Meet Your Chairwoman by Associated Equipment Distributors

February 2018

CED

Construction Equipment Distribution Published by AED: Business Fuel for a More Profitable Dealership

Meet Your Chairwoman

Diane Benck Is An Unintentional Trailblazer n Women in the Workforce Industry is seeing

more female faces

n AED in Canada n The Search Major heavy equipment Employers recruiting recapitalization for Canadaâ&#x20AC;&#x2122;s military

new talent through social media

business services your aed membership provides solutions and options AED’s membership services and benefits are designed to enhance and develop the profitability and continuity of construction equipment dealers by providing tools and resources.

aed legal call counsel AED’s call counsel is a FREE legal hotline for AED members provided by Kopon Airdo, LLC — AED’s general counsel. Take advantage of this member benefit today, call 312-506-4480 or visit www.koponairdo.com.

aed hr help desk AED’s HR Help Desk allows AED members to get answers to simple questions or many employment-related issues free of charge. Call about any HR compliance or procedural issue, even sensitive personnel situations. Contact Karla Dobbeck at Kdobbeck@askhrt.com or (888) 412-8079.

DRIVING DEALERSHIP SUCCESS.

KIMBALL COUNTS ON e-EMPHASYS

“I would say the reduction in time with e-Emphasys in generating ﬁnancials is 70% or greater. Things that used to take two departments several days going back and forth now take, in some cases, 10 to 20 seconds.”

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January 2016

CED

Construction Equipment Distribution Published by AED: Business Fuel for a More Profitable Dealership

Succession Planning Determine how to identify realistic options for the next level of leadership

n Get Social

Top benefits of incorporating social media

CED

n New Member Spotlight

Tejas Equipment and its transformation

n Rebalance Your Business

Examine behavioral assets and liabilities

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$39*

Construction Equipment Distribution Published by AED: Business Fuel for a More Profitable Dealership

invest in your employees Provide your employees with their own beneficial learning tool they can keep all year. Subscribe online at bit.ly/cedsubscribe

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March 2017

* $39 is U.S. AED Member price only / U.S. nonmember price is $79

Construction Equipment Distribution

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Train Like A Pro

Tips and Tools To Become An Effective Trainer n Emerging Leaders Jamie Carsonâ&#x20AC;&#x2122;s

n A Closer Look

EPG Insurance caters

n Content Marketing 2016 is all about

Published by AED: Business Fuel for a More Profitable Dealership

The Road To The Future Is

Paved with Telematics n First-Time Attendees New dealer and

n Specialized Services

n A Closer Look Bobcat knows

contents CED Magazine | February 2018

vol. 84 no. 2

www.cedmag.com

>> FEATURES

Women in the Workforce With Diane Benck taking the helm of AED, itâ&#x20AC;&#x2122;s clear the male-dominated construction equipment industry is finally turning a corner.

AED in Canada With the release of the long-awaited National Defence policy review this past summer, most eyes were on multi-billion-dollar marquee programs â&#x20AC;&#x201C; advanced fighter jets, warships, Arctic defence and the mental health care of soldiers suffering from PTSD.

The Search

On the Cover Diane Benck never set out to be a trailblazer. Yet, here she is. The vice president of general operations at West Side Tractor Sales on the outskirts of Chicago is the first woman to be named chairwoman of Associated Equipment Distributors (AED).

Love it or hate it, social media has become a valuable tool in the search for new technicians. Facebook alone has two billion active users each month, according to a June 2017 report from CNBC news.

February 2018 | Construction Equipment Distribution | www.cedmag.com | 3

contents

CED Magazine | February 2018

>> EDITORIAL

vol. 84 no. 2

>>INSIDE

Editor in Chief SARA SMITH ssmith@aednet.org

17 >> The AED Foundation Donor Profile

Design and Layout KRIS JENSEN-VAN HESTE kjvanheste@gmail.com

18 >> Regional Report

>> WRITERS

20 >> Capitol Corner

Berry Companies grooms future technicians.

South Plains College is on track for AED Foundation accreditation..

Infrastructure investment tops AED’s agenda.

Passage highlights the importance of government engagement.

Bluesky Strategy Group

32 >> AED Member Spotlight

Lindsey Wreggelsworth

R.B. Everett & Co. president celebrates 60 years with company.

Digga North American’s president once worked in public accounting.

Canada’s Falcon Equipment soars on customization..

When it comes to social media, don’t be cool.

Help your customers see value over cost.

Head of Walsh Equipment named one of Pittsburgh’s Smart 50.

Participants report reaping 40 percent of revenue from rentals.

Sentry Insurance offers tips on risk management.

Christine Corelli Christine Corelli and Associates Eric Stiles Sentry Insurance Lauren Kutchaw

Commercial Web Services Daniel B. Fisher AED Megan Mattingly-Arthur Freelance writer Karen Algeo Krizman Freelance writer Frank Manfred Thomas Lunney AED Heidi Bitsoli Freelance writer

>> ADVERTISING Vice President JON CRUTHERS 800-388-0650 ext. 5127 jcruthers@aednet.org Production Manager MARTIN CABRAL 800-388-0650 ext. 5118 mcabral@aednet.org

22 >> Tax Reform

34 >> Journey to the Top

36 >> AED Member Spotlight 37 >> Survey Says

38 >> It’s Not Just About Selling 46 >> Part of the Smart 50 48 >> AED’s Rental Report 56 >> Risk Management

Since 1920 Official Publication of

650 E. Algonquin Road, Suite 305 Schaumburg, IL 60173 630-574-0650 fax 630-457-0132 4 | www.cedmag.com | Construction Equipment Distribution | February 2018

As the official magazine of Associated Equipment Distributors, this publication carries authoritative notices and articles in regard to the activities of the association. In all other respects, the association cannot be responsible for the contents thereof or the opinions of contributors. Copyright © 2018 by Associated Equipment Distributors. Construction Equipment Distribution (ISSN0010-6755) is published monthly as the official journal of Associated Equipment Distributors. Subscription rate – $39 per year for members; $79 per year for nonmembers. Office of publication: 650 E. Algonquin Road, Suite 305, Schaumburg, Ill. 60173 Phone: 630-574-0650. Periodicals postage at Schaumburg, Ill. 60173 and other post offices. Additional entry, Pontiac, Ill. POSTMASTER: Send address changes to Construction Equipment Distribution, 650 E. Algonquin Road, Suite 305, Schaumburg, Ill. 60173.

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Blast From the Past n Good Company

Hvidtved Larsen's Sewer Cleaning Tankers Are Sold Worldwide

CED 0118.indd 1

The Top Five Factors Impacting AED's Canadian Members

n Good Company

Learn More About AED Member e-Emphasys Technologies

12/20/17 11:00 AM

Construction Equipment Distribution

Published by AED: Business Fuel for a More Profitable Dealership

Second batch of technicians certified through new program

Published by AED: Business Fuel for a More Profitable Dealership

ICUEE Show Preview

Rental Connection

Discover how growth and profitability are tied directly to rental

The International Construction & Utility Equipment Exposition opens its doors from Oct.3-5 as the largest ICUEE ever

by attending AED’s Summit in Las Vegas!

n The Right Stuff

n A Closer Look

n Meet Newman Tractor

n A Closer Look

n Closer Look

n Journey To The Top n Chairman’s Club

CED

Shantui hopes slow and steady wins the race in U.S. dozer sales

CED 1217.indd 1

n AED Foundation Certified

Construction Equipment Distribution

Stack the Odds in Your Favor

Largest show since 2009!

n Canadian Concerns n A Closer Look

Construction Equipment Distribution Published by AED: Business Fuel for a More Profitable Dealership

CONDEX Dealer Preview

AED Gears Up To Celebrate 100 Years

September 2017

Published by AED: Business Fuel for a More Profitable Dealership

October 2017

Construction Equipment Distribution

November 2017

January 2018

December 2017

CED CED CED CED CED CED

Six McCann Industries, Inc. technicians earn AED Foundation Certification

Rest easy with Creditsafe USA

A construction equipment dealership with roots in the farming industry

AED Member Pop Art, Inc., helps implement effective mobile sales solutions

AmTrust Speciality Equipment wants to ensure customer loyalty to dealers and manufacturers

Working in the heavy equipment industry is a natural fit for Terramac’s CEO, Mike Crimaldi

Former AED Chairman Michael Quirk Shares His Experiences in the Industry and with AED

n Good Company

FTG Equipment Solutions brings it all to the table

n New AED Member Moore JCB is a new company with an old soul and passion for customer satisfaction

n Journey to the Top Takeuchi’s U.S. president went from sweeping floors to holding the company’s top office

11/27/17 12:03 PM

Construction Equipment Distribution

Published by AED: Business Fuel for a More Profitable Dealership

As the monthly flagship publication of AED, we take pride in covering the industry in a unique and insightful way! CED gives our membership what they want to read: business information, statistics and industry-related news, plus fresh, original content that fuels a more profitable dealership. Over the past year or so, you might have noticed a few changes that began taking place within the magazine, from a color update here and there to a complete revamp of content within each issue. Our goal is to continuously make these improvements to provide a resource that is designed to enhance day-to-day activities within the dealership, and that begins with you, our reader. CED welcomes letters on any subjects that are raised in the magazine. Your opinion and observations matter. If you have a story or topic that you think should be covered in an upcoming issue, we encourage you to send a short summary to CED Editor in Chief Sara Smith at ssmith@aednet.org. Whenever your company appears in CED, a highquality, custom reprint can be purchased as a promotional tool for your sales team. All CED reprints are produced in full color on 100 lb. gloss paper for a sophisticated handout for your customers and prospects. For more information and pricing, please contact Jon Cruthers at jcruthers@aednet.org.

Questions? Comments? Ideas? Send them to

CED Editor in Chief Sara Smith

ssmith@aednet.org or call 630-468-5143

How to Submit to CED Submitting your story to CED is easy! First, it is best if you submit your fullycompleted story for our publishing team to review. You should include any high-resolution photos that are 150 dpi or higher, a brief bio of 1-3 sentences and any necessary contact information. If you are pitching an unwritten story idea, simply submit it as a formal email that includes your story outline, proposed length and direction. Please note that it is the contributor’s responsibility to provide accurate, factual and correct information; this includes spelling of proper names, places, address and foreign spelling, including accents. All submissions should be sent to CED’s Editor in Chief Sara Smith at ssmith@aednet.org.

>> FROM THE PRESIDENT BRIAN P. McGUIRE

New Chairwoman Eager to Work on AED’s Ambitious 2018 Agenda We make it easy for you to let your voice be heard at a time when it is so important to do so.

With a new year comes the introduction of our new AED board members. This year, we are excited to welcome a chairperson who is breaking new ground, not only for our Association, but also for the industry as a whole. We are pleased to welcome Diane Benck as our new chairwoman, the first female chair the Association has had in its 99 years of operation. Diane will work with us to enhance our educational programs, to continue our efforts in Canada, and to make strides in our advocacy and government affairs program in Washington. Last year a number of bills were passed that had great effects on our industry, like the tax bill. It behooves us as an association to continue to focus on the bills making their way through Capitol Hill in 2018. With the possibility of an infrastructure plan being the next focus in D.C., it is important that the industry’s interests are represented. We will be working with Diane and the rest of the board to ensure that we fight hard to get our voice heard in Washington. Another strong focus for 2018 is making enhancements to our efforts with our Canadian members. We are focusing on increasing our membership and network in Canada, while keeping our members informed of the goings-on in Parliament, similar to what we do in Washington. Diane’s insight will help us to continue this initiative. As for educational offerings, we are pleased to provide some new options in 2018. There will be a new sales manager certification on our Dealer Learning Center

site, and we will be hosting a live Sales Manager Seminar in Chicago on November 15 and 16. The Small Dealer Conference, an event that saw success last year, will be offered for a second year in 2018. This month, we will bring Parliament to you at the Ottawa Briefing. There is no better opportunity than this for you to ensure that AED is focused on the issues that matter most to your bottom line. And since we know there is no one better to tell your story than you, we will be hosting Members of Parliament and industry leaders at receptions and panel discussions focusing on transportation, trade, skilled workforce and infrastructure. We look forward to seeing you from February 28 to March 1. We will also be hosting the Washington Fly-In, in partnership with the Equipment Dealers Association (EDA), from March 20 to 22. This is the equipment industry’s premier public policy event. During the first day, we will get you up to speed on how to be an effective advocate for industry issues; you will hear from senior lawmakers, administration officials, and Washington policy experts. Then, as a free service to you, AED will schedule your meetings with lawmakers on Capitol Hill. We make it easy for you to let your voice be heard at a time when it is so important to do so. We are excited to implement these initiatives with Diane Benck at the helm and are eager for another year of opportunities to engage with and provide great services to you, our members.

BRIAN P. McGUIRE is president and CEO of Associated Equipment Distributors. He can be reached at bmcguire@aednet.org. BRIAN P. MCGUIRE AED President & CEO

ROBERT K. HENDERSON AED Executive Vice President & COO

JASON K. BLAKE AED Senior Vice President & CFO

>> OFFICERS

>> AT-LARGE DIRECTORS

>> REGIONAL DIRECTORS

DIANE BENCK Chairwoman West Side Tractor Sales Co.

PAUL FARRELL Modern Group Ltd. GAYLE HUMPHRIES JCB of Georgia STEVE MEADOWS Berry Companies, Inc. JAMES A. NELSON Heavy Machines, Inc. MATT DI IORIO Ditch Witch Mid-States DAN STRACENER Tractor & Equipment Co.

MICHAEL LALONDE West Reg.

MICHAEL D. BRENNAN Vice Chairman Bramco, LLC RON BARLET Senior Vice President Bejac Corporation MICHAEL VAZQUEZ VP Membership MECO MIAMI Inc. DAVID PRIMROSE VP Canada Finning Ltd. JOHN C. KIMBALL VP of Finance Kimball Equipment Company WES STOWERS Past Chairman Stowers Machinery Corporation WHIT PERRYMAN Foundation Chairman Vermeer Texas-Louisiana

Westrax Machinery, Inc. MATTHEW ROLAND Midwest Reg. Roland Machinery Co. JOHN SHEARER Rocky Mountain Reg. 4 Rivers Equipment, LLC KAREN ZAJICK Northeast Reg. Norris Sales Co. DAVID PRIMROSE Western Canada Reg. Finning Ltd. COREY VANDER MOLEN South Central Reg. Vermeer MidSouth, Inc. MIKE PARIC Eastern Canada Reg. Joe Johnson Equipment Inc.

February 2018 | Construction Equipment Distribution | www.cedmag.com | 7

Summit A Success! EDITOR'S DESK

Sara Smith, Editor in Chief CED Magazine ssmith@aednet.org

ED members definitely showed up and showed out at the Summit in Las Vegas, January 15-19. Summit is the starting line for a successful year, and as I sit at my desk reliving all of the great memories and experiences, I’d like to share my favorite moments from the event: Attendees were able to step away from the hustle and bustle of The Strip on Tuesday in true Las Vegas style for the 2nd annual AED Foundation Fundraising Gala. This year’s event was hosted at the estate of Mr. Las Vegas himself, Wayne Newton, who made an appearance at the VIP reception. Drinks were flowing and paddles were flying at the 11th annual live auction, presented by The AED Foundation and Ritchie Bros. In fact, the Gala earned a record breaking $100,000 in donations. These donations will support The AED Foundation’s sponsored Career and Technical Education programs, as well as cutting-edge research on workforce issues. AED and The AED Foundation would like to send a special thank you to those who made this event so special. A great time was certainly had by all. The Gala surely set the bar high for the remainder of the show. Wednesday’s general session opened with two top-notch featured speakers. First, Congresswoman Cheri Bustos virtually joined the conversation via Skype where she made the case on why the business community should take a second look at moderate Democrats. Michael Dominguez, senior vice president and chief sales officer for MGM Resorts, followed with an inspiring conversation on taking your organization to the next level with impactful leadership strategies. During the day on Wednesday, attendees were able to browse through a soldout CONDEX floor, where over 45 first-time exhibitors were present. At night, we opened the doors to CONDEX for the Summit Celebration. This served as a great networking reception, where all registered attendees were able to mingle and explore the latest and greatest products being offered to distributors — and let’s just say The Rat Pack was back! The fun did not stop there. Thursday’s opening session began with a monumental moment as Diane Benck, owner and vice president of general operations of West Side Tractor Sales and RCE Equipment Solutions, was sworn in as the first female chair of the association. She replaces outgoing Chairman Wes Stowers, president of Stowers Machinery in Knoxville, Tennessee. She later delivered a motivating speech before Summit’s keynote presentation. Be sure to check out Diane’s trailblazing story on page 24. Laura Ingraham closed the morning general session where she left the crowd wanting more as she engaged in a powerful discussion about how the current administration has helped jump-start the economy. And since you never know who may make a special appearance at Summit, the event ended with an evening with The Honorable Leon Panetta. Mr. Panetta served as the director of the CIA during from 2009-2011, ran the operation that brought Osama bin Laden to justice, he was an influential political strategist for two U.S. Presidents, former Secretary of State and a congressman for 16 years. When you attend any AED event, one thing is for certain, you will walk away with an enjoyable and entertaining experience that will leave you wanting more. Keep a look out for the March issue of CED that will feature more detailed information on this year’s Summit. We look forward to seeing you in Orlando, February 4-7 at The Orlando World Center Marriott, to kickstart AED’s centennial celebration. Register today at www.aedsummit.com!

8 | www.cedmag.com | Construction Equipment Distribution | February 2018

>> AED INSIDER

Interested in Meeting House Majority Whip Steve Scalise? AED is pleased to announce that the third-ranking member of the U.S. House of Representatives, Majority Whip Steve Scalise (R–La.), is confirmed to participate in a private reception with AED members attending the 2018 AED/EDA Washington FlyIn. Register now for the 2018 AED/EDA Washington Fly-In, which will take place in our nation’s capital on March 20–22. In addition to Whip Scalise, the agenda will feature leading lawmakers and administration officials discussing issues important to construction equipment dealers and manufacturers, including infrastructure, tax, trade and regulatory policies. The 2018 Washington Fly-In is sure to be the best yet, but we need your participation! ADVOCATE. INFORM. IMPACT. You can make a difference!

Capitol Hill Meeting Scheduling Service

Are you interested in meeting your representatives one-on-one? AED members can take advantage of our exclusive scheduling service during their time at the Washington Fly-In. No more wasting time drafting emails and making phone calls. Just email AED’s Vice President of Government Affairs Daniel Fisher that you’d like to take advantage of this free AED member service for your Capitol Hill meetings.

Learn, Discuss and Apply at the 2018 Financial/ HR Symposium AED’s Financial/HR Symposium will provide attendees a unique way to uncork their potential. This event is specifically designed to combine education sessions with discussions between like-minded professionals to give attendees lessons they can bring back and apply to their dealership as soon as they return. Attendees will learn about new ideas, best practices and updates on industry topics like the new tax law, talent management trends, closing deals, collaboration, compensation and much more. Featured finance sessions: ▶ The Art, Secret and Benefits of a Quick Close ▶ Six Tips for Communicating with Non-Financial Staff ▶ The First 100 Days: How the New Tax Law Is Impacting Your Dealership and Customers Featured HR sessions: ▶ Top 10 Management Trends for 2018 ▶ Worksite Wellness: How Healthy Employees Make for Healthy Businesses ▶ Finance for the HR Professional

Annual Campaign Has Launched!

Every day The AED Foundation fights to tackle the technician shortage by expanding community-based, school-to-work school partnership strategies and providing professional education and certification. Through contributions from industry donors like you, we are able to improve the availability and quality of future equipment industry employees. We want to let you know that the 2018 Annual Campaign has officially launched, and our investment incentives have changed! Visit bit.ly/2018aedfcampaign to find out what you can receive and to pledge your donation to The AED Foundation today. If you have any questions, please contact Martin McCormack at mmccormack@aednet.org or 630-468-5113.

AED Welcomes First Female Chairperson in 99 Years Congratulations to our Association’s first female chair, Diane Benck! Diane is the vice president of general operations at West Side Tractor Sales Co. She will serve as the Association’s 99th chairperson, and was appointed to this new position during AED’s 2018 Summit in Las Vegas. We are thrilled to have her on board and excited to see what the future brings! Read all about Diane’s trailblazing story on page 24.

February 2018 | Construction Equipment Distribution | www.cedmag.com | 9

>> INDUSTRY NEWS

The Intermat Innovation Awards 2018 At The Heart Of Technological Challenges In Construction INTERMAT, the international trade show for construction and infrastructure, announced the winners of the INTERMAT Innovation Awards on Thursday, January 18, in Paris (Maison de la Mutualité). In its role as a springboard for worldwide innovation in the building and public works sector, the competition designated 13 prizewinners from the 90 competing entries. International innovation in the spotlight Widely acknowledged as a showcase for the construction sector, the 2018 INTERMAT Innovation Awards offer a stage for the display of innovation in the field of equipment, machinery and processes used in construction and materials production. For its 2018 vintage, the international competition highlighted several powerful market trends such as digitalization of tools (development of applications, BIM and robotics), the proliferation of environmental solutions, and the growing consideration for safety and risk prevention in processes. The judging panel, chaired by Bruno Cavagné, the chairman of the French Public Works Federation, comprised 13 international experts representing user industries of the construction machinery exhibited at INTERMAT 2018: public works, civil engineering, roads, buildings, equipment rental and the concrete industry. The 7th INTERMAT Innovation Award winners Eight prizewinners were rewarded for their innovation in the following four categories, reflecting the new organization of the exhibition into four hubs of expertise:

Earthmoving & Demolition

Equipment And Machinery Award: VOLVO CE – EX2 (prototype of all-electric, zero-carbon-emission excavator offering 10 times higher efficiency and ten times lower noise levels than a conventional version). Components And Accessories Award: DMIC – UBIWAN®SMART (connected management solution for construction machinery and equipment).

Roads, Minerals & Foundation

Equipment And Machinery Award: FAYAT – TRX 100% (a unique-in-the-world highly mobile hot mix asphalt plant capable of reincorporating 100% to 0% of RAP in hot and warm mixes). Components And Accessories Award: RB3D – EXO PUSH (an exoskeleton which assists the raker in manual asphalt leveling operations. This is the first “wearbot” to emerge in the public works field).

Lifting, Handling & Transportation

Equipment And Machinery Award: HINOWA S.p.A. – Lightlift 33.17 Performance IIIS tracked aerial platform (16.5 meter operating outreach, 32.5 meter working height, load capacity of 230 kg, multiple simultaneous movements and a new wider and more comfortable basket). Components And Accessories Award: MANITOU GROUP – Machine stabilization recognition system (the MRT 2470 and MRT 10 | www.cedmag.com | Construction Equipment Distribution | February 2018

3050 use a strain gauge inside the pin of the stabilizer cylinders to obtain information on the force exerted on the ground).

Buildings & Concrete

Equipment And Machinery Award: ALPHI – MaxUpDown (a tool to assist with the handling of MaxiDalle formwork panels. The system, formed by a compressed-air-powered telescopic mast, helps to effortlessly raise and lower MaxiDalle panels at great height from the ground). Components And Accessories Award: 360SMARTCONNECT – Connected concrete (by transforming concrete into an interface with data and services associated with the structure, 360SmartConnect enables each of these stakeholders to create new values for themselves or for their successors).

Special Awards

Five special awards reflecting the most up-to-date issues at stake in the construction sector were also presented: Digital Transition: EFA FRANCE – EVAS (first embedded voice control system with integrated database communicating in CAN BUS interface: multi-speakers, multi-languages, and works offline). Energy Transition: MECALAC – Mecalac e12 (The world’s first compact wheeled excavator running only on electricity, without compromising on battery life, performance and compactness). Start-Up By Eurovia: MATOS – Matos Connect (A paperless solution for operated equipment rental companies in the public works field). World Of Concrete Europe: SIKA FRANCE – 3D concrete printing process (Combining robotic innovation applied to the concrete industry, it produces a concrete item in an original shape or design in a short space of time. The fundamental advantage of 3D concrete printing is its outstanding flexibility). Safety: SIMA – HandSafe woodcutting saw (Beyond the many mandatory safety elements with which this machine must comply, the new SIMA HandSafe features a unique and exclusive safety system to instantaneously stop the blade the second that it touches human skin).

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Your Bottom Line Is Our Top Priority. Solutions you need from bankers who know your business.

Martin Brown | 214.987.8850 | www.bokfinancial.com

>> INDUSTRY NEWS

J.T. Bates Insurance Group Named In Top 50 Fastest Growing Private Companies In Central Ohio At J.T. Bates Insurance Group, a whollyowned division of J. Griffin Ricker & Associates, company growth was supported by a sincere desire to deliver value to clients through new product development and selective hiring practices. Since 2010, J.T. Bates Insurance Group has added ten employees and multiple independent contractors. “With more than 35 years of experience in the equipment dealer industry we became increasingly dissatisfied with the products available to equipment dealers,” said James Ricker, founder and president of J. Griffin Ricker & Associates and J.T. Bates Insurance Group. “To fill the gap, we developed our own products, backed by an A-rated admitted carrier, and hired the staff to execute. We always put our clients’ interests first.” “We started with rental equipment protection (REP) and certificate tracking with our proprietary system, JTraxis. Since then, we’ve expanded REP by removing almost all of the exclusions to make it the best damage waiver product in the industry. JTraxis morphed into StraightDocs, a compliance services product that handles certificates of insurance, claims tracking, tax exemption forms and more,” explained Ricker. Just recently, J. T. Bates Insurance Group was named in the top 20 fastest growing privately owned companies in central Ohio by Columbus Business First. Revenue growth

James G. Ricker, center, founder and president of J. Griffin Ricker & Associates and J.T. Bates Insurance Group, accepts the award from Columbus Business First.

of 50 to 99 percent landed J.T. Bates Insurance Group at number seventeen on the list. Developing new risk management products that keep pace with exponential growth isn’t easy. So how does J.T. Bates Insurance Group do it? By putting the right people in the right positions to drive and support expansion. “When we started offering rental equipment protection (REP), it was a lot of road time for Jim [Ricker] and me,” said Jayme Bates, vice president of J.T. Bates Insurance Group. “My background is in product management, and we knew that if we were to grow the way we wanted to, we needed to develop a highperforming team to drive sales so I could focus on insurance product development and diversification. It was a significant change within our organization.” Bates began building a sales team, starting

with sales manager Kimberly Orza, and tasked her with driving sales of REP. Miriah Smith was placed over certificate management with the goal of expanding the product and the client base. “Since that time, J. T. Bates Insurance Group has added physical damage insurance and an extended warranty program to our product assortment in order to better serve our clients,” said Bates. “The products and human resources together have changed our trajectory, and the results have been remarkable.” Planning at J.T. Bates Insurance Group is increasingly reliant on information-gathering and data, and the company is expanding internal data reporting capabilities as well as relying on external data sources. Having a plan for growth helps Ricker and Bates maintain the momentum. “We’ve hired a director of marketing who is going to help us with refining our brand and relaunching our website,” said Bates. “You’ll be seeing the J.T. Bates Insurance Group brand more as we execute a top-down marketing strategy informed by industry trends and data. We want to be the number one choice for equipment dealers looking for risk management solutions, and we’re taking steps to make that happen.” For more information, please visit www.jtbatesgroup.com.

Defoe Appointed Atlas Copco North Region Vice President Atlas Copco Power Technique North America LLC has appointed Eudes Defoe to the position of Atlas Copco Vice President, North Region. Defoe is responsible for managing the development and implementation of sales and marketing activities to achieve Atlas Copco’s targets and goals. The brand provides air, power and flow solutions to multiple segments through products such as mobile compressors, pumps, light towers and generators. The North Region includes Connecticut, Delaware, District of Columbia, Illinois, Eudes Defoe Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia and Wisconsin. 12 | www.cedmag.com | Construction Equipment Distribution | February 2018

“As our company evolves, Eudes will use his industry expertise, experience and passion to serve the needs of our customers in the region,” said Scott Carnell, president of Atlas Copco Power Technique North America. Defoe joined Atlas Copco in 1992 and brings 25 years of leadership experience with the Atlas Copco family of companies. Most recently, Defoe worked as district sales manager for the Mid-Atlantic Region, Construction Equipment North America – Customer Center. To achieve Atlas Copco’s objectives, Defoe will oversee sales and marketing development and activity in the North Region, with a focus on regional sales expansion, elevating the brand and developing a strong sales team. “I am working to ensure all aspects of our sales and marketing activities demonstrate how Atlas Copco enables success for current and potential customers,” Defoe said. “Their success is key to our success.”

>> INDUSTRY >> INDUSTRY NEWS NEWS

Hyundai Construction Equipment Americas Names Five Top Dealers for 2017 Hyundai Construction Equipment Americas this week honored five of its top dealers for 2017 during a meeting of its North American dealers at the AED Summit in Las Vegas. Hyundai awarded its top honor of Dealer of the Year to Four Seasons Equipment Inc. of Houston, Texas. The dealer was recognized for excelling in customer satisfaction; overall dealership operations; and parts, service and equipment sales. Selected as top-performing Hyundai construction equipment dealers of 2017 were the following four companies: ▶ Robs Hydraulics Inc., Grimesland, N.C.; ▶ May Heavy Equipment, Lexington, N.C.; ▶ Modern Group Ltd., Bristol, Pa.; and ▶ Porter Group USA (formerly known as Heavy Equipment Rental & Sales), Corona, Calif. “Having served the North American construction equipment market for more than 25 years, Hyundai dealers are committed to delivering the best customer experience in the industry,” said M.S. Kang, president, Hyundai Construction Equipment Americas. “We congratulate the sales, service and management teams of our 2017 top dealerships for their hard work, dedication and success.” Hyundai Construction Equipment Americas, Inc., Norcross, Ga., offers a full line of wheel loaders, crawler excavators ranging from compact models to mass excavators, wheeled excavators, compaction equipment, hydraulic breakers and forklifts. Please visit www.hceamericas.com for more information or to locate a Hyundai Construction Equipment Americas dealer in your area. For more information about Hyundai Construction Equipment Americas, Hyundai products or dealership opportunities, visit www.hceamericas.com or call 1-877-509-2254.

Hyundai Hosts Annual Dealer Meeting at AED Summit

Hyundai Construction Equipment Americas hosted its annual North American dealer meeting in conjunction with the 2018 Associated Equipment Distributors (AED) Summit in Las Vegas. Dealer personnel representing more than 100 of Hyundai’s 170-plus locations across North America gathered for the event, which was designed to celebrate the brand’s rapid growth in the region. “Our construction equipment dealer network is growing steadily. In fact, several of the dealer personnel who participated in our annual dealer meeting are new to our brand,” said Stan Park, vice president of distribution/marketing for Hyundai Construction Equipment Americas. “We are committed to providing our dealers with the essential tools and information they need to develop and grow their business and communicate to their construction equipment customers the solid value delivered by Hyundai wheel loaders, crawler excavators, wheeled excavators, compaction equipment and hydraulic breakers,” Park said. Hyundai’s executive and management team shared strategic direction and plans for future regional and global growth of the brand. Hyundai celebrated an impressive 20-plus percent growth in 2017, along with significant market share growth and dealership and territory expansion. “We have a clear strategy to maintain our aggressive growth in North America and beyond, and our dealer network is key to our forward momentum,” Park said. “As the face of the Hyundai Construction Equipment brand – and our trusted advocates in the marketplace – our dealer partners are excited about the direction we are headed, and we are very appreciative of their continued support and loyalty.”

February 2018 | Construction Equipment Distribution | www.cedmag.com | 13

>> INDUSTRY NEWS

Felling Presents Donation to Special Olympics Golden Eagles and Young Athletes Teams Felling Trailers Inc. conducted its fifth annual online auction of an FT-3 drop deck utility trailer to benefit a nonprofit organization, Special Olympics Minnesota, in October of last year. To close the chapter on the year’s story, Felling Trailers presented the donation checks to two Special Olympics teams, the Special Olympics Golden Eagles and the Young Athletes. “Special Olympics Minnesota was very gracious to allow Felling Trailers to keep the donated funds local. The Special Olympics Golden Eagles team is comprised of participants from the Sauk Centre and Melrose, Minnesota, areas and the Young Athletes team is from the Sauk Centre area,” said Brenda Jennissen, CEO of Felling Trailers Inc. The winning bid of $2,900 was divided between the two groups, with $2,000 going to the Golden Eagles team and $900 to the Young Athletes team. “It was truly a pleasure to meet those that will directly benefit from the dollars raised through our Trailer for a Cause Auction,” said Jennissen. The Golden Eagles team has close to 80 participants ranging from 8 years old all the way to 79. The athletes train and participate in competitions through the bulk of the year in a variety of sports, such as flag football, basketball, bowling, swimming, and track & field. An average practice day for the team starts with announcements and a warmup period that includes stretches and a few exercises. Then they work on skills according to the specific sport they are practicing. For team sports, they work on running plays together, and coaches work with each athlete individually to make them as successful as they can be. “The donation we received will be used for our upcoming state competition in June. It will be for our track & field and swimming competitions. This is a three-day event, so we will be staying in a hotel and will need transportation for that trip,” said Beth Brummer, a coach for the Golden Eagles team. The Young Athletes team currently has 28 participants ranging in age from 2 to 7 years old. The program is a stepping stone, so to speak, that introduces children with and without intellectual disabilities to the world of sports. The team meets two times a year, fall and spring, for eight weeks. The 2017 Trailer for a Cause FT-3 utility trailer was painted in

Felling’s Viper Red and sported a custom decal featuring the Special Olympics logo. Felling Trailers wanted to bring awareness of Special Olympics and help provide funding for the individuals who take part in and benefit from the events and services provided by Special Olympics Minnesota (SOMN). The online auction ran for 12 days, from midnight on Sunday, September 24, through midnight on Thursday, October 5, ending with a winning bid of $2,900. One hundred percent of the $2,900 winning bid went to benefit Special Olympics Minnesota.

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Felling Trailers is a family-owned and -operated full-line trailer manufacturer located in central Minnesota. Started in 1974 by Merle J. and Kathy Felling, Felling’s daughters Brenda Jennissen and Bonnie Radjenovich now own and operate the company with their spouses Patrick Jennissen and Paul Radjenovich. Felling Trailers Inc. has grown from a small shop to a factory and office complex that today covers over 260,000 square feet. For more information, contact 800-245-2809, sales@felling.com or visit them on the web at www.felling.com.

>> INDUSTRY NEWS

KOBELCO USA Grows Excavator Dealer Network KOBELCO Construction Machinery USA continues to expand representation in the North American market by adding Correlli Inc. and Frank Martin Sons Inc. to its growing dealer network. “Correlli and Frank Martin Sons are top-notch dealerships that maintain strong commitments to exceeding customer expectations and consistently deliver superior service and product support,” says Pete Morita, vice president, excavator division at KOBELCO USA. “We’re excited to provide our customers with the quality and value of KOBELCO excavators through our powerful dealer network, and we look forward to a lasting partnership with both dealers.” The staff of Correlli and Frank Martin Sons will be working closely with KOBELCO to gain the required sales and product support training to deliver on the KOBELCO promise of customer satisfaction. Both dealerships will provide professional sales, rentals, parts and service support on KOBELCO excavators in the U.S. Correlli of Dundalk, Maryland, will

represent KOBELCO solely as a compact excavator dealership. They are dedicated to serving the landscaping, commercial property and residential construction industries and will offer several KOBELCO units weighing up to nine metric tons. Frank Martin Sons will represent the full line of KOBELCO excavators from their locations in Fort Kent Mills and Madison, Maine. They are a full-service heavy equipment dealership that delivers exceptional service to customers

in the agricultural, forestry, and general construction industries. For more information on the new KOBELCO dealers, or KOBELCO excavators currently in stock, please visit Correlli Inc. at www.Correlli.net and Frank Martin Sons Inc. at www.FMS-Equipment.com. KOBELCO Construction Machinery USA offers industry-leading crawler excavators in the 3,000 lb. to 245,000 lb. classes including zero tail swing, compact, standard, longreach, mass excavation, and demolition models. Well-known as the excavator authority, KOBELCO is committed to producing quality machines with advanced productivity-boosting features and innovative technologies. With premier capabilities such as no-time-limit power boost and exclusive independent travel, KOBELCO machines ensure superior performance and efficiency for the toughest worksite challenges. For more information on KOBELCO Construction Machinery USA or KOBELCO products, please visit www.kobelco-usa.com or call 281-888-8430.

Cox named Sales Director for Terex Cranes North America

Terex Cranes announces Bill Cox as the new sales director for Terex Cranes North America. In his role, he will work with Terex Cranes’ senior management to set and drive equipment sales strategy throughout the United States and Canada, lead the Terex Cranes internal and field sales teams, and interact with Terex Cranes’ distributors and customers. He replaces Mark Phillippi, who retired at the end of last year. “We welcome Bill to Terex to lead the North American Cranes sales team. His passion for field sales support, distributor development, technical training and equipment applications Bill Cox assistance will help us to advance support of our customers’ success in the field,” says Dean Barley, vice president and general manager for Terex Cranes Americas. “He brings to Terex nearly 25 years of construction equipment sales experience, which helps to strengthen our commitment to customers.” Cox began his construction sales management career in 1993 as district sales manager for Stone Construction Equipment Inc., working with customers and distributors throughout a five-state territory. He worked for Terex briefly in the early 2000s, managing sales and distributor development for Genie and the Terex Light Construction division. Most recently, Cox served as a crane equipment sales and distributor development representative for Tadano Mantis Corporation.

“I am excited to join the Terex Cranes team and am looking forward to working with customers, distributors and the rest of the Terex Cranes field sales team,” says Cox. “Through the Terex and Demag brands, we offer companies the industry’s widest range of lifting solutions, backed by unparalleled applications expertise, to meet virtually any customer need.”

Mark Phillippi Retires

After 16 years with Terex, Mark Phillippi retired from Terex Cranes at the end of December. His career with Terex began in August of 2001 as the general manager of Terex Asset Service. Making the transition to Terex Cranes, he started as vice president of Crane Financial Sales and then managed field sales for the central region. He retires as the director of sales for the South, West and Mexico territories, which he held since 2009. “We thank Mark for his years of dedication to Terex and the Cranes segment and for his tireless work ethic,” says Barley. “His efforts helped to drive sales and fuel market growth for Terex Cranes throughout his region.” Reflecting on his career, Phillippi comments, “Working with a great team and wonderful customers, my time in the cranes industry and with Terex has been much more fun than work. I enjoyed working in this industry and will cherish the friendships made over the years, both at Terex and in the field with our distributor representatives and customers.” February 2018 | Construction Equipment Distribution | www.cedmag.com | 15

>> PRODUCT PREVIEW

Epiroc Brand Makes World Of Concrete Debut Epiroc AB, the subsidiary of Atlas Copco Group that is planned to be listed on the stock exchange in 2018, is exhibiting at World of Concrete for the first time. Operating under its own brand name and logo, Epiroc is showcasing its hydraulic attachments product range at the international event, which runs Jan. 23–26 in Las Vegas. Atlas Copco announced in January 2017 that the Group will split into two companies in 2018: Atlas Copco, focusing on industrial customers, and Epiroc, focusing on mining, infrastructure and natural resources customers. Epiroc began operating as an independent business on Dec. 1, 2017, providing market-leading products and services to those industries. At World of Concrete, Epiroc is promoting the extensive line of tools from its hydraulic attachments division, including Hydraulic Breakers, Combi Cutters, Concrete Busters, Pulverizers, Multi Grapples, Compactors, Bucket Crushers, Hydro Magnets, Steel Cutters, and Drum Cutters.

“Epiroc was formed to better serve our customers,” said Matt Cadnum, vice president, hydraulic attachment tools, U.S. and Canada. “Becoming Epiroc allows us to build on the proven quality and expertise of Atlas Copco while narrowing our focus. For the Hydraulic Attachment Tools division, that means providing our customers with more support and more equipment that enhances productivity, energy efficiency, safety and ergonomics.” In the United States, the Epiroc organization started operating under the Epiroc name as of Dec. 1, 2017. Epiroc is born of the Mining and Rock Excavation Technique business area and the Hydraulic Attachment Tools division of Atlas Copco. The name comes from Greek and Latin roots meaning “at the rock,” reflecting the brand’s newly dedicated industry focus, proximity to customers, and strength of relationships. The new dedicated Hydraulic Attachment Competency Center in Independence, Ohio, is one example of how Epiroc is now better

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positioned to serve customers than ever before. The facility combines a customer center, a repair shop and configuration center, and a parts and supplies warehouse with a dedicated team focused solely on hydraulic attachments. Parts and supplies were relocated from the Atlas Copco Distribution Center in Charlotte, North Carolina, to help streamline all operations related to hydraulic attachments. The resulting increase in operating efficiency has led to team growth and increased competency levels for specific application support and technical service across the 89 models of Epiroc hydraulic attachments. “Epiroc is taking what we do best and making it even better,” Cadnum said. “We have the same people and drive to support the success of our customers, but now we can truly focus our energy. We’re excited to introduce our brand at World of Concrete, and we look forward to growing with our customers in the years to come.” Visit www.epiroc.com.

▶ THE AED FOUNDATION DONOR PROFILE

Berry Companies grooms future technicians:

HELP ALWAYS WANTED Berry Companies pairs up with The AED Foundation to invest in future of the industry

By Heidi Bitsoli Practically every company in the equipment industry faces the same dilemma: finding qualified technicians. Berry Companies, Inc. knows the struggle is all too real. “Our industry has a severe shortage of technicians,” says Judy Worrell, Vice President Administration/Secretary/Treasurer for the Wichita-based company. Berry Companies’ roots extend back to 1957 when brothers Fred Berry, Jr. and Paul Berry purchased the Sam H. Denney Road Machinery Company. In the decades since, they’ve acquired and founded seven more companies, including the holding company, Berry Companies. Today Berry employs nearly 700 individuals at 31 locations in Kansas, Missouri, Oklahoma, Texas, Colorado and Wyoming. From its headquarters it provides administrative support – including Information Technology, accounting, payroll, benefits and financial resources – to its operating divisions, which are managed independently and distribute construction and material handling equipment. They offer Bobcat and Komatsu lines, among others. “Everything to do with the customer experience is run through our divisions,” Worrell explains, “and the General Manager runs their enterprise with autonomy. It’s important to the company that every employee feels it’s their business, too.” “Berry provides oversight and services that each company/ division would need to purchase from someone – we feel Berry Companies is a more efficient structure for us.” Berry Companies has been involved with AED and The AED Foundation for decades – supporting the annual AED Foundation Fundraising Gala, making use of educational offerings and accessing best practice resources AED provides. “We’ve had a few branch managers go through the branch management certification program,” Worrell says. Berry takes many of their managers to Summit to attend educational tracks, meet with manufacturers and network with other distributor members. Today, Steve Meadows, Vice President of the company’s Bobcat operations, is an at-large director for the AED Board and Worrell herself serves on the Foundation’s Board of Directors. As for the shortage of service technicians, Worrell says, “Counselors have been encouraged to steer all students toward

a four-year degree. That’s been a big hurdle for AED and our industry. Getting the students with technical skills and interest to a two-year accredited school or technical college is a win/win. Service technicians can earn a very good income.” Berry hired a recruiter a couple of years ago to fill the growing Your donation fuels the work that allows The AED Foundation to develop a dealer model for success. The future of dealerships depend on how we come together to build our industry's workforce. Thank you, Berry Companies Inc., for investing in the future of our industry! To contribute to The AED Foundation annual campaign, visit bit.ly/2018aedfcampaign.

number of open service technician spots. “Our recruiter is responsible for finding technicians, and visiting technical schools, as well as high schools to get students interested in our company and field,” Worrell says. Berry has also taken an active role in grooming future leaders for their company. About ten years ago, a person working for Worrell was pursuing a master’s in training and development. The result evolved into Berry Companies’ Leadership Development Program (LDP). “The underlying element of the six modules is all about our culture and getting our future leaders aligned with the culture,” Worrell explains. To date, approximately 130 have graduated, including service technicians, salesmen, department and branch managers. “To be nominated for the program, a supervisor must see potential in the candidate,” Worrell says. Even if a company is large enough to create its own education and leadership programs, as Berry does, Worrell states that there is tremendous value in supporting The AED Foundation. “The AED Foundation has many resources for education to offer their members. The programs and resources that The AED Foundation provides can be utilized by your training department,” Worrell says. “It is an excellent resource for members to use. We all need educated employees and few are working harder than The AED Foundation to provide well-qualified employees.” February 2018 | Construction Equipment Distribution | www.cedmag.com | 17

South Central: South Plains College On Track for AED Foundation Accreditation South Plains College (SPC) in Levelland, Texas, recently submitted an application to have its Diesel Service Technology Equipment Program accredited by The AED Foundation. The Diesel Service Technology Program is designed to train students to service construction equipment. Specific areas of training include engine

REGIONAL REPORT

Thomas Lunney

repair and overhaul; powertrain; steering repairs and alignment; fuel injection systems; hydraulic systems; auxiliary equipment such as starters, generators, alternators, switches, regulators, and other miscellaneous items; as well as troubleshooting procedures and shop management procedures. “We are excited to finally get our application in to The AED Foundation,” stated Whitney Owens, professor and program coordinator of Diesel Service Technology. “We are facing the same workforce shortages this industry and other industries face nationwide, principally due to the mindset over the past three decades at the high school level that every kid needs to go to a fouryear college. What we offer is the opportunity for a rewarding and financially viable career without the staggering debt many college students get saddled with.” The diesel tech program started in the ’70s and had only four students in 1989. Enrollment has ebbed and flowed over the years, and the program now has more than 50 students. SPC leaders are confident that AED Foundation Accreditation will lead to even more students and will give students more options, such as in the transportation, heavy equipment and/or agriculture disciplines.

Back in late 2013 to early 2014, the SPC diesel technology program leaders became interested in AED Foundation Accreditation. In 2014, a number of the Lubbock area AED dealers pooled resources and contributed funds to enable SPC to purchase a Bobcat 130 skid steer that could be converted into a hydrostatic trainer. Several hiccups along the way kept progress at bay until last fall; this was mostly due to state issues, including changes in allowable credit hours. Local dealers have been very supportive throughout the process. One of the strongest industry supporters has been Warren CAT. They have provided substantial funding in grants and scholarships since 2006. They also provided matching grants with CAT corporate through their Dealer Excellence program. There was also a working three-way partnership between Warren CAT, AGCO and SPC in a bid to put in place an agricultural equipment program; however, that more or less expired when Warren dropped the agricultural line. AGCO, however, has continued to provide SPC with training materials and has donated various items to the program. Continuing in support, Warren CAT provided SPC students access to their entire service library (CAT SIS). In addition to Warren CAT, several dealers now serve on SPC’s advisory committee. Among those are Yellowhouse Machinery, ASCO, Bee Equipment Sales, Ditch Witch, Vermeer, Cisco Equipment, B.E. Implement, and The Hydraulic Shop. “It’s been a long road, but one that will hopefully be paved with heavy equipment serviced by students graduating from SPC’s diesel tech program,” stated Steve Johnson, vice president of AED Foundation operations. “We look forward to reviewing SPC’s application, and we commend them for their hard work and dedication to get to this milestone.” South Plains College is a comprehensive two-year community college serving a 15-county area comprised of the southern portion of the Texas High Plains. The college’s main campus is located in Levelland. They provide innovative educational programs that span the arts and sciences, technical education, continuing education and workforce development. SPC also offers educational programs at two locations in Lubbock – the SPC Lubbock Center and the SPC Reese Center – as well as an extension center in Plainview.

THOMAS LUNNEY is AED's South Central Regional Manager. Reach him at tlunney@aednet.org and 630-468-5125. 18 | www.cedmag.com | Construction Equipment Distribution | February 2018

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>> CAPITOL CORNER

2018 in Washington:

Infrastructure Investment W

Tops AED’s Agenda

ith one year of the Trump administration in the books, there is still much to be accomplished in Washington in 2018. Despite the congressional midterm elections rapidly approaching, lawmakers and the administration have the opportunity, working across the aisle, to pursue policies that will sustain economic expansion for years to come. At the top of AED’s agenda is infrastructure investment. The Association welcomes the opportunity to work with congressional leadership and the administration, on a bipartisan basis, to rebuild the United By Daniel B. Fisher States. Key concentrations will also include improving the new tax law, regulatory reform, workforce development, expanding domestic energy production and promoting international trade.

Rebuild Our Nation’s Infrastructure

The United States’ infrastructure is in desperate need of a major upgrade. According to the American Society of Civil Engineers, America’s infrastructure scores a D+. Whether it’s structurally deficient bridges, dams and levees or inadequate roads, airports and pipes, America’s infrastructure is insufficient, and our leaders in Washington can no longer shun obligations when it comes to required upgrades. While the last highway bill (the FAST Act) provided near-term certainty to the federal highway program, our nation still faces a $740 billion backlog in much-needed road, highway and bridge improvements. Consequently, Congress must work to identify new Highway Trust Fund revenue sources to restore the program’s longterm fiscal stability and increase investment. Our airport infrastructure is also falling behind. Estimates are that between 2017 and 2021, U.S. airport infrastructure needs will be nearly $100 billion. It is expected that 24 of the top 30 major airports may soon experience “Thanksgiving-peak traffic volume” at least one day every week. With a $42 billion gap between airport needs and current investment levels, upgrading and expanding our nation’s airports as part of the Federal Aviation Administration reauthorization process should be a top priority. Government and industry studies have estimated the nation’s water infrastructure needs over the next two decades in the hundreds of billions of dollars. However, the Clean Water and Safe Drinking Water State Revolving Fund (SRF), the primary investment vehicle 20 | www.cedmag.com | Construction Equipment Distribution | February 2018

for water infrastructure projects, has been reduced substantially since 2010. Lawmakers should restore and increase SRF funding levels and explore public-private partnerships to tap into private capital for these important projects. America’s power grid is operating at full capacity. Most of the U.S. energy system dates to the mid-20th century. The time is long overdue for a major upgrade to our energy infrastructure. Congress must focus greater attention on replacing aging equipment and accommodating increased demand. Additionally, investments are necessary to ensure that broadband infrastructure keeps pace with growing demands for internet access.

Restore Certainty and Predictability to the Tax Code

While the Tax Cuts and Jobs Act contained many pro-growth policies, including lowering the tax burden for pass-throughs, full expensing of new and used equipment purchases and business interest limitations tied to EBITDA, these provisions are temporary. Congress must work to make these important capital investment incentives a permanent part of the tax code to provide certainty for construction equipment dealers, manufacturers and customers. Similarly, Congress significantly increased the estate tax exemption levels ($11.2 million per individual/$22.4 million per couple), but the provision expires after 2025. Unfortunately, the lack of permanency will cause businesses to dedicate significant resources to estate planning and estate-tax-related life insurance. Lawmakers must provide long-term certainty to family-owned businesses, ideally through permanent repeal of the federal estate tax.

The Tax Cuts and Jobs Act repealed Sec. 1031 like-kind exchanges (LKE) for personal property. LKE has been a valuable tool for equipment dealers to help manage the tax consequences of buying and selling equipment in their rental fleets and freeing up resources to make new capital investments. While full expensing provides some near-term relief for LKE users, the provision is only for five years, creating enormous business uncertainty. If it’s not extended, many equipment dealers will be in a significantly worse-off position than they are today. Consequently, Congress should restore LKE for personal property as part of the federal tax code. The speed at which Congress drafted and approved the Tax Cuts and Jobs Act undoubtedly means there will be unintended consequences and technical errors. As a result, AED urges lawmakers to remedy such issues immediately. Additionally, AED encourages the IRS and the Treasury Department to implement the new law promptly and according to congressional intent to provide certainty for business owners.

Protect Equipment Distributors from Harmful and Unnecessary Regulations

The regulatory landscape in Washington has improved dramatically as the Trump administration has repealed or halted unnecessary and burdensome regulatory mandates from the National Labor Relations Board (NLRB), the Occupational Safety & Health Administration (OSHA), the Department of Labor (DOL), the Environmental Protection Agency (EPA) and other federal agencies. While the regulatory relief is welcomed, Congress must enact permanent regulatory reforms that will ensure the American people and businesses are protected from onerous regulations in the future. Lawmakers should approve legislation to impose more accountability on regulators and strengthen small business protections during the regulatory process, including enhancing the role of the Small Business Administration’s Office of Advocacy. Federal agencies should also dedicate more time and resources to compliance assistance and outreach.

Invest in the Next Generation of Skilled Technical Workers

For decades, equipment distributors have identified the technician shortage as a major strategic challenge for the equipment industry. Through The AED Foundation, the Association has a decadeslong history of tackling the skills gap by creating partnerships with local technical schools, providing training for the current industry workforce, and promoting equipment industry careers. A 2016 AED Foundation study found that the shortage of equipment technicians is costing dealers $2.4 billion per year in lost economic opportunity. Lack of skilled workers is hindering economic growth, and Congress must channel resources to educating a new generation of technical workers. Federal laws should be updated, such as reauthorizing the Carl D. Perkins Career and Technical Education Act, to reflect current workforce needs and to allow greater flexibility for state and local entities, nongovernmental organizations, community colleges and technical schools, and industry to work together to address the skilled worker deficiency. Congress must also provide additional resources to fund new sector-based workforce strategies that connect employers, schools, and local governments and recognize that short-term skills- and

job-oriented training programs can play as significant a role in the education of skilled workers as full-blown college degree programs.

Expand Domestic Energy Production

The United States must continue to develop its energy resources and become an even more significant global energy producer. The federal government should ensure that shale energy development can continue across the country and must recognize that its benefits are best measured and understood at the state level. Additionally, policymakers should explore opening more federal land to energy development. Congress and the administration should also work together to renew the vitality of other energy sectors – including coal – that have been undermined by federal policy in recent years. Continuing to improve the federal permitting process for the construction of new infrastructure to transport and process energy must remain a priority.

Promote International Trade and Commerce

The United States operates in a global economy. While protectionist rhetoric makes good campaign sound bites, the reality is that American companies rely heavily on free trade agreements and other accords that permit accessible and efficient international trade. Consequently, reforms to NAFTA and other international trade pacts should focus on modernizing these agreements rather than scrapping them altogether. Congress should work to promote free trade by engaging with Cuba, to ensure the long-term viability of the Export-Import Bank, and to build closer relationships with Canada through greater regulatory harmonization and improving the movement of goods across the United States’ northern border. Additionally, Congress and the administration should reject any efforts to expand Buy America provisions beyond materials used “in” construction projects (steel, iron, cement, etc.) to include equipment used “on” job sites.

Stay Engaged

Last year, the old Washington adage “if you’re not at the table, you’re on the menu” hit home for the construction equipment industry. The new tax law is far from perfect, but undoubtedly the industry would be in a far worse position if not for the engagement of AED and its members. To push an infrastructure package and AED’s other legislative priorities across the finish line will require a similar effort. Be sure to join your equipment industry colleagues at the 2018 Washington Fly-In on March 20-22. There’s too much at stake not to advocate for your company and the industry. Register at bit.ly/2018flyin.

DANIEL B. FISHER is AED's vice president of government affairs. He can be reached at dfisher@aednet.org and 202-897-8799. February 2018 | Construction Equipment Distribution | www.cedmag.com | 21

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Passage Highlights the Importance of Government Engagement

By Megan Mattingly-Arthur n December, President Trump signed his historic tax reform bill into law, signaling a significant victory – not just for the president or his party, but for AED leadership and members who worked tirelessly to ensure that the final version of the bill contained provisions favorable to the industry. While far from perfect, the new tax law is expected to have overall benefits for dealers, customers and the heavy equipment industry as a whole. “We always knew that there would be both threats and opportunities to equipment dealers as the tax reform process proceeded,” said Daniel B. Fisher, AED’s vice president of government affairs. “One of my goals was to ensure that Congress didn’t cause AED members to be worse off. Before it was signed into law, AED was able to get modifications that will make the new tax law a positive for construction equipment dealers and their customers, which should benefit the entire industry.” One key area where AED’s engagement made an indisputable difference is in preserving members’ ability to take advantage of the full expensing provision. “The House-passed tax bill prevented construction equipment dealers from taking advantage of the legislation’s full expensing provision in exchange for an increased business interest deduction,” Fisher said. “While business interest is certainly very important, as an association, it was decided that having the ability to deduct business interest up to 30 percent of EBITDA and having full expensing for new and used equipment purchases was the best scenario for AED members. Working with AED board members, we ensured that construction equipment dealers were not included in a mandatory carve-out in the Senate’s tax legislation and the final conference report. It doesn’t happen often that an issue specifically targeting construction equipment dealers is considered in Congress, but this situation highlighted what’s at stake and the importance of having a Washington presence.” According to Michael Brennan, president and COO of Bramco and vice chairman of the AED board of directors, the outcome simply wouldn’t have been the same were it not for AED’s lobbying efforts. “AED really made a difference for all dealers,” he said. “The

relationships that we’d built really helped and, if we had not been at the table, the outcome would not have been good for our dealers.” Both Fisher and Brennan stressed the importance of building relationships with members of Congress – preferably before needing something from them. “It’s important to get involved and remain engaged in what’s happening in Washington,” Fisher said. “It’s really tough to make a friend in D.C. when you need one – build those relationships and have them in place so that, when you do need something, you’re not just calling out of the blue. The passage of a favorable tax reform bill shows that we had built the relationships on Capitol Hill and in the administration, and the many visits by AED members to Washington proved worthwhile. We could have easily been in a situation where construction equipment dealers were significantly worse off than prior to tax reform.” When it comes to the power of engaging Congress, Brennan is a true believer. He’s been lobbying his members of Congress on issues that are important to the industry for more than a decade. In that time, he’s developed a particularly close constituent–representative relationship with Senate Majority Leader Mitch McConnell (and his staff), having hosted events for him in 2014 and, again, in early November. “So many of our members think that they can’t do anything about what’s happening in Washington or that what they do won’t have an effect, so they don’t engage their senators or representatives,” Brennan said. “The outcome of the tax reform bill shows that you actually can make a difference.” The tax reform bill may have been signed into law, but the battle is far from over. The temporary nature of some of the provisions necessitates future legislation – and AED will be working to lay the groundwork to ensure that the appropriate provisions are extended. Infrastructure and workforce development are also among AED’s top legislative priorities for 2018. For more information on AED’s Government Affairs program, visit aednet.org/government-affairs or connect with AED on Facebook, Twitter, YouTube, LinkedIn and Google+. Also, you can follow AED’s Government Affairs program on Twitter using #AEDGovAffairs. February 2018 | Construction Equipment Distribution | www.cedmag.com | 23

Meet the Chairwoman 24 | www.cedmag.com | Construction Equipment Distribution | February 2018

Diane Benck and her brothers grew up working in the family business founded by their parents, Mary and Rich, in Illinois.

Unintentional Trailblazer Diane Benck Is Breaking Down Barriers

By Karen Algeo Krizman iane Benck never set out to be a trailblazer. Yet, here she is. The vice president of general operations at West Side Tractor Sales on the outskirts of Chicago is the first woman to be named chairwoman of Associated Equipment Distributors (AED). “It always takes me aback when people say, ‘Look at what you accomplished and how you stepped into an incredibly male-dominated business,’ ” Benck says. “I just kept trying to blend in and be one of the guys all the time. But at this point in my career, I do realize that I’m a role model for women starting out in this business. It wasn’t my intention by any means, but certainly is something that I’m very proud of contributing to the industry.” Benck and her brothers, Steve and Tom, grew up working in the family business founded by their parents, Mary and Rich, in Naperville, Illinois. “We all started working in the dealership while in high school and college,” she recalls. “We did a lot of manual labor. Since I was a girl, I was spared the wash rack but spent many hours putting away parts, counting o-rings, answering phones and having an assortment of odd jobs over the years.” Her original intention, after graduating from the University of Wisconsin at Madison and earning a master’s degree in psychology, was not to work in the equipment distribution industry. Yet somehow she couldn’t drag herself away from the business. “My goal was to be a psychologist,” Benck recalls. “After graduate school, I had a full- time job as a therapist and I was also teaching a couple classes at a community college. As if two jobs weren’t enough, I couldn’t depart from my duties at West Side Tractor. I looked February 2018 | Construction Equipment Distribution | www.cedmag.com | 25

and service department for years. “They are excellent at getting out on job sites and helping the customer figure out what they need. That’s not necessarily my strength. “Do I have work boots in my office? Yes, but I’m generally focused on our internal operations and giving quality service to customers. One of West Side Tractor’s main priorities is to push the team in a positive way to improve metrics, both financially and in customer service.” Providing quality service while advocating for those in the equipment distribution industry is also part of what she wants to continue to offer as AED’s new chairwoman. “I think AED has really done a great job of enhancing all the programs and offering new educational opportunities, and I want to continue down that trajectory,” she says. “I want to continue to offer topnotch education for the next generation entering the industry.” This includes AED members in Canada. “The association’s presence wasn’t strong in Canada, and we have recently made new enhancements towards our Canadian members,” she says. “I want to continue to make sure we have a strong value proposition for the Canadian dealers in our association and hopefully be able to continue to increase membership there as well.” Here at home, Benck will be keeping a close eye on what’s going in Washington D.C. “I think staying on top of advocacy and continuing to enhance our government affairs program has always been a prime objective for me with AED and definitely will be during my chairmanship as well.” In Benck’s eyes, the happenings – or non-happenings From left are AED President and CEO Brian P. McGuire, U.S. House Speaker Paul Ryan – in D.C. are some of AED’s biggest challenges moving (R-WI) and Diane Benck. forward. Particularly of concern is the tax reform measure that recently passed. “I was very impressed “Those are skills I certainly carried into managing employees, with our efforts in Washington D.C. during this monumental as well as supplier and customer relationships,” Benck says. “In restructuring of our tax code. AED staff and the board worked fact, I still use those particular skills occasionally by doing group overtime to make sure our interests were represented. I told therapy between sales and service or service and parts.” some dealers recently that AED justified the last 10 years of dues By her own admission, she is also the family therapist and the they’ve paid to the organization by the efforts that were put forth “glue” that holds the family together. for them in D.C. during the last few months. “I think the fact that I love family businesses and what they “It is mostly positive, but the devil is in the details,” Benck says. represent, including all of their messiness and complicated “Congress and the Senate are trying to do us a favor, too, as smaller relationships is the psychologist in me.” and midsize companies. My biggest worry is that sometimes in Vital to running a successful family business is looking at what their effort to do right, there are unintended consequences.” strengths each person brings to the table. Aside from tax reform, Benck sees the lack of a long-term “Myself and my siblings have different areas of expertise that we infrastructure funding plan as the next biggest challenge facing bring to the table,” she says. “One particular area my family has AED. been exceptionally skilled at through the years is understanding “We haven’t raised the gas tax in, I think, 30-some years,” she what each person has to offer, and we will often say, ‘Hey, you’re says. “A lot of states have now put on a gas tax, but federally they’ve better at that than I am. Would you mind taking care of this for been very concerned about increasing that, because it hits the me?’ It is important to first and foremost do what is right for the lower end of the income group when you increase a gas tax. The company and set our egos aside.” revenue pot just keeps getting smaller and smaller. It’s challenging Today the three siblings are equal partners in West Side Tractor, to find bipartisan support for new funding mechanisms.” which their parents turned over to them in 1986. Steve is in charge While Benck doesn’t have a ready solution to the infrastructure of machine sales and the company’s specialized rail business, issue or the tax issues, she does promise that AED will continue while Tom manages the consignment and used equipment fleets. to advocate for its members. “In general, Steve and Tom are great at building customer “Can I say what will happen? I have absolutely no idea; I have relationships and are very knowledgeable of the industry and no control over it. But we’re going to fight hard to get the point machine application,” says Diane, who ran the company’s parts across in Washington.” in the mirror and said ‘Why can’t you quit there?’” After some much needed soul searching, she accepted that she and West Side were inseparable. “It wasn’t so much about the tractors or the industry,” she says. “But I wanted to continue to play a part within the family business. So I quit my other jobs and dedicated my career to West Side Tractor. As I reflect on this journey, it has become one of the best decision I ever made.” The skills Benck acquired as a psychologist, particularly those related to communicating and listening, have served her well in the equipment industry.

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Women in the

Workforce 28 | www.cedmag.com | Construction Equipment Distribution | February 2018

Diane Benck, center, with two nieces who also work for West Side Tractor Sales.

Industry Seeing More Female Faces

By Karen Algeo Krizman ith Diane Benck taking the helm of Associated Equipment Distributors (AED), it’s clear the male-dominated construction equipment industry is finally turning a corner – albeit slowly and more out of necessity than anything else. “I think (the industry’s) been known as a good ol’ boys club and it has worked for a long time,” said Betsy Wagner of Wagner Equipment in Colorado. “But as young people are moving away from hardworking blue-collar jobs, we as a whole and as an industry are having to look in places we’ve never looked before to find qualified workers.” The construction industry in general is still made up mostly of men. The U.S. Bureau of Labor Statistics (BLS) reported in 2016 that of the 6.9 million workers in the industry, only 9.1 percent were women. Among the 203,000 skilled technicians working on heavy vehicles and mobile equipment that same year, only 0.5 percent were women, according to the BLS. Nevertheless, as individuals in the industry attend

At left: “I’m starting to see the numbers are climbing, but they certainly are not anywhere near equal. It’s like moving mountains,” says Karen Zajick of Norris Sales Co. in Pennsylvania. February 2018 | Construction Equipment Distribution | www.cedmag.com | 29

AED-sponsored events, they are seeing more female faces in the crowd. “It’s been a welcome change. I remember when I first started going to AED events, I’d typically be the only female in the entire audience of more than 100 people,” said Karen Zajick of Norris Sales Co. Inc. in Pennsylvania. “I’m starting to see that the number of women attendees are increasing because of recent advancements in the construction equipment distribution industry. However, they certainly are not anywhere near equal. It’s like moving mountains.” Yet most women in the industry still hold positions traditionally held by females. “When it is a family-owned business, you may see more women in management positions, but there are still many traditional female roles in this industry,” Benck said. “When you get down to salespeople, individuals out in the field and technicians, female workers are still few and far between.” That could change drastically in the coming years, with baby boomers hitting their retirement years and fewer millennials wanting to work in blue-collar jobs. A 2016 AED Foundation report found that the industry is losing at least $2.4 billion in opportunities because of the lack of skilled technicians, which is part of the impetus that may drive a push for more women in the field. 30 | www.cedmag.com | Construction Equipment Distribution | February 2018

“Excluding over 50 percent of our population due to their gender just doesn’t make sense,” Wagner said. “We need more of the population to select from. Of course, we want diversity – both racial and gender – but for us it’s that we need more people.” “There is a new generation coming into the workforce and they want diversity,” Benck said. “They want equal opportunity no matter what your sex or race is. It is important that our industry recognizes this and implements the proper changes.” Wagner agrees with Benck’s assessment and said the younger generation of workers sees diversity as a benefit. “Industry-specific studies have been conducted that show companies with highly diverse boards and upper management produce a higher profit. I think as these numbers come out, we’re really going to see a change in future generations: up-and-coming leadership, people who are going to be able to look past how someone looks and instead ask how to make money.” In the meantime, the equipment distribution industry still has to deal with its lingering good ol’ boy reputation. “It’s a culture, and right now you have to be a tough woman to succeed in this industry,” Wagner said. “Companies that aren’t willingly to make these necessary changes may face uncertain difficulties in years to come.”

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Not all technicians are created the same. Certify your technicians today; the proof is in their results. Learn more about The AED Foundation and its Certified Technician program by visiting www.aedfoundation.org or call 800-388-0650.

From left are Dustin Henderson, Treasurer; J. Farrel Henderson; and Dean Henderson, Vice President of R.B. Everett & Co.

R.B. Everett & Co. President Celebrates 60 Years With Company

By Megan Mattingly-Arthur n mid-November, R.B. Everett & Co. President J. Farrel Henderson invited more than 80 employees, family members and other guests into his home for a very special celebration in honor of his six decades with the company. The well-attended soiree – which also recognized other long-time employees – included a brief retrospective on the history of the company from its inception in 1911 to when Henderson took the reins in 1982. “I started at R.B. Everett & Co. in 1957, so I’ve been here for 60 years,” Henderson said. “We decided that we should do something special to celebrate my 60 years with the company, so we threw a big party at my house, invited our employees and friends, and had a wonderful time.” By all accounts, the event was a rousing success – much like Henderson’s ongoing tenure at R.B. Everett & Co. The Houstonarea-headquartered heavy equipment dealership has flourished under his leadership, growing from one location to two. “The business has grown a lot over the years,” Henderson said. “We now have two locations – one in the Houston area and one outside of Dallas. We’re successful at what we do, in part because we’ve improved the manufacturers that we represent and we have

a lot of experienced salespeople who have been with us for a long time – some more than 30 years.” What Henderson’s accomplished with R.B. Everett & Co. is particularly impressive considering that he happened into a career in the heavy equipment industry almost by chance. He grew up in a small community in east Texas and moved to Houston right out of high school with nothing but the clothes on his back and a $20 loan from his father. After working a handful of unsatisfying jobs, Henderson went to an employment agency and was sent to R.B. Everett & Co., where he took a position as an accounts-billable/ accounts-receivable bookkeeper. “I was hired on Nov. 22, 1957, and I’ve been here ever since,” Henderson said. “You might say I walked in off the streets looking for a job and wound up owning the company.” That, of course, is the condensed version of the story. In the years between being hired and becoming president, Henderson went to night school to further his education, worked his way up the company ladder to the position of treasurer, and became close with Emma Neblett, widow of company founder R.B. Everett. “Mrs. Neblett didn’t have any descendants, and she and I became really close over a period of time,” Henderson said. “One day,

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she asked me to come meet with her and she said, ‘Farrel, it’s tough to be the last person in your family, but that’s the situation I’m in.’ Then she told me she wanted me to have ownership of the company when she died and gave me a pair of cuff links that were in her family for years. I’m really proud of where we’ve come from and where we are today.” The business is also a family affair for Henderson. His son, Dean, has worked for R.B. Everett & Co. for 37 years and currently serves as vice president, and his grandson, Dustin, has worked for the company for nine years and serves as treasurer. “We’re just a typical construction equipment dealer that’s grown over time and become successful,” he said. “We’re very happy.” R.B. Everett also has the distinction of being one of AED’s oldest members, having first joined the Association all the way back in 1923. “AED is highly important to our industry,” said Henderson. “We’ve made a point to have representation at the AED Summit each year and are just really pleased to be a part of this organization.” To learn more about R.B. Everett & Co., visit rbeverett.com. R.B. Everett & Co. is also on Facebook, Twitter, YouTube and Google+.

R.B. Everett & Co. President J. Farrel Henderson has been with the company since 1957 and took the reins in 1982. February 2018 | Construction Equipment Distribution | www.cedmag.com | 33

Journey TO THE

TOP 34 | www.cedmag.com | Construction Equipment Distribution | February 2018

Digga North America President Worked in Public Accounting Before Holding Executive Positions By Megan Mattingly-Arthur teve Hoeger isn’t one who had to be coaxed into a career in the heavy equipment manufacturing industry. Having grown up in an area in Iowa where several equipment manufacturers are based, Hoeger was familiar with the industry – and ready when an opportunity presented itself. After working in public accounting and marketing for the HON Company, an office furniture designer and manufacturer, Hoeger moved on to work in mergers and acquisitions for Raytheon. Then, in 1999, he was offered an executivelevel position with attachment tools manufacturer Attachment Technologies. Steve Hoeger “I had a unique opportunity to move back home to Iowa and join Attachment Technologies (now Paladin), where I accepted the position of CFO,” Hoeger said. “Back in 1999, the attachment industry was very fragmented. Attachment Technologies began consolidating attachment companies so as to provide the dealers and OEMs with a high quality offering with consistent quality.” The company grew, and when it was sold to Norwest Equity Partners, Hoeger accepted a CFO position with Henderson Manufacturing, a heavy duty snow and ice equipment maker. It was a good fit for him. He spent 12 years with the company, eventually ascending to the position of senior vice president. “We grew the company organically by developing a complete truck package that included dump bodies, snow plows, underbody scrapers, sand/salt spreaders and more,” Hoeger said. “The primary customers were municipal agencies such as DOTs, tollway authorities, cities, counties, townships. We could provide our customers with a complete package at a competitive bid price, and the quality of the end product was consistent and designed to work together.” Two years ago, Hoeger accepted the position of president of Digga North America, an international manufacturing company that launched its North American operations in

2018. Some of Hoeger’s duties as president of Digga include working to develop a distribution channel with dealers, rental companies and OEMs, and keeping the company’s production capacity ahead of its growth. “Digga is highly specialized in the auger drive market; we offer 96 models to fit any job requirement,” Hoeger said. “We are not trying to be a one-stop shop, but rather we want to be experts at the products we do offer. By staying focused on a smaller product offering we can work with the customers to quickly respond to customizations. We have several attachment products that are designed and manufactured for Australia and Europe, and we are in the process of modifying the products to fit the North American market.” Though he may not have set out to become the president of an equipment manufacturing company, Hoeger loves working in the heavy equipment industry and, specifically, at Digga North America. “The customer base in the heavy equipment industry is fantastic, and working with our dealers and OEMs is one of my favorite things about the industry,” he said. “I also appreciate working with a company that’s new to the North American market, as it provides an opportunity to grow from scratch, thus avoiding the pitfalls and bureaucracy of established larger companies.” Facing a dire workforce shortage, the heavy equipment industry offers plentiful opportunities for those interested in working their way to the top. Hoeger had this advice for those who may be considering pursuing a career in the industry: “Stay focused on the end users of the product. They are continually running into difficulties in how to get the job done. By listening to them, new ideas and production can be developed.” When he’s not busy working, Hoeger likes to spend his free time outdoors. “I love to do anything outside – especially if it’s related to building things,” he said. “I enjoy golf, fishing, boating and gardening.” For more information on Digga North America, visit www.diggausa.com. Digga North America is also on Facebook, YouTube and Google+.

February 2018 | Construction Equipment Distribution | www.cedmag.com | 35

Canada’s Falcon Equipment Soars on Customization For Clients By Karen Algeo Krizman Falcon is not your typical equipment house. In addition to selling and servicing equipment, the Canadian company also fabricates rigs to its customers’ specifications. “We’re a little bit of an anomaly in the equipment distributor business,” Blair Norberg, Falcon vice president, said recently. “We buy a truck, and then we bring our equipment in, and then mount it. A lot of times we fabricate a flat deck and different peripheral equipment to package it all up, so we’re almost a packager. Then we sell that end equipment. It differentiates us a little bit having an installation department and a manufacturing/fabrication department, over and above parts, service and sales (departments).” Started in 1988 by Rick Kielan and Howard Hartin, Falcon has grown from a small two- to three-bay shop servicing truck cranes in Surrey, British Columbia to employing 110 workers and offering its customized services across Canada in addition to branching out to the rail business in 2004 with the launch of its sister company, Falcon Shuttle Rail Inc. Norberg, who himself was once a Falcon customer, joined the business in 2001, moving from an operations-focused position at his previous employer into sales. “The company has been able to provide plenty of opportunity and no two days are the same,” he said. “It keeps one guessing and excited about what tomorrow brings. It’s a progressive company that provides a lot of growth opportunity for its staff.” Today, Norberg is a shareholder, along with Kielan, who is CEO, and Hartin, who is in charge of corporate development. Kielan’s son, Dan, is president of the rail side of the business (Falcon Shuttle Rail). And their once tiny Surrey headquarters has ballooned to include a 17,000-squarefoot addition and four buildings, with another building recently purchased to add even more shop and office space. Outside of its headquarters, the company has locations in Nanaimo, British Columbia; Regina, Saskatchewan and Winnipeg, Manitoba. It also provides sales in Edmonton and Calgary, Alberta; Ottawa,

Ontario as well as some rail related sales in the United States. Yet, still, Norberg and the other stakeholders consider Falcon to be “small.” “Because we are still a private company, we can make decisions fast,” Norberg said. “We don’t need to go through boards if there’s a specific opportunity or product that we want to take on, or a customer has a certain need.” Meeting its customers’ needs is at the forefront of what Falcon does. “We pride ourselves on just really targeting what our customers’ needs are and filling those,” Norberg said. “As a Canadian company nowadays, we see a lot of our competitors getting bought up and a lot of our customers being bought up. The big do continue to get bigger, so we have to differentiate ourselves. I think we’ve done that by staying very custom.” With that customized focus in mind, Falcon considers its clients to be just another team member when it comes time to get the job done.

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“They come in, and we create and design together,” he said. “Then we put it on our shop floor and go from there. They can’t buy what we sell anywhere else.” They can, however, rent or buy refurbished pieces from Falcon, as the company – like all equipment houses – sees an increased demand for both. “We definitely see the trend,” Norberg said. “A lot of it was spurred by slower market times. ... Like everyone, it’s helped us get through some of those lean times. I think it just comes down to the end user not necessarily always having the capital expenditures in place to correspond with their equipment needs. All of a sudden they have to look at other means to get their equipment on site and we’re very flexible.” Falcon’s future plans include continued expansion through organic growth as well as acquisitions, Norberg said. “If we stay still and keep doing what we’re doing, that puts a small company in danger,” Norberg said. “We need to continue to grow and continue to make good decisions.”

SURVEY SAYS:

DON’T BE COOL

By Lindsey Wregglesworth It’s no secret that social media can be extremely beneficial for businesses of all sizes and scales. However, just because you’re active on social media doesn’t mean you’re using it the right way. We’ve shared our thoughts on best practices for social media in the past, but today we’re sharing a new report by Sprout Social, revealing what consumers have to say about businesses’ behavior on social media. What Consumers Don’t Want to See: Although “coolness” has often been associated with success on social media, this recent report shows that a “cool” business may not be what consumers are looking for. We all remember our high school days when the cool kids weren’t always so nice. That has transferred over to social, where some brands have taken to mocking their customers or their competitors on this public forum. What worked for Wendy’s in terms of social popularity does not transfer to every business. In fact, according to Sprout Social, “While 75% of consumers believe there’s value in brands exhibiting humor on social, only 36% are willing to purchase from brands they believe are funny.” The following shows that of all brand behaviors, making fun of customers or competitors on social is least cool. Authenticity: Authenticity was voted as the most admired trait of a business on social. Like what we’ve seen from celebrities for years, consumers respond well to businesses that are transparent and real with their fans; your followers want to see more of who you are – your brand personality – in your social media content. Sprout

Social defines brand personality as “what connects your product to its consumers. It reflects what your brand stands for and should be the bloodline that runs through all of your marketing and creative initiatives.” Responsiveness: Not only are consumers interested in what kind of content you put out there, they are also increasingly interested in how you engage with them. The #1 behavior on social media that influences a consumer’s decision to make a purchase is responsiveness to comments. Depending on the size of your community, you may not be able to respond to every follower’s comment, but it is important to make this a priority when managing your social accounts. What’s at Risk: Consumers and social media users alike are pretty fickle when it comes to brand loyalty. Be careful when experimenting with humor or other edgy types of content; users generally apply a “first strike, unfollow” rule when it comes to their relationships with brands on social. The more businesses that create and promote social media pages, the less time a consumer will spend deciding whether to follow or unfollow a brand – they’ll just do it. What Should You Do: Our takeaway from this data: stay true to your business’s values and focus on what you can control, such as great content, engagement, and customer care. Above all else, your community wants to be appreciated, and there are millions of opportunities on social media to show them you care!

LINDSEY WREGGELSWORTH is the marketing manager at Commercial Web Services, a division of Trader Interactive, which specializes in providing commercial dealers and manufacturers with products and services to establish and grow their online presence in today’s market. February 2018 | Construction Equipment Distribution | www.cedmag.com | 37

How to Offer Real Added Value Without Sacrificing Your Profit

Help your customers see

VALUE over

COST

It’s not just about selling. It’s about communicating with your customers and sales team to determine the best ways to add value to your product or service without lowering your price so much that you can barely make a profit.

ired of defending your price? Upset with having to lower your price to get the order but pricing the product or service so low you are not making a decent profit? Maybe you need to start looking at this the other way around. Even though rising costs are driving your prices higher, you cannot focus on price alone. If you do, your customer will too. Instead, rethink your entire sales approach. Draw attention to the quality of your equipment, your service department and the value-added offerings that your organization can provide that set you apart from your competition.

Staying realistic in today’s world By Christine Corelli

I realize competition is fierce and everyone is concerned about cost. But do make every effort to move your customer away from being concerned about cost to recognizing the intrinsic value that only your company can impart through your equipment and service departments. The reality is that customers are also very interested in the quality and longevity of the products they purchase and the higher level of service your company can provide. That’s true regardless of price. In fact, some of the healthiest segments of the market today are in the high-end (high price associated with quality) product arenas.

The real approach to value-added selling

The answer is a renewed commitment to value-added selling. This is not new and it is not simple. In fact, if asked, most companies would say that they are already a value-added selling organization. The truth of the matter is that those same companies often pay lip service to the concept of added value. Just because they say it doesn’t mean they actually do it. According to noted author and sales trainer Tom Reilly, who was one of the early advocates of the concept two decades ago, “Value-added selling is a philosophy and a process; it is strategic and tactical…it is more than a fad, it is a mindset, an attitude, and a paradigm deeply rooted in your psyche and demonstrated daily in your behavior.” February 2018 | Construction Equipment Distribution | www.cedmag.com | 39

In today’s environment, where so many products are viewed as commodities and where there is intense competitive rivalry, adding value is not optional. It is critical to long-term success. Smart dealers and their sales teams continuously look at how they serve their customers. They determine how to add value to what they sell or offer to separate themselves from their competitors.

Value added is the best way to differentiate

Every product and every service can be differentiated in the customer’s mind. Even in today’s world, the customer is often willing to buy based on the value they believe is inherent in the product or service, even if it is at a slightly higher price. To set yourself apart, determine the appropriate value criteria and then communicate them loud and clear. Which benefits do your customers value the most? Reliability, dependability, workmanship, fast service and reduced downtime.

Listen to your customer to determine value drivers

It is what the customer wants – not what you think the customer wants – that determines value. Before you can identify how to add value or be able communicate it, first identify value drivers for each customer. Listening to customers is certainly not a new idea. However, many companies rely on market research instead of going directly to the source. And although the most successful dealers routinely make customer visits, they often focus on the largest ones. Consequently, their conversations simply do not go far enough to thoroughly understand the customers’ concerns and problems at all levels. The wise company knows that all customers, regardless of size, are important. Asking great questions will give you the information you need to get started. They should be imaginative and probing to help you internalize the customer’s problems, issues, concerns, and disappointments, as well as their successes. Phone and visit as many customers as possible. Conduct focus groups and do formal surveys as well. If you are a manufacturer who sells through distributors, talk to your customers’ customers as well. In addition to talking to customers, your sales staff, based on what they hear in the field, should be able to identify at least ten things that your customers want. Ask your sales team the same questions you ask your customers. Talk to your service reps and learn what they are hearing as well. By viewing the situation from many different angles, you will be able to find out what is most important to customers. ▶ “How do you think our company is viewed in the industry?” ▶ “What can we do to improve our level of service?” ▶ “How can we increase the value of our services?” ▶ “What can we do to make it easier for others to do business with us?” ▶ “What would make you say “Wow?” ▶ “What questions would you like to ask us?” ▶ “Are there any questions I haven’t asked that I should be asking?” Determine how your equipment and service departments will positively impact your customers’ business. Involve your office manager and service manager in determining ways in which the customer experience can be enhanced.

Consider using a value management objective process

Some companies use the VMO (value management objective)

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process in which performance criteria are set and evaluated by the customers themselves. Businesses and customers reach agreement on priorities, action, and outcomes. Then they take action! Below are just a few examples of how businesses have learned to provide value: ▶ Speed of service or delivery One way to add value and differentiate your business is to guarantee on-time delivery or even faster turnaround than your competition. Industrial distributors are well aware of the importance of speed. For example, a crucial part of the service that buyers are seeking is speed in getting replies to questions and confirmation of shipments. Construction equipment dealers also know that when a machine goes down on a job site, their ability to get a service tech on-site fast is the critical factor in preventing loss of time and money on the project. They offer 24/7 tech service, since many construction companies work outside the basic nine-to-five time frame. In addition, manufacturers are now offering live chat and instant messaging to help technicians and users obtain technical information quickly. ▶ Education and service above and beyond the competition Another example comes from a construction equipment distributor that has a value-added service practice that few others have. When a machine is to be delivered, they instruct the buyer to block out three to four hours for the “delivery presentation.” During this period, the salesperson and a service technician educate the buyer. Usually, the construction company president, the equipment operator, and the mechanic are included, and lunch is provided. The salesperson and the tech make a thorough one-hour presentation on the machine’s features and benefits. The next hour is spent on critical safety aspects and procedures, and the next hour on maintenance. They allow the last hour for Q&A. A few hours after leaving, the salesperson makes a follow-up call to ask if there are any further questions. The salesperson and the service tech call again two days later to ask if they can be of further service. This is a great example of a value-added practice. In addition, it helps to build profitable relationships. ▶ Free shipping, delivery or installation Imagine a customer asking what the charge will be and being told there will be no charge, it is just part of the service. This is how you delight the customer. This is value added. Keep in mind that if you are going to go the extra mile for customers, it does cost. Make sure not to do anything without sufficient ROI. ▶ Unique and desirable product features Even though identification and prioritization of new features is a critical and daunting task, it can determine the success or failure of your product. Product managers, in particular, love to add features. Below are four basic questions you should ask to ensure that the added features will make a difference in sales: 1. Will your feature solve a particular problem for the customer? 2. Is the feature one that others have failed to add? 3. Will you be first to market the feature? 4. If the customer has a choice between your product and a competitor’s, will this feature make the difference in the sale? 5. What features provide real benefits? ▶ Sales training If you are a manufacturer who sells through distributors, you can add value and increase your sales if you provide sales training. Most companies offer extensive product training, including presentation

Loyal customers become loyal because of having a relationship with someone they can trust. of features and benefits. Often, however, they do not provide sales training, especially on value-added selling skills and consultative selling. The most important area is often left to sheer instinct and personal style. Training is the key to success. ▶ Frequent fliers, frequent buyers The concept is simple. The more often someone brings their equipment in or buys parts from you, the more service, benefits, better pricing, and related perks they should receive. It’s the same idea as frequent flyer miles with an airline. If you have a rental business, you can give price reductions for long-term rentals, or even provide rent-to-own options. Any business can do it—and it is good for business! ▶ Security of supply Peace of mind and risk avoidance are value-added components. Keeping abreast of market conditions and continual communication with the customer will help provide a level of buyer comfort that is really appreciated these days. ▶ Longer warranties, after-sale service, and superior service policies If you are a manufacturer, one of the most important valueadded services is the provision of warranties that extend to the life of the equipment. This is still a major draw for buyers. A material handling and construction equipment distributor who is known for world class service has a “no questions asked” policy. If anything goes wrong with the new equipment in the first couple of months after purchase and their tech cannot fix the problem, they ship a brand new machine to the job site; this practice costs money, but provides enormous peace of mind to a construction company owner. It also breeds extremely high levels of customer loyalty, and is, indeed, value-added. ▶ Value-added conversations Customers ask for quotes or prices based on their understanding of your products or services. They do not necessarily consider your “value-added” options. The most important job you have is to educate the customer, not only on features and benefits, but also on the additional benefits that make buying your product or service the best decision.

▶ Little things make the difference There are so many simple ways that dealers can add value. Businesses don’t do business. People do business! It’s all in the relationship. This holds true for every business. The critical underpinning of all selling situations, especially value-added ones, is the relationship between buyer and seller. This is true in remote buying situations where the relationship is established through brand loyalty, and in situations where the buyer and seller sit face-to-face and develop a strong personal bond. Loyal customers become loyal because of having a relationship with someone they can trust. This is as high a priority as fair price. Value-added salespeople work hard and use many techniques to enhance their business relationships. If you are in sales, listen more than your competitors. You will never listen yourself out of a customer. Become a true master of your product or service and your industry. Strive to provide more knowledge, more expertise, and a higher level of service than your competitors. Position yourself as the “go-to” person for your customers and potential customers. Help your existing and potential customers – even when there’s nothing in it for you. These are all value-added contributions to your customers. They help to build long-term relationships, increase your ability to obtain quality referrals, and increase word-of-mouth advertising.

The bottom line

Based on my experience working with some of the most successful manufacturers and dealers, adding value and providing a superior level of service is not optional; it is critical to the success of your business. Develop an obsession to deliver the highest level of service with every customer, every day. Now is the time to communicate your value-added offerings and not to lower your price to where you barely make a profit. Instead, partner with your customers and work with them so that the price is fair and affordable to both. Help them more than they ever dreamed possible. The advantages are many and there is absolutely no downside. Most important is the opportunity to create and sustain a competitive advantage in today’s changing times.

CHRISTINE CORELLI is a conference speaker, columnist, and author of five business books, including the best-selling Wake Up and Smell the Competition and Capture Your Competitors’ Customers and KEEP Them. Visit www.christinespeaks.com, or call 847-581-9968. February 2018 | Construction Equipment Distribution | www.cedmag.com | 41

Major Heavy Equipment Recapitalization for Canada’s Military By Lauren Kutchaw Bluesky Strategy Group ith the release of the longawaited National Defence policy review this past summer, most eyes were on multibilliondollar marquee programs – advanced fighter jets, warships, Arctic defence and the mental health care of soldiers suffering from PTSD. But Defence Minister Harjit Sajjan’s new Strong, Secure, Engaged defence policy is committed to a much broader range of equipment upgrades for the men and women in Canada’s armed forces. With guaranteed funding for dozens of major programs over the next 20 years, the government is determined to provide an orderly investment in equipment upgrades to allow the military to function properly. Included in this spending commitment are several major heavy equipment renewal programs for the army and the air force. Specifically, the new policy identified logistical vehicle modernization, enhanced recovery capability, and snow and ice control capability recapitalization projects as key areas of focus. For the army, National Defence will roll out a plan to replace existing logistics vehicles with newer or different models, including Light Support and Heavy Logistics fleets with new trucks, tractors, trailers, kitted truck bodies, integrated bulk material handling systems, and bulk fuel and water containers. They will offer a multitude of capabilities including the following: ▶ All-terrain rapid firefighting, rescue, and extrication ▶ Heavy and lightweight cargo handling ▶ Domestic and expeditionary

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training and operations It is anticipated that these vehicles will be approved between 2018 and 2019. The projected preliminary cost will be between $500 million and $1.5 billion. These vehicles will also have considerably enhanced recovery capabilities, including wrecker and recovery configurations, and will include new technologies to ease recovery efforts of new heavier armoured fighting and logistics vehicles that cannot currently be recovered safely. National Defence further earmarked better snow and ice control by replacing fleet vehicles with more advanced machinery for the air force. The Snow and Ice Control Capability Recapitalization Project will replace 96 pieces of essential heavy-duty equipment including snow plows, sweepers, aircraft de-icing, and snow-blowing vehicles, all of which are critical to Royal Canadian Air Force winter operations. The preliminary costs associated with the project are in the range of $50 million to $99 million. The current milestones projection includes implementation by May 2018, contract awarding as soon as August 2019,

and full operational capacity by May of 2022. Currently, the Snow and Ice Control Capability Recapitalization Project is in an option analysis to determine the best course of action for essential snow removal services. In addition to vehicle updates and social support service increases, National Defence has also included a commitment to reducing greenhouse gas output, meaning they will be looking to procure newer, more efficient equipment. The Defence Energy and Environment Strategy (DEES) acts as an environmental extension to Canada’s new defence policy, reaffirming the commitment to energy conservation and environmental sustainability. This energy-efficient extension includes targets and considerations for commercial fleet vehicles when appropriate for operational needs. Major procurements such as these often require suppliers to provide industrial technology benefits (ITBs) equal to the value of the final contract. These ITBs are a combination of direct and indirect sourcing of goods and services in Canada – this can mean equipment components, parts or

modifications sourced in Canada on the required equipment (direct), or provision of work for Canadian companies on another program or product line in the supplier’s chain or an investment in research and development, training, or other opportunity of value (indirect). There can also be a Value Proposition requirement requiring a percentage of the value of the contract to be invested in a priority area of focus for the Canadian Armed Forces. Value Proposition requirements are determined on a case-bycase basis. Engagement with suppliers typically begins with a request for information (RFI) issued on the government’s procurement web site www.buyandsell.gc.ca. This is also the site for tender opportunities for all government departments. It is worth registering on the site, creating a profile and keeping an eye on the many smaller procurement opportunities, which range from one or two pieces of equipment to contracts for maintenance and service. For more on Canada’s defence policy, visit dgpaapp.forces.gc.ca/en/canadadefence-policy/index.asp.

ADVOCATE. INFORM. IMPACT. There’s too much at stake for your company and the industry not to attend the 2018 AED / EDA Washington Fly-In, March 20-22 – the equipment industry’s premier public policy event.

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THE

EMPLOYERS RECRUITING NEW TALENT THROUGH SOCIAL MEDIA

By Karen Algeo Krizman Love it or hate it, social media has become a valuable tool in the search for new technicians. Facebook alone has two billion active users each month, according to a June 2017 report from CNBC news. Trailing far behind are Instagram at 700 million users each month, Twitter at 328 million monthly users and Snapchat at 166 million users. Then there’s LinkedIn, the “professional’s” social media channel, with 500 million overall users as of April 2017, according to Fortune magazine. All those users aren’t just posting selfies and stalking their exes online, either. The Aberdeen Group research firm reported that 73 percent of millennials (defined by the Pew Research Center as those between the ages of 18 and 34 as of 2015) found their last job on a social networking site. In other words, if you’re not using social media to help in your search for skilled technicians, you’re missing out on millions of potential candidates. However, for those equipment dealers who already are using social media for recruiting, the outcome has been somewhat disappointing. “We are getting some response, but it’s not necessarily what we’re looking for,” explained Santiago Bautista, a recruiter for Road Machinery based in Phoenix. “We receive a diverse group of individuals who apply for various jobs, like a chef applying for a mechanic’s position. Whether LinkedIn or Facebook, it’s relatively the same outcome. It really is hit-and-miss.” Likewise, Randy Fetterolf, of Cleveland Brothers in Pennsylvania, said, “Candidates tend to be entry level. We can’t reach those that have the 5- or 10-year experience level using social media.” Those in the equipment distribution industry aren’t the only ones reporting mixed reviews with social recruiting, according to an article in Strategic HR Review. That resource concurs, along with numerous HR professionals, that the key is to use the right social media in the correct way to reach your targeted audience. To begin with, not all social media platforms are created equal. For instance, if you’re trying to reach millennials or even younger generations, AdWeek recommends you use Snapchat over Facebook and Instagram instead of Twitter. That doesn’t bode well for Facebook, which in early 2017 announced a new feature allowing users to post jobs on their business pages and target them to certain demographics. The company then followed up in September 2017 by partnering with

ZipRecruiter, a job listing aggregator, to allow employers to click a box and broadcast job postings to a wider audience beyond just those users who follow their business pages. AdWeek points out that Facebook is now “a popular social media platform for parents and a handful of digital-savvy grandparents.” Younger generations are “looking for a new platform to avoid those embarrassing comments from mom and dad.” Fetterolf has seen the decline of Facebook firsthand while speaking to students at area high schools and technical centers. “In the past five visits, I’ve actually polled my audience as to what social media they use,” he said. “At the most, I’m getting three people that use Facebook out of a class of 20. Most of them are using Snapchat and Instagram.” As AdWeek points out, millennials are very visually oriented. Their preference for images and videos over words explains why they find Snapchat and Instagram so appealing. To make the most of Snapchat as a recruiting tool, look no further than Taco Bell and McDonald’s. They and other companies buy geo-targeted sponsored visual stories and link them to their websites’ career pages. Snapchat also offers Campus Stories, which allows users near selected schools to post and view stories. And then there are Snapcodes for those with little to no budget for recruiting. Snapcodes allow companies to create an online code that can be placed just about anywhere. Snapchat users can take a photo of the code, which uses the app to redirect them to the business’s website. Workable, a recruiting software maker, recommends that companies interact regularly with their Snapchat followers, share their company’s brand and culture through their postings, and be creative with visuals, yet keep it “raw.” Perfect pictures and videos aren’t required, as long as what you share gets the point across: that you’re hiring and that your company is a good place to work. If you’re recruiting on Instagram, Workable suggests putting more effort into your visuals while, again, always promoting your brand. No clickable links are allowed on Instagram photos, so if you want to send job candidates back to your career webpage, include links in your user profile or your photo captions. Ultimately, if you want to recruit new technicians using social media channels, you’re going to need time – not only to become technically savvy but also to nurture those online relationships. “It’s working,” Bautista points out. “I’m sure if we dedicate more time and more resources to it, then things are bound to turn around.” February 2018 | Construction Equipment Distribution | www.cedmag.com | 45

PART OF THE SMART

Head of Walsh Equipment Named One of Pittsburgh’s Smart 50 By Karen Algeo Krizman harlie Walsh of Walsh Equipment in Pennsylvania was recently named a recipient of Pittsburgh’s 2017 Smart 50 Award. Bestowed by Smart Business Pittsburgh magazine, the honor is given to top executives who make a positive impact on the region’s economic success by being innovative and contributing to the area’s ongoing sustainability. “As the third generation of a family business, sustainability is

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very important to me for the sake of our employees and customers, and for leaving a legacy that had previously been established by the prior two generations for 85 years,” Walsh said. “(The award is) a nice acknowledgment of my career so far, that in 10 years my leadership has made a difference.” Started in 1932 by Walsh’s grandfather, Walsh Equipment originally focused on the corrugated metal pipe business. The company eventually expanded to include construction, road maintenance and truck equipment, with Walsh’s dad, Mike,

taking over in the early 1980s. “I grew up in the company, grew up working on Saturdays and during the summers,” Walsh recalls. “It was a small family business and very much a passion for us. It was the key to providing for our family and the families of our employees.” After finishing law school, Walsh officially returned in 2007 to help grow the business, working closely with his dad. “I worked with the sales guys and learned the blocking and tackling of construction equipment – first sales and then operations,” he said. “The market dictated some of our growth. I came into the business in ’07, and then ’08 and ’09 were very challenging years. So we worked doggedly not to participate in the recession.” As luck would have it, the energy business came to western Pennsylvania in 2010-2011, which sent the company’s growth into overdrive. By 2017, Walsh Equipment had two stores in western and central Pennsylvania. Walsh worked closely with his father the first few years to learn the ropes and eventually took over the day-to-day management of the business. He was named president of the dealership in 2012, with Mike remaining for a few years to make sure everything stayed on track. “We worked very hard and diligently with our employees, manufacturers and our customers, Walsh said. “We were a real success story. We were fortunate, entrepreneurial and hardworking.” With his dad ready to fully exit the business in 2017, Walsh decided to think outside the box about the company’s next phase. “We began to look at what would be best for our stakeholders – the employees, ownership, and customers,” Walsh said. “As we looked at it, we realized we had hit a critical size where we could either continue growing on our own organically at our own pace, trying to add additional product lines and territories, or we could find a strategic merger that made sense and accomplished our goals for the business more quickly.” In the summer of 2017, Walsh Equipment became part of Stephenson Equipment Inc., based in Harrisburg, Pennsylvania. “We’ve known Stephenson for 30-40 years and represented many of the same manufacturers,” Walsh said. “They were in eastern Pennsylvania with a lot of the

same lines. We started having conversations with them and things started to fall into place. They had crane territory already in Pittsburgh and western PA where we hold construction equipment territory. As we talked through it, we thought it would be a win-win situation, and it’s proven to be for our customers, our employees and the OEMS.” While his dad has officially retired, Walsh remains as a board member of Stephenson, as the vice president in charge of the Walsh division, and as a minority shareholder. “We’re looking for opportunities to merge our processes, and our employees are very much on board,” Walsh said. “They’ve been enthusiastic and helpful. Culturally, the two businesses are very aligned. SEI is full of great, hardworking people who support the customer, which is the backbone of a great dealership. They have tremendous talent with some of the best and smartest people I’ve met in the industry.” Unlike with some mergers, there were no redundancies when Walsh Equipment and Stephenson got together. Collectively, the company now has eight locations with 185 employees and is actively looking to hire more people. “It’s absolutely a growth play, a strategic alignment between the two dealerships;

and it will continue to grow,” Walsh said. “A key consideration from the beginning has been the legacy Walsh employees, and this will provide them with a lot more opportunities.” As for his Smart 50 Award, Walsh looks at it as a milestone to commemorate his first decade in the family business. “I see it as a benchmark for the first chapter of my career,” he said. “Now I have the opportunity to continue that legacy of innovation and growth, caring for employees and customers.”

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AEDâ&#x20AC;&#x2122;s Rental Operations Survey Participants report reaping 40 percent of revenue from rentals, but few providing online equipment reservations By Frank Manfredi AED asked me to conduct a survey of its members to assess their current view of the equipment rental business, whether they participate in the rental business, how they operate it and their long-term view of the market. I conducted the survey over a period of a few months with the assistance of the AED staff. I believe the opinions and results can be used as a proxy for all AED members that are involved in the rental business. This article is a summary of the survey results with my comments and observations. It should be noted that our respondents were dealership persons

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who are involved with rental operations. Therefore, some of the answers differ from those of other AED surveys, such as the Cost of Doing Business Survey where the respondents are primarily on the financial side of the business. This is the fifth rental study I have conducted for AED. The first one was the groundbreaking Rental 2000 written in the late 1990s. In the late 1990s many of the people involved in traditional dealer equipment sales activities did not believe the equipment rental segment would ever grow enough to influence the sales of new machines. Few people today would challenge the notion

that equipment rentals have become a major North American channel-to-market for many types of construction equipment products. In fact, the equipment rental business is growing and is expected to continue growing. Interestingly, our respondents indicated that currently 40 percent of their revenues are from rentals. They indicated that over the next three years they expect to increase their machine fleet utilization, which, of course, will increase their top line rental sales volume. In addition, they expect to increase their market opportunity, by growing geographically or through the expansion of their fleet, to include more product categories. Our respondentsâ&#x20AC;&#x2122; rental fleets increased as much as 25 percent. Most of our respondents operate four or more locations and offer their full range of services, including machine sales, parts,

service and rentals, at all their facilities. Most of our respondents employ 20 people or fewer. I was interested to learn that very few of our respondents can accept online equipment reservations. There has been a debate in the industry over whether rental operations should be separated from the equipment sales side of the business. The theory is that a focused rental operation will generate more rental business and that selling rentals to equipment users at the same time they are selling new machines detracts from both selling efforts. Only 30 percent of our dealer respondents separate their business. Apparently, selling both is not as much of a distraction as it was thought to be. Salary plus commission is the method used by most of our respondents to compensate machine and rental salespeople. February 2018 | Construction Equipment Distribution | www.cedmag.com | 49

Renting equipment has the immediate effect of increasing the time and financial utilization rate for those rental products, which in turn increases demand for parts and service. Over time it also has the effect of decreasing demand for new equipment sales. I have observed both of those trends during the past 10 years. In fact, our distributor survey respondents reported that their highest financial utilization rates are for compact equipment and larger earthmoving equipment, as well as compaction products, air compressors and portable lighting equipment. One of the reasons that rentals have become more popular among equipment users is that equipment manufacturers have aggressively raised their new equipment prices in response to the high cost of conforming to U.S. EPA-mandated engine emission regulations. I estimate that over the past five to seven years the regulations have increased the cost of diesel engines by 25 to 35 percent. Manufacturers have passed on those increased costs. This was confirmed by two-thirds of our survey respondents, who indicated that the original equipment cost (OEC) of their fleet has increased by 5 percent over the past three years. The other one-third of our respondents indicated that their fleet OEC has gone up more than 10 percent during that period. 50 | www.cedmag.com | Construction Equipment Distribution | February 2018

Our dealer respondents partly offset equipment cost increases by increasing their rental rates during the past three years â&#x20AC;&#x201C; as much as 6 percent for most products and as much as 10 percent for some categories, such as lighting products. Expert management of a rental company fleet is key to making a profit in the rental business. The profitability of a rental business can be linked to managing information about cash flow and also to monitoring used equipment prices, depreciation, and maintenance expenses and using that information to sell used machines before they cost too much to operate, and then replacing them with new or younger machines. There is computer software that keeps track of most of those factors. Our distributor respondents are using both engine hour meter readings and the number of months a machine is in their fleet. If utilization rates stay high for an extended time, our respondents add to their fleet. Lower utilization rates for an extended period cause them to reduce their fleet. Nearly 42 percent of our respondents indicated that their target hour meter reading is 2,000 hours or more, while 34.5 percent indicated they are using the chronological age of the machines and trading them out after they are 30 months old. Depreciation is handled by using a five-

year straight-line depreciation method or a percent of revenues (70 percent or 80 percent). Many of our respondents have fleets that are less than 36 months old. They indicated their optimum fleet age should be higher than 36 months. Acquiring equipment at the right price is important to the profitability of the rental operation. Our respondents indicated that all manufacturers are selling direct to rental companies, which presumably means purchase prices are lower than normal retail sales prices. The exception is larger earthmoving equipment. Usually, purchasing new machines means that most repairs are covered by the manufacturerâ&#x20AC;&#x2122;s warranty in the early life of the machine, thus reducing service expenses. Managing repair costs

is important to profitability. A large portion of major repairs is handled within the dealer service department. If a rental company has a territory in which to sell those machines, and the manufacturer sells to other rental companies in his territory, then the rental company is usually paid a fee of up to 5 percent by the equipment manufacturer. The future of the rental business is indeed bright. Our respondents all concurred with that statement; however, they all agreed that the biggest impediment to future growth is their capacity for handling financial risk. Finding skilled people will also limit growth. February 2018 | Construction Equipment Distribution | www.cedmag.com | 51

THE RIGHT STUFF

The AED Foundation Launches Technician Certification Program and Certifies First Six Technicians By Megan Mattingly-Arthur he AED Foundation officially launched its Technician Certification Program in an announcement given by AED Senior Vice President and CFO Jason Blake at the AED/EDA 2017 Workforce Development Summit in New Orleans in September. The certification program, which is the first of its kind for the construction equipment industry, recognizes heavy equipment technicians for their expertise and gives dealers an objective way to measure their technicians’ skills and knowledge – which can help attract customers and increase their confidence in a dealership’s service operations, according to The AED Foundation Vice President of Foundation Operations Steve Johnson. “Other industries have had certification possibilities for technicians for a long time, but there simply hasn’t been a certification available to recognize technicians who work on construction heavy equipment,” he said. “The Foundation felt there was a need for something that shows people that these technicians have the skills and knowledge to do the job, that they’ve kept up with current technology, and that they’ve taken an assessment offered by an objective thirdparty organization to gain a professional credential. For dealers, the certification program provides an objective measure of technicians’ qualifications – that’s something that’s marketable to customers and it can

McCann Industries President and CEO Jim McCann speaks to a group of employees about the importance of The AED Foundation's Certified Technician Program.

help raise the technical bar at dealerships.” Chicagoland-area dealership McCann Industries, Inc. was the first to put its technicians through the certification program – all of whom passed with flying colors – and company President and CEO Jim McCann was quick to tout the program’s potential benefits for both dealerships and the industry as a whole. “McCann Industries supports the mission of The AED Foundation to advance professional education and workforce development in the equipment industry,” he said. “We recognize the increasing challenges

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of drawing diesel technicians to our industry. Any way we can advance the careers of these technicians, we support. At McCann, we pride ourselves in having great technicians – these individuals bring a set of skills to our organization that’s indispensable. The AED Foundation certification gives us something concrete to hang our hats on and point to that clearly backs up McCann’s belief that our technicians are solid in their knowledge base.” Six of McCann Industries’ technicians completed the program, which includes a 160-question technical assessment focused

Congratulations on Certification!

From left: Glen Hayward, VP of Operations, David Cichowicz, Technician Recipient, Mike Hart, Branch Manager, and Rich Hoffmeyer, Product Support Manager â&#x20AC;&#x201D; McHenry Location

From left: Nick Hamstra, Technician Recipient, Jim McCann, President and CEO, McCann Industries

From left: Craig Cisek, Technician Recipient, Jim McCann, President and CEO, McCann Industries

From left: Steve Shanesy, Technician Recipient, Jim McCann, President and CEO, McCann Industries

From left: Mike Hillier, Technician Recipient, Jim McCann, President and CEO, McCann Industries

From left: Pat Peterson, Technician Recipient, Jim McCann, President and CEO, McCann Industries

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on core construction equipment technical standards: diesel engines, electrical and electronics, hydraulics and hydrostatics, power trains, air conditioning and heating, and safety and administration. All came away with different thoughts on the experience. “The credential gives me the proof that I have the skills and knowledge it takes to serve the company and customers – and any and all certifications can only help you grow as a technician and build a wellrounded resume,” McCann Technician Nick Hamstra said. “Being at the forefront of the industry and paving the way for growth and innovation was one of my favorite things about being one of the first to go through the program.” Technician Mike Hillier agreed: “It was really cool being a ‘test pilot.’” He added, “Technician experience will help you successfully navigate the certification assessment.” Technician Craig Cisek praised the longterm benefits the certification will provide him and other technicians who complete the program. “Lifelong experience benefits you as a technician, but it is nice to be recognized as a technician with the required knowledge. Certification benefits you through the rest of your life. If you have an aptitude, the construction equipment industry is a great career choice.” Several of the technicians stressed the difficult nature of The AED Foundation Technical Assessment. According to these newly certified technicians, it requires a great deal of practical knowledge and experience, so those planning to complete the program should study, and study hard.

How to Get Your Technicians Certified

Technicians can complete The AED Foundation Technician Certification Program in one of two ways. Those who have already taken The AED Foundation Technical Assessment can buy the certification and upload the test results sheet, and those who have not yet taken the test can do so by purchasing the certification package. The assessment has a hurdle rate of 70 percent (meaning that you must receive a score of 70 percent or greater to pass) and technicians have two chances to pass. Those who pass will receive a certificate in a wooden frame, as well as a wallet card, hat, lapel pin, two shirt patches and two tool box decals. The certification program is available for $150 per technician for AED members or $300 per technician for non-members. Those who have already passed The AED Foundation Technical Assessment can purchase an application for certification for $85 per technician.

“This certification is not easy,” said Technician Dave Cichowicz. “For example, I have no A/C ability and there were several questions I needed to study for. It’s not easy and takes industry knowledge, but it will benefit technicians – and any OEM training you can get will help.” Technician Steve Shanesy concurred: “Practical experience is necessary. It is a challenge, but years of experience will help.” For those who have the experience, gaining the credential is a welcome recognition of all their hard work and service, according to Technician Pat Peterson. “It takes experience, and entry level people will have difficulty. My advice: Rely on your experience and knowledge, and keep trying, because there is a lot of information.” McCann hopes that, by highlighting the many positive aspects of heavy equipment technician careers, The AED Foundation Technician Certification Program will

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benefit the industry as a whole, and he encourages other dealers to take the steps necessary to certify their technicians through the new program. “We clearly support The AED Foundation Technician Certification Program and encourage dealerships to reach out to The AED Foundation staff to start the process of technician certification within their organizations,” he said. “The more focus we can put on highlighting the positive aspects of diesel technician careers, the better it will serve our industry as a whole.” For more information on The AED Foundation’s Certified Technician Program, visit aedfoundation.org/certifiedtechnician-program. The AED Foundation is also on Facebook and Twitter. To learn more about McCann Industries, visit https://mccannonline.com. McCann Industries is also on Facebook and Twitter.

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February 2018 | Construction Equipment Distribution | www.cedmag.com | 55

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AED PREFERRED PROVIDER

Sentry Insurance’s Tips for Proactive Risk Management A small incident turned into something large because a formal reporting and investigative procedure was not in place.

Q: Why do some seemingly small losses become so large? A: Let’s set the scene. A dealership salesperson is walking across the lot when he twists his ankle on a crack in the asphalt, causing him to fall on his hip. The incident is reported to the sales manager, but the employee indicates he’s fine. Nothing further is said or done. Two weeks later, the general manager learns the employee has been diagnosed with pelvic and ankle fractures, which eventually leads to sedentary restrictions. The dealership does not accommodate the restrictions, eventually resulting in a legal settlement with the employee, with losses totaling $290,000. A small incident turned into something large because a formal reporting and investigative procedure was not in place. Also, dealership management didn’t view risk management as anything more than an administrative task for support staff. The result was a much costlier resolution for the dealership than it could have been. Preventing losses is the ideal situation, but it’s not always possible. However, dealerships can help control losses by proactively defining the investigation, reporting, and implementing ongoing case management guidelines. This applies

to all types of losses, including—but not limited to—employee accidents, equipment damage, theft, and vehicle accidents. The following is recommended: ▶ Evaluate claim reporting/investigation guidelines: Ensure written procedures include a comprehensive form to report incidents and requirements outlining timeliness, investigation, hazard reduction, and notice to claims for handling. ▶ Enforce a duty program: Documentation and enforcement of the program should go through the dealership’s management staff and be an annual performance goal for all management levels. ▶ Implement an action plan: This will help manage loss prevention initiatives requiring capital investment, broad participation, or extended timeframes to implement. ▶ Hold all accountable: All employees need to report accidents in a timely manner. No dealership wants to experience a loss. With a plan and investigative guidelines in place, along with strong managerial support and supervision, losses can be controlled. Make sure your dealership is ahead of the curve when it comes to proactively managing claim cases.

As the endorsed P&C carrier for AED, Sentry Insurance offers great coverage options and services to meet your dealership needs. ERIC STILES is Sentry’s lead Account Executive responsible for maintaining the AED/ Sentry relationship. 56 | www.cedmag.com | Construction Equipment Distribution | February 2018

Let’s talk about attracting and retaining employees It’s no secret that a 401(k) plan can help you get and keep quality employees. But it has to be right for you, too. Through open, ongoing dialogue, you’ll benefit from our experience. And we’ll work together to identify the right solution for you. Don’t go it alone. Let us guide you, so you can invest more time boosting your bottom line. Right By You

Let’s get the conversation started. Learn more about how we can help you with retirement planning and increase confidence in your plan at Sentry.com

Property and casualty coverages and safety services are underwritten and provided by a member of the Sentry Insurance Group, Stevens Point, WI. Individual life insurance, group and individual annuities and group products are issued and administered by Sentry Life Insurance Company, Stevens Point, WI. In New York, individual life insurance, group and individual annuities and group products are issued and administered by Sentry Life Insurance Company of New York, Syracuse, NY. For a complete listing of companies, visit sentry.com. Policies, coverages, benefits and discounts are not available in all states. See policy for complete coverage details. In New York coverage provided through policy form numbers: (Life insurance) 585-3000-01, 390-1000 (SLONY), 390-2003-SLONY; (Disability) 685-9000-31; (Dental) 785-7000; (Group Annuity) 840-300(NY); (Individual Annuity) 380-440. Short-term disability insurance is not available in New York. 73-710A

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