POWER GENERATION

Kohler Power president talks about

Liebherr, Clarke Energy, what’s ahead

for the global generator and engine

manufacturer. By Mike Brezonick

ne of the key architects of the company’s growth strategy is Tom Cromwell, Opresident of Kohler Power. A vice president at heat transfer specialist Modine Manufacturing before coming to Kohler in 2009, Cromwell served as president of gasoline and then global engine business before assuming leadership of the company’s development standpoint specific to overall engine and power generation segments in 2009. Diesel Progress recently talked G-drive engines. If you think about with Cromwell in his office in Kohler, Wis. most generator applications, it uses an engine that was developed for something In 2016, Kohler partnered these units. They’ve continued to add else and at some point, the engine is with Liebherr on a new range more and more capacity into both the retrofitted to be an acceptable generator of generator drive engines Bulle and Colmar facilities to support engine? and then launched the KD our growth. Everything that has been launched by series generator sets based They’ve done the engine development Liebherr so far for these large platform on those engines. Where work on the mining and construction engines has been for generators. might that relationship go in application for those engines and We changed where the turbos are the future? we’ve helped them from an engine configured and a lot about the base Liebherr’s capability, from a development standpoint, has been outstanding. They have strong “With the KD series, capabilities; strong technical capabilities and they’ve invested a lot Kohler owns every into the partnership. They’ve built a brand new facility in Colmar, , for bit of the technology

(on the gen-set),

EDITOR’S NOTE: every bit of the KOHLER POWER, a division of the multibillion dollar, privately-owned Kohler Co., has service and, and so made a number of significant moves in the industry over the last several years it’s opened up a lot – a global partnership with Swiss engine manufacturer Liebherr, the acquisition of of doors for us.” U.K. power generation specialist Clarke Energy among the highlights – yet has managed to do it all rather quietly. TOM CROMWELL, president of Kohler Power

30 | DIESEL PROGRESS | NOVEMBER 2018

DP 11-2018 Kohler Cromwell Q&A_v2 JG_MO_CE.indd 30 25/10/2018 16:21:33 POWER GENERATION

In 2016, Kohler partnered with Liebherr on a new range of a little more aggressively and somewhat generator drive engines and then launched the KD series collectively. We’re looking at some areas generator sets based on those engines. where maybe historically Kohler hasn’t With the KD series the range is everything been as strong – mining for instance – from a 700 kW unit up through eventually and we’re talking about how could we 4 MW at the top end of the range. use the Liebherr partnership in certain spaces like that? Then in general how could we expand the range? Right now the partnership starts at 700 kW – could we go down lower than that from a power range standpoint? Could we expand into other product categories with them? We’re looking at a lot of different options, but I would just say based on the success we’ve had to date, we definitely want to continue to expand that relationship.

As the engines built for you by Liebherr are branded Kohler, since Liebherr does not have a significant engine presence in North America and since engine configuration to make it a strong development, Kohler has a growing engine generator engine. Liebherr’s willingness installation, but then if program itself, has there to invest from a capital standpoint there was a problem in the generator been any thought to having and from a development standpoint, specific to the engine, we had to pull those engines become part exceeded even what we anticipated going in the engine partner at that point. of the Kohler Industrial into the partnership. For some bigger customers that always Engine portfolio? With the KD series and where we’ve created a level of concern. With the At the end of the day, we know our gone from a generator standpoint, the KD series, that’s gone away completely. focus is going to be on the generator side range is everything from a 700 kW unit Kohler owns every bit of the technology, and their focus is going to be in selling up through 4 MW at the top end of the every bit of the service and, and so it’s engines and using them in their own range. Right now we’re capped at 3.3 opened up a lot of doors for us. equipment. So at this point, we haven’t MW, but we’ll start doing a lot of the The other thing that’s happened explored beyond that too deeply, nor do prototype work in 2019 and then in is Liebherr has given us a lead time I necessarily think we will. It’s a fair gap 2020 will be in full production with the advantage in the market, as all of their from our current KDI range at 135 to 4 MW unit. current large platform production is 150 hp to starting to sell 700 to 800 hp We’ve been extremely pleased with focused on Kohler. With a lot of the engines. the overall success of the KD series other engine generator companies, as Related to that, we have been very and where we’ve been able to sell the mining and construction and other clear that in our generator ranges as generators. We’ve had much, much markets have picked up along with the a company, we want to have Kohler- more success in data centers and impact of Stage 5, they’ve been really branded engines from the 10 kW other mission critical markets than stretched from a capacity standpoint. solutions up through the 4 MW we’ve had historically. Those types of As to our future with Liebherr, I solutions. If you think about our range customers want door-to-door service, was in Europe recently and met with today, we’ve got the KDI engines that where from the time you start the Gebhard Schwarz (managing director of power everything up through 70 kW, specification work through long-term Liebherr Component Technologies) and and then in the middle of our range service agreements, they want one party we talked about what are the next steps we’re using primarily John Deere and that’s in control and providing the for us from a partnership standpoint. a few other solutions depending on the complete package. Historically we could We’re looking at additional geographies region and emissions levels. And then at do all the specifications, the generator – maybe going after certain territories 700 kW and above is all Kohler through >

NOVEMBER 2018 | DIESEL PROGRESS | 31

DP 11-2018 Kohler Cromwell Q&A_v2 JG_MO_CE.indd 31 25/10/2018 11:35:51 9 kW to 74 kW – Diesel

You know Tier 4 compliance is on the horizon. Our new engines get www.mitsubishi-engine.com you there, with the features you demand. Fully electronic controlled. High performance at any altitude. And a robust design for maximum Now offering Engines longevity. There’s no reason to worry about tomorrow...when Mitsubishi 380 kW – 5.5 MW technology is here today. Learn more about your future power solution. Contact: [email protected]

Mitsubishi_OURDPNA November ENGINES.indd Issue.indd 12 1 10/24/20187/17/18 11:04:42 3:33 PMAM POWER GENERATION

Early last year, Kohler acquired Clarke Energy in the UK, one of the biggest distributors of GE gas engines. Kohler feels that large gaseous generators is a market that is going to continue to grow strongly. Plus it adds more prime and continuous applications to its portfolio.

continuous basis. We see that as an attractive market space. We were very interested in those lines. We spent a lot of time going through the process and ultimately, we just decided that we didn’t think we could get the kind of return out of that business that we really wanted.

the Liebherr partnership. We’ve been ambition to expand your Early last year, Kohler very clear that we want that entire range gaseous-fueled engine acquired Clarke Energy in to get to Kohler-branded engines, so we options? the UK, which is one of the can control that service experience and We definitely were very interested in biggest distributors of GE’s make sure the customers are taken care the -Waukesha business. We recip gas engines and has of by Kohler personnel. do see the gaseous fuel generator market operations in something like continuing to expand. If you think about 25 countries, many in the Kohler was among the renewable solutions where you’re going less developed regions of the companies interested in to start using solar and wind and battery world. What was the thinking acquiring GE’s Waukesha technology, you’re still going to have behind making Clarke Energy Engine and Jenbacher days where the wind doesn’t blow, or the a Kohler company? engine businesses. Was sun doesn’t shine. There are still going to We felt like large gaseous generators was that interest reflective of an be periods of time where there’s a need a market that was going to continue to interest in those companies for a true power generation infrastructure be an attractive space. It was going to specifically or more of an that you can run more on a prime and continue to grow faster. Our base diesel >

DO YOU HEAR THAT? NEITHER DO WE!

Robinson specializes in critical sound reduction A Division of Robinson Metal, Inc. packages for diesel and natural gas gen sets. Call us 1740 Eisenhower Rd, De Pere, WI 54115 today to learn more about our single source solutions. robinsonenclosures.com | 920-490-3250

DP 11-2018 Kohler Cromwell Q&A_v2 JG_MO_CE.indd 33 25/10/2018 11:36:01 DPNA November Issue.indd 13 10/24/2018 11:05:01 AM POWEROG GENERATION O

power generation business is primarilyrily a standby/emergency backup business.ess. We look at gaseous fuel systems andd see more prime and continuous where thetthe generators are running a lot of hours,rss, in many cases, 8000-plus hours per year. We know there’s a very attractive parts and service side to anyanny prime or continuous business and Clarke Energy does that extremely well. They’ve built their model around being very strong from a parts and service standpoint, taking care of customers first and then selling hardware as a part of their total solution. We’ve been extremely pleased with the Clarke acquisition. It’s a great leadership team with reallyally KohlerKohKhK ller hhahass bbeeneen veveryry clear that it wants its entire rarangenge ooff deep knowledge in that industry. They gen-sets to have Kohler-branded engines, so it can control the are also a very strong EPC (engineering, service experience and make sure the customers are taken care procurement and construction) firm. A of by Kohler personnel. lot of the solutions they put in place are really complex – they do a lot of things like bigger mining sites in , of an annuity-type business where they have been fully launched where they’re starting with a bare piece sell the hardware upfront but then they to the market. How is of ground doing all of the site work, get a lot of parts and service down the the investment in the KDI putting in the generators, getting them road and do that very, very well. product line paying off and commissioned and turning the keys are you where you thought over to the new owner once it’s fully Looking again at engines, you’d be in terms of sales? commissioned. Then they may stay on there was a significant When we started the development of the and operate it for the new owners and investment in developing the KDI engines, we didn’t anticipate Stage they will typically sign a long-term parts KDI engines and as of last 5. That additional regulation brought and service agreement as well. It’s a bit year, all of the displacements with it another round of development >

HYBRID TRANSMISSION Standard SAE J617 - 620 Electrical power from 8 to 300 kW industrial & marine Overall dimensions 300 to 800 mm 3 navigation modes Diesel engines from 50 to 1100 kW Parallel hybrid technology and installation

ELECTRIC PROPULSION SYSTEM From 20 to 100 kW with single, two and three speed transmission. TRANSFLUID LLC Auburn, GA 30011 Ph. +1 770 822 1777• Fax +1 770 822 1774 [email protected] • www.transfluid.us

DP 11-2018 Kohler Cromwell Q&A_v2 JG_MO_CE.indd 35 25/10/2018 11:36:09 POWER GENERATION

activity and expense. But the team has share in China when the new regulations the range, take some of the models out as come up with a fantastic solution that’s are implemented. we transition to Stage 5. But we recognize going to again give us a good competitive there are still certain applications, like edge in Stage 5. Kohler is one of only a select agricultural applications, where those We’re just continuing to build the few engine manufacturers engines serve the purpose very, very well. business every year, more than double- that still manufactures So our intention going forward is we will digit growth rates. We track our growth single-cylinder, air-cooled support air-cooled engines but a smaller rates versus our key competitors in diesels, along with some family than what we have today with less that space and we’ve been consistently air-cooled twins and at least power nodes. outgrowing our competitors. So very one air-cooled three-cylinder. pleased with the success of those engines. With Stage 5 looming, are You came to Kohler in 2009 I think the other interesting you going to invest to make and have been president of opportunity with the KDI right now is all those engines compliant Kohler Power since 2014. the pending changes to tighten emission and what’s the longer-term What’s it like being one of regulations in China. I think that’s going outlook for air-cooled diesels the most senior executives to give foreign engine manufacturers a in general? at what’s still a family-owned bigger chance at the China market and We will continue to invest in our air- business? I think that will play out over the next cooled engines, but right now we support Kohler has been a great company for three to four years. We believe our KDI significantly more families than we will in me. It’s different from a publicly-traded engines are very well positioned to take a Stage 5 environment. So we will narrow company in a couple of ways. I get to sit in front of Herb and David Kohler and present business cases, talk about the strategy of the business and get a very clear, “yes, I agree and go ahead and execute that strategy,” or “no, I disagree, we need to think about this some more.” Being able to sit in front of a family member, tell them what you want to do and why you think it’s a good strategy and getting a very clear yes or no, is a big advantage. The second big factor is the family tends to be very long-term investors. They not only want a return over the next one to five years, but they want to understand, what is the strategy to win over a 5-, 10- and even 20-year horizon? The investment with Liebherr and that joint partnership, that was two privately held family companies with two owners looking each other in the face and talking about what did this mean and why do we want to do this together? Both partners made 20-year plus commitments to each other and that’s really hard to do in a public company environment. Another point I would add is Herb and David (Executive Chairman Herbert V. Kohler and President and CEO David Kohler) are tremendous leaders. They could run publicly-traded companies anywhere. I think Kohler is gifted in having that strength of leadership. ■

36 | DIESEL PROGRESS | NOVEMBER 2018

DP 11-2018 Kohler Cromwell Q&A_v2 JG_MO_CE.indd 36 25/10/2018 11:36:20