with the customer.
 The interesting thing will be I think.
 As 2024 results start seeping through into 2025 and the finance houses, it'll really start seeing who's really a true asset finance provider or who's a balance sheet lender.
 That's they'll start looking at the, you know, debt equity levels and can they have a repayment capacity sustainable, but the contracts aren't changing.
 Profitability might have changed, but that will come back again.
 So there's a whole there's a whole mix out there, Tony.
 It's that's what makes this this.
 That's what makes this so exciting, and what makes it so enjoyable.
 You know, there's no two days are the same.
 No2 no, two applications are the same.
 It's, you know, it's fun.
Johnnie Martinez   15:31
 Answer No, it definitely sounds always so interesting. Every time I talk with, you know, either side of the the dealer side of the aisle, the London side of the aisle, so much what's happening in the marketplace is so many things going on and it part of it is.
 The people who are finding kind of the most successful ones who are actually having fun with this versus maybe the ones who are always in in panic mode.
North, Declan   15:53
 Look, I I I think.
 You're you're right.
 But then there comes dealing with the experienced dealers and the expect.
 You know, once again I look most of our dealers are dealers for 20-30 years.
 You know, if you think about the last take, the last 30 years, we've been through a global pandemic.
 A world recession.
 Another world recession wars.
 I mean, there's not much we haven't kind of seen or lived through.
 I think I've been through.
 I think about four or five recessions.
 You know.
 It's it's understanding to keep a nerve, which is what we say to people and people have problems.
 Don't. I'm not trivializing. I'm not saying that they don't. Of course, to do everybody has a problem, but it's not the problem.
 It's how you actually react to the problem and how you work with your, your customer or your dealer to make sure that.
 It's resolvable because everything's resolvable if we all stay calm. It's the people that panic, or people that lie or don't fulfill their their obligations. But you know that I think that's what. That's what it comes down to.
 It's having that bit of experience and that's where Turks are possibly quite good is that they have that diverse capability of people in place all over our business.
 Which?
 You know, we've seen it done. It written a book rewriting the book and coming back again to write it again.
 So, you know, yeah. Interesting is the way I.
Johnnie Martinez   17:30
 Fantastic, right?
 There's one other thing I wanna touch on before we kind of have some wrap up style questions. The the utilization of technology in equipment finance, it is ever changing.
 It is all these innovation. Some people are trying to reinvent the reinvention of the wheel, and some people are sort of finding that that balance. And so from from where you sit, where are you guys approaching and how are you guys approaching it?
 What? What advice would you share as far as the technology side of things?
North, Declan   17:57
 I would say.
 That's a very loaded question because we, as I said, don't have a non book capability.
Johnnie Martinez   18:02
 No.
North, Declan   18:05
 So we we are relying on 3rd party funders, right?
Johnnie Martinez   18:06
 Yeah.
North, Declan   18:12
 Technology from the point of view of fast application, fast decision making. If you look at the online tools and the online capability, some funders have a better online capability which make it easier to do business.
 If you don't extrapolate that out into, you know, power by the hour, you know I'm listening to power by the hour for the last 15 years.
 I am still waiting for somebody to actually come up with a methodology.
 That allows us to calculate it effectively.
 Now there's going to be loads of people saying, oh, we can, we can. But when it breaks down, you kind of find they're doing an appeal basis.
 There's no effective way of doing it now. If there is anything out there listening, then they are.
 Please reach out because I'm always interested in learning, but that's my experience is that there's a lot of innovation that we talk about, but which is when it gets down to, it's not really tangible now.
 The flip side of that is telematics.
 Is it an opportunity for funders and banks to work with the end user customers to maximize that sort of offer?
 But I don't think anybody's ever actually knitted it together and come up with a real, tangible solution.
 And I'm going back to my forklift days.
 I mean, you know that when I when I moved over here was with a forklift provider.
 Or manufacturer and you know that was the one of the big things. Can we do this? Parabi? Aaron, it's not feasible.
 Because it's a fixed term contract, isn't it?
 And to be able to do it you have to do everything manually and you have to calculate it manually.
 But I think Telematics has changed. If you can find that system.
 So I am asking the community out there. I'm I'm open to.
 I'm open to somebody picking up the phone and going Declan, we have that solution tailor made ready to go.
 We'll be we'd be more than happy to listen.
Johnnie Martinez   20:04
 Fascinating as someone who's been in the the industry as as long as you have that there's, there's still these core issues that you know have existed for years and they're still here. And it's as soon as someone can figure out the the right recipe. Right. It's suddenly a.
 The Great Leap forward starts again.
North, Declan   20:20
 I.
 I yes, I don't let this face fool you.
 We we always play a game of how old I am.
 I'm actually in this industry for a long time.
Johnnie Martinez   20:31
 Alright. Well, with all that in mind, I just you know some some wrap up style questions.
 You know, you talked about this quite a bit, but as we kind of get into the rest of this year, what are your expectations for the market?
 How you know, can you share about expectations for for obviously for what you guys are are doing?
North, Declan   20:48
 I I think you know globally our expectation is that we are going to continue to work hard with our dealers.
 We're going to continue to get into the situation whereby we have the dealer's fleets right sized.
 We're going to then put the right facilities in place for the dealers to grow their business effectively because I think that that's I keep on saying that it's everybody was panicking. All businesses, businesses possibly just come back to, if you go back to pre pandemic levels of 20.
 19.
 Or possibly where we should be really at.
 So I I'm I'm kind of seeing that that our dealers are really well equipped.
 We have really good dealers.
 Good dealers are the the cornerstone of what we do, I given said.
 America is our benchmark.
 The rest of the world, we have excellent dealers as well.
 Some guys have been with us. You know, the dealer who partly dealer in Ireland is with us over 30 years. You know, he he's forgotten more than I'll ever remember.
 You know, and having dealers like that, but he's still always open to innovation and kind of doing things differently.
 So he developed a rental fee.
 Now somebody had said to me he'll develop a rental fee when I start and he'd be kind of no, because I'm only interested in seven. But it's that kind of ability to change and diversify, I think, which is going to make us stronger and more successful.
 In the market and I think that that's the cornerstone of what we're always looking at is how do we improve, how do we, how do we make what we do better.
 You know, I used this analogy called webel, which is where your worse, equal, better or unique than the competition.
 And we're always kind of applying it, you know.
 The team I have are vastly experienced professionals and always thinking about how do we change things and how do we help the dealer. I might agree with everything, but you know what?
 At least there's good interaction.
 There's good discussions.
Johnnie Martinez   22:47
 That you know that makes a ton of sense.
 Yeah, it's much easier than it is.
 I know when I came into this industry a little preconceived notion of maybe a little more Stone Age than some of the other parts, but the more I interact with people, the equipment industry, there's so many people who want to move forward.
 Even people you think would be traditionalists, they're coming up with these new ideas and trying to push the industry on the dealer and lending side.
North, Declan   23:12
 Yeah.
Johnnie Martinez   23:13
 Alright. And lastly, as we're up with this podcast, is there anything else you think readers of equipment, finance, news or listeners of the The Dig podcast should know about what you guys are doing at at Terex Financial Services or?
 The state of the market as we we go through.
North, Declan   23:32
 Yeah, I I mean, you know what I will say is that we had tariffs, financing services are here to look at helping our dealers and our end user customers grow and develop their businesses because if they're profitable, guess what, tariffs will be profitable.
 And that's the ethos that we have.
 You know it's staying focused on what I would call.
 Is our core values.
 And I think if.
 Have a simple philosophy.
 You treat people the way you want to be treated yourself, and I think we apply that to your business.
 You're not going to go far wrong, and one of the things that we see is that is reciprocated.
 As I said, we've a really good relationship with our dealers.
 We don't always agree. You know, we do have these conversations back and forth where we have a perception and data perception. But I think that that's the common theme that we would have is that.
 We're always here. We, we're support. We are.
 We're support service to the manufacturing team, to the team that.
 Actually sell the equipment, but we're more than the support service.
 We're seen as that commercial entity. We're seen as a as that way of helping the dealer interact and buy more equipment and he does that.
 He sells more equipment, so you know that that's kind of where we would see ourselves for 2025. You know, staying calm, staying steady, supporting the dealers, supporting the end user.
 And making the best deal possible because everybody wants a deal.
 That's what you're looking to do is make the best deal and best proposal possible.
 On the market and that's what we will pride ourselves on.
Johnnie Martinez   25:14
 With all that in mind, fantastic talking with you and learning so about yourself and what you guys are doing in the industry and I appreciate your time today.
North, Declan   25:22
 Now, Jenny, it's been great. As you can tell.
 I do like to talk, so I'm always open.
Johnnie Martinez   25:28
 Thank you.