January 2015
CED Construction Equipment Distribution Published by AED: Business Fuel for a More Profitable Dealership
Hot Stuff Business Outlook Report: Recovery finally gaining steam.
n Canada’s Wind Energy
Outlook strong for
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n Where to Start?
Showing Congress the right path
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contents CED Magazine | January 2015
www.cedmag.com
vol. 81, No. 1
>> FEATURES
27
CONDEX Preview Show Stoppers! There’s only one great show exclusively designed for North American equipment distributors and their suppliers, and it’s coming to Orlando in February.
38 Recovery’s Got Legs in Orlando, Some Shaky Knees, Too
50
As AED Summit prepares to descend on Orlando, a seven-year DOT project will soon begin, allaying doubts over the housing sector.
Cover Story:
Hot Stuff
Construction Recovery May Finally Gain Steam in 2015
Economists, distributors confident momentum is here to stay.
>> DEPARTMENTS
12 » AED hp 18 » Industry Beat 24 » Data Trends 79 » Ad Index
52 Green is the Scene
Wind energy sector isn’t blowing smoke, but oil/gas hasn’t gone underground.
56 Everything Old is New Again We’re not letting the big fat important issues sit in the corner. AED holds up its strong legislative agenda for the new GOP-dominated Congress – and will hold lawmakers’ feet to the fire for swift action.
3 | www.cedmag.com | Construction Equipment Distribution | January 2015
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>> EDITORIAL TEAM Executive Editor and Director of Programs KIM PHELAN kphelan@aednet.org Contributing Editor JOANNE COSTIN pr@aednet.org Graphic Production EVA BELMONTE eva@neggie.net
>> COLUMNISTS
contents CED Magazine | January 2015
vol. 81, No. 1
>> COLUMNS
07 » From the Chairman
This is what elbow grease looks like.
GARRY BARTECKI Financial Consultant Dealer-Rental Succes LLC
09 » Editor’s Note
STEVE CALECHMAN Journalist
25 » Money$$$Man - Nothing obvious about 2015,
KARLA DOBBECK Human Resource Techniques RON HODGEMAN WTP Exchange CHRISTIAN KLEIN AED Vice President of Government Affairs ELI LUSTGARTEN ESL Consultants TROY OTTMER Doggett Heavy Industries STEVE PIERSON Seldon Fox
>> ADVERTISING CONTACTS Vice President–Sales/Publisher DAVID W. GORDON 800-388-0650 ext. 334 dgordon@aednet.org Advertising Sales Manager ALBERT J. RAMIREZ 800-388-0650 ext. 311 aramirez@aednet.org Production Manager MARTIN CABRAL 800-388-0650 ext. 313 mcabral@aednet.org Since 1920 Official Publication of
www.aednet.org 600 22nd Street, Suite 220 Oak Brook, IL 60523 630-574-0650 fax 630-574-0132
Using our powers for your good
but we can make some educated guesses.
69 » CFO 411 – Congress takes the easy way out on “extenders.”
Maybe they’ll learn from the past in 2015.
Holidays over, but lyrics repeat, sort of.
Get your facts straight, then call.
71 » In the Market – All is calm, all is bright? 73 » Problem Solved - Got bad news for the customer? 80 » Easy Wins
When you exhibit at a trade show, plan ahead.
>> PLUS
48 » Regional Directors Sum Up
Their Slice of North America
60 » Ten Truths to Build Product Support Excellence
64 » Play It Safe: Speak Loud and
Clear on Safety This Year
76 » Good Company:
Terramac Takes Crawler Carrier Market by Storm
4 | www.cedmag.com | Construction Equipment Distribution | January 2015
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“Having a lender that understands this industry is important – to me and my customers.”
EqUipmENT FiNaNCE inventory and fleet rental finance programs Retail finance programs Loans and leases for capital asset acquisition manufacturer subsidy programs
The right equipment finance programs are critical to helping you sell equipment. So talk to an equipment finance company that has experience in and a commitment to the construction industry — one that has the stability and flexibility to support you through all economic cycles. Not only do we know the difference between a dozer and a grader, but we understand that making the purchase process quick and easy for your customers is essential. Whether you sell equipment in the U.S., Canada, or both, we can help. To learn more about what the Wells Fargo Equipment Finance team can do for you, start a conversation with us today by calling Sidney Sexson at 480-784-9667. wellsfargo.com/construction
Please visit us in Suite 22774
© 2013 Wells Fargo Equipment Finance, Inc. All rights reserved. All applications are subject to credit approval. Canadian coverage provided by Wells Fargo Equipment Finance Company, a company that is not regulated as a financial institution, a bank holding company or an insurance holding company in Canada. MC-5533
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>> FROM THE CHAIRMAN
TIM WATTERS
We Did the Polishing, Now Come On In Under new management, AED puts renewed elbow grease into getting things done for equipment distributors.
H
ow do you like your new CED magazine? Pretty slick, eh? Kudos to AED for spiffing up the look and feel of this great industry publication! And I know that our commitment to quality content remains unwavering – in this case, you can judge the book by its cover! And just as our magazine has been given a whole new look, so has our entire association. For starters, we have a new CEO – Brian McGuire! I am very proud of what Brian has been able to accomplish in such a brief period of time since I had the pleasure to introduce him at our last Summit in January. He has already proven himself to be a sharp, focused, creative and energetic leader with great vision of where AED is going and he knows how to get us there. Brian quickly recognized that AED had lost its connection with our members, and how urgently we needed to strengthen our relationship with individual dealers, manufacturers and our associate members. Brian’s outgoing, congenial personality, coupled with thousands of frequent-flyer miles, have gone a long way toward re-establishing the personal relationships that have
long been the foundation of our association’s success. You may also have noticed there have been changes to our AED staff recently, with some great new additions! I am most excited about our new team of Regional Managers (RMs), who will spearhead our efforts to engage our members beyond the dealer principal throughout the dealer’s org chart. If you haven’t met your regional manager yet, you will soon – they are just now completing their training and are preparing to launch out across the U.S. and Canada. As the new faces of AED within their respective territories, it will be their role to guide you to the AED support solutions that are most appropriate for you and your unique situations. We are counting on these RMs also to play a key role to connect our members with their local AED-Accredited technical schools. We need to reverse the tide on our dwindling technician workforce, and AED must lead the charge in this effort!! If we fail, our industry faces dire consequences as our existing technical workforce ages and retires with no existing source of qualified technicians to fill their places. Finally, our new RMs will help close the gap between you and your elected members
of Congress! We expect them to facilitate grassroots efforts and lawmaker visits to dealers in each of their districts, and keep you informed about what AED is doing in Washington and how you can help! And congratulations to us! We are attracting more young professionals to participate in AED through our improved Leadership Academy and a new committee for young leaders to steer our programming and services; and we have engaged our manufacturer members as never before in our history through the Manufacturer Advisory Group we started in June! Nothing is more important to our future success than our ability to include these two key constituencies – our young executives and our manufacturer members – in our planning and activities. Big job? Sure it is. But it’s well organized, with great leadership, and a vision for the future. You are going to see more change coming at AED after my term as Chair is complete, and I am proud to have had a part in setting our association on a new path forward. Now go out and have an amazing year – jump in with both feet if you see something that interests you from AED in 2015 – you’ll be glad you did! n
TIM WATTERS (timwatters@hoffmanequip.com) is president of Hoffman Equipment in Piscataway, N.J. BRIAN MCGUIRE | AED President & CEO
>> OFFICERS TIM WATTERS Chairman Hoffman Equipment Co. DON SHILLING Vice Chairman General Equipment & Supplies, Inc. WHIT PERRYMAN Sr. Vice President Vermeer Equipment of Texas, Inc. RICK VAN EXAN Vice President Toromont Industries Ltd. WES STOWERS Vice President Stowers Machinery Corp. MICHAEL D. BRENNAN Vice President of Finance Brandeis Machinery & Supply Co. MIKE QUIRK Past Chairman Wagner Equipment Co.
ROBERT HENDERSON | AED Executive Vice President & COO
>> AT-LARGE DIRECTORS TODD BACHMAN Florida Coast Equipment, Inc. RON BARLET Bejac Corp. DENNIS J. HELLER Stephenson Equipment Inc. LARRY R. MILLER Kelbe Bros. Equipment Co. Inc. MITCH NEVINS Four Seasons Equipment, Inc. MIKE ROONEY Thompson Tractor Co., Inc.
>> REGIONAL DIRECTORS RYAN GREENAWALT Midwest Reg. Alta Equipment Co. TODD HYSTAD Western Canada Reg. Vimar Equipment Ltd. PATRICK W. MCCONNELL West Reg. Clyde/West, Inc. CHRISTOPHER PALMER Northeast Reg. Wood’s CRW Corp. GILES POULSON Rocky Mountain Reg. Faris Machinery Co. JAY RODES Southeast Reg. Wilson Equipment Co. RICK VAN EXAN Eastern Canada Reg. Toromont Industries Ltd., Concord, Ont. GARY D. VAUGHN South Central Reg. OCT Equipment, Inc.
January 2015 | Construction Equipment Distribution | www.cedmag.com | 7
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>> EDITOR’S NOTE
KIM PHELAN
Giving You Our Very Best We hope you enjoy the new additions to CED this year.
O AED-hp shows you the horsepower that is driving dealer success in 2015
ver the years I’ve developed an unhealthy dependence on the mildly sardonic humor of Anne Taintor – if you’re a guy, your significant other may be more likely to recognize the brand than you are, but humor me for a minute. Her cards, calendars, mugs, etc. have a telltale vintage image of a 1930s-’60s woman, usually wearing a lot of red lipstick and tight curls, who is accompanied a by smart-aleck caption of what she’s thinking. I’d have to say my all-time favorite is the long-gowned brunette standing beside a tree, smoking a cigarette – with the cutout words: “She had not yet decided whether to use her powers for good or for evil.” I’m only reminded of that quirky picture as I reflect on the many things I guess I could have decided to do with my editorial knack (“powers” is overdoing it, don’t you think?); but coming back to AED in 2007 and developing this magazine over the past seven-plus years has been a fantastic ride for me – and, on the occasion of this first issue of our 2015 redesign, I hope the new CED is a good thing for you! I promise I’ll continue using all my powers for good to give you valuable information and profitable ideas to consider every month. Who knows, perhaps this will be the year for you, honored reader, to buy a few extra subscriptions for your key managers! You’ve noticed the obvious by now if you’re holding this edition in your hands – we owe a big thanks to AED President and CEO Brian McGuire for encouraging (and budgeting for) a higher quality publication for the members of this fine association! I also want to recognize the creativity and hard work of CED’s graphic designer Eva Belmonte. Besides the upgraded look, we’ve made some content changes. First, we created a more substantial section about the exciting association activities, achievements and tools available to you. The AED-hp pages, beginning on 12, is now your monthly go-to place for resources and updates on what’s being done
for you by AED and what you can participate in – we strongly believe that if you’re not engaged in at least some of the myriad opportunities, you’re at risk for serious disadvantage in the competitive market place. AED-hp shows you the horsepower that is driving dealer success in 2015, including: a wide range of dealer-specific education, workforce development opportunities, Dealer 20 groups, and executive events such as Fly-In (Washington D.C.), Financial Symposium (Memphis), Leadership Academy (Napa!), and Executive Forum (downtown Chicago). We’re also introducing some new columns in CED this year. “CFO 411” (69) is a page that will rotate between authors Ron Hodgeman from WTP Exchange and Steve Pierson from Selden Fox, who will both tackle tax, accounting and other key financial topics for the dealership. We welcome Troy Ottmer, too, as a new regular contributor on the “Problem Solved” column (73), addressing subject matter in the product support departments of your company – Troy is vice president of Fixed Operations at Doggett Heavy Industries, the John Deere dealer based in Houston. Next month, we’ll also roll out a new HR column by Karla Dobbeck, of AED HR Helpdesk fame. We’ve moved a few things around from their previous positions and changed some sections names. Our former Dealer Data, now called “Data Trends” (24), is relocated across from Garry Bartecki’s “MoneyMan” column, where he’ll focus on cash flow as well as rental-related topics. And the new regular occupant of CED’s last page is now a story-column hybrid, “Easy Wins,” by journalist Steve Calechman, who will offer tips on a variety of business issues you can share with managers. Also coming up in the February issue will be a new semi-regular page called “40 Below,” and will feature an exclusive interview with an up-and-coming dealer leader under age 40. Happy New Year to you, and thanks for reading! n
KIM PHELAN (kphelan@aednet.org) is the executive editor of Construction Equipment Distribution and director of programs for AED. January 2015 | Construction Equipment Distribution | www.cedmag.com | 9
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Happening
www.cedmag.com
Current events and news for the equipment distribution industry 12 » AED hp
18 » Industry Beat 24 » Data Trends 25 » MoneyMan Next Month »
Ready to Order
January 2015 | Construction Equipment Distribution | www.cedmag.com | 11
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>> AED hp
Summit’s Keynote Speakers Promise Unforgettable Messages Rooney, Fessler, Fernandes and Ridge guaranteed to inspire
W
e have nothing against entertaining speakers, but we believe you deserve more for your money than a few laughs. The world you compete in demands
more. AED Summit’s keynote speakers share messages that we believe will linger long after you first hear them at Summit. Open your minds to these thought-provoking speakers and take
MAJOR DAN ROONEY
Fighter Pilot, Patriotic Philanthropist, and Author of “A Patriot’s Calling: Living Life Between Fear and Faith”
As a pilot who served three tours of combat in Iraq, Rooney knows the importance of working as a team when the stakes could not be higher. In this powerful presentation, Rooney highlights the importance of personal accountability, working together, and ultimately having the backs of your team when you are on the line. Walk away with a new understanding of how your team should work.
MARK FERNANDES
Values Based Leadership and the Future of Work”
Reminding audiences that leadership is a choice not a title, Mark Fernandes, chief leadership officer at Luck Companies, challenges leaders to live a life of purpose, on purpose, to positively impact the lives of those around them. Take home a greater understanding of what’s wrong with leadership today and learn how to implement valuesbased leadership in your organization.
away a greater understanding of the issues and challenges before you. Find ideas and solutions to re-energize your team and reshape your organization.
CLYDE FESSLER
Rebuilding the Brand: How HarleyDavidson Became King of the Road
Clyde Fessler presents a brand turnaround case study with lessons for the construction industry distributor. Walk away with an understanding of how to renew and reinvigorate your brand with a focused business plan.
TOM RIDGE First U.S. Secretary of Homeland Security and Former Governor of Pennsylvania America the Product & Its Brand: U.S. Global Engagement in the 21st Century As one of the world’s pre-eminent statesman, Ridge offers unique insight into the role that all democracies bring to the international table and the increasing importance of the American brand to our engagement with the rest of the world.
Without Your Voice [and Your Face] Lawmakers Will Operate in a Vacuum – Let’s Make Some Noise That Matters at the AED Fly-In May 20-21, 2015
New hotel hub: The Willard Intercontinental, Washington, D.C.
AED member executives gather for business insights, Capitol Hill relationship-building, and networking with industry peers – one of best executive events of the year! 12 | www.cedmag.com | Construction Equipment Distribution | January 2015
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>> AED hp
Meet AED’s New Advocacy Action Group
I
n the summer of 2014, at the direction of President and CEO Brian McGuire, AED founded the association’s Advocacy Action Group (AAG), a dedicated corps of industry executives who would commit to “grasstops” leadership on behalf of equipment distributors. AED has a long record of success on Capitol Hill, in part because of the broad base of grassroots advocates around the country. But grasstops – a term you might not have heard – are
just as important. While grassroots activists are the soldiers in the army, grasstops leaders encourage, organize and direct others to pursue specific policy outcomes. The association’s continued success – and its influence both in Washington and back at home – depends on the generals in the field who can marshal and direct grassroots enthusiasm. “Working with Congress is telling a story,” McGuire said. “Getting lawmakers to really listen is about relating
that story back home. Our members are the heroes; the AAG is their mechanism to offer a supportive, but starring role to their elected officials.” Since the group formed, 11 members have answered the call on behalf of AED and their businesses. This assembly, which spans the country from Alaska to Arkansas and Massachusetts to Missouri, is the first foothold in the association’s new campaign to empower its membership more than ever before.
AAG Founding Membership This small but capable selection of industry leaders is a great start. The AAG kicked off with a September meeting and was immediately called to action, sending letters and leading employee efforts during AED’s Legislative Action Week in November. “We say all the time that ‘all politics is local,’ and it’s true,” said Christian A. Klein, AED’s vice president of
12_AED_hp_KP.indd 13
Government Affairs. “The trick is to make this industry’s big, national challenges resonate on that local, political level. It’s through initiatives like the AAG that things get done.” Is your state not covered by AAG reps? Join the AAG by contacting AED’s Government Affairs Office: 703-739-9513, aeddc@aednet.org.
Paula Benard President C.N. Wood Co. Massachusetts
Rajan Julka Managing Partner ADI Agency New York
Walter Berry Chairman & President The Berry Companies Kansas
Giles Poulson President Faris Machinery Company Colorado
Kresten Binder President Hydrema U.S. Georgia
John Riggs President Riggs CAT Arkansas
Ben Dutton Executive Vice President Equipt. Corp of America Pennsylvania
Bill Schoenfelder President The Victor L. Phillips Co. Missouri
Chad Gerondale Sales Manager Construction Machinery Industrial, Alaska
Michael Sheehan President & Owner Sheehan Mack Sales & Equipment, South Dakota
Gayle Humphries Chief Financial Officer JCB of Georgia, Georgia
(continued on next page) January 2015 | Construction Equipment Distribution | www.cedmag.com | 13
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>> AED hp
AED Welcomes New Regional Manager Kristin Crooks to cover the U.S. south central region
M
eet AED’s newest regional manager, Kristin Crooks. She will cover the South Central region, meeting with members and local AED groups to improve overall engagement and member satisfaction. She reports to AED Senior Regional Manager and Director of Member Engagement Michael Dexter. Crooks recently earned a bachelor’s degree in communications from University of Illinois at Chicago. Recognizing the need to bolster academics with practical experience, Crooks garnered five internships prior to graduation including stints with
Comcast Sports and WGN. Before joining AED she managed social media for White Sox Hall of Famer Frank Thomas. If you want to talk hockey, Crooks is your gal. An accomplished skater and avid hockey fan, Crooks served as a member of the Chicago Blackhawks ice crew in 2011-2012. In addition to the Blackhawks she faithfully follows the Rockford IceHogs. Now she’s ready for her own road trips to meet face-to-face with members and local AED groups. “I am excited about the travel,” said Crooks. “I love to visit places I have
Get to know your RM Mike Dexter
mdexter@aednet.org
Ben Yates
byates@aednet.org
Phil Riggs
priggs@aednet.org
Kristin Crooks kcrooks@aednet.org
never been before.” She joins Dexter, Ben Yates and Phil Riggs as part of the team of regional managers who spend about 60 percent of their time on the road. Crooks can be reached at kcrooks@aednet.org.
AED Celebrates Holidays with Illinois Equipment Distributors
A
ED’s Dave Gordon (left) congratulated new IED officers at the local group’s Christmas party Dec. 5. – pictured: 2015 president Tom Smith (center), National Lift Truck; and treasurer Wally Savage (right) from Roland Machinery. The rest of the new board consists of vice president Adam Tschetter, Patten Industries; outgoing president and first-year director Tom Novak, Martin Implement Sales; and second-year director Robert Sloan, Contractors Equipment Rentals.
Foundation’s Steve Johnson Promoted
A
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12_AED_hp_KP.indd 14
ED Executive Vice President and COO Bob Henderson proudly announced that Steve Johnson has been named Vice President – Foundation Operations. Among other accomplishments, Johnson created AED’s Assessment Testing Program in English and Spanish, adopted around the world and endorsed by Caterpillar. He greatly expanded AED’s Accreditation Program for Community and Technical Colleges, for which AED is acknowledged globally. He added a program for high schools as well. Henderson added that Johnson’s stewardship of the Foundation’s financials has been exemplary. 12/22/14 6:22 PM
>> AED hp
Pushing Hard on Infrastructure Accelerator
A
ED’s Brian McGuire (left) and Brandeis Machinery & Supply Company’s Michael Brennan (right) met with Rep. Andy Barr (R-Ky., center) on Capitol Hill
Dec. 3 to discuss the importance of infrastructure investment, the federal government’s key role funding in funding highways, and the need for a long-term, robust surface transportation bill early next year. On the same trip, Brennan and McGuire joined representatives from the Highway Materials Group for a meeting with incoming Senate Majority Leader Mitch McConnell (R-Ky.) in the U.S. Capitol. McConnell, just a few weeks after a hard-fought re-election campaign and the Republicans gaining the Senate majority, met with Bluegrass state construction
Sen. Mitch M cConnell
industry executives about the need for immediate action to ensure the Highway Trust Fund’s longterm solvency and the importance of the federal highway program for Kentucky’s economic growth. McConnell acknowledged the importance of finding a longterm solution to our nation’s surface transportation infrastructure investment crisis and committed to making the issue a top-priority in the 114th congressional session.
AED Meets With Texas Lawmakers
O
n Dec. 9, AED President and CEO Brian McGuire, joined by AED Vice President of Government Affairs Christian Klein and Regional Manager Kristin Crooks, accompanied AED Senior Vice President Whit Perryman, president of Vermeer Texas-Louisiana, to meet
Left to right: Christian Klein, Brian McGuire, Whit Perryman, and Rep. Brady
with two his Congressmen: Rep. Pete Sessions (R-Okla.) (right photo) and with Rep. Kevin Brady (R-Texas). In both meetings AED dialogued with the lawmakers about funding U.S. infrastructure by raising the gas tax, as well as alternative funding mechanisms that would not raise taxes.
Left to right: Christian Klein, Rep. Sessions, Whit Perryman, and Brian McGuire
Missing Something? Get into an AED Dealer 20 Group in 2015 and Start Working Toward Better Profitability
M
embers of an AED Dealer 20 Group met in November in Hershey, Pa., toured one of the member’s facilities, Stephenson Equipment, and convened for a day and a half to discuss best practices and how to improve their bottom lines. Left to right: Denny Vander Molen, Jason Beyer and Corey Vander Molen from Vermeer MidSouth; John Kimball, Kimball Rentals; Jeff Miller, Kelbe Bros.; Bill McCleave (facilitator); Bob Criste, Dennis Heller and Dale Heiner from Stephenson Equipment; and Ray Ferwerda, GS Equipment. January 2015 | Construction Equipment Distribution | www.cedmag.com | 15
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>> AED hp
AED Foundation Re-Accredits Wake Technical Community College Diesel Technology
T
he AED Foundation congratulates Wake Technical Community College on receiving AED Re-Accreditation of both the General Track and John Deere C&F Track Heavy Equipment and Transport Technology programs. “Accreditation not only sets high standards for colleges, but also keeps colleges up-to-date and aligned with industry direction,” said Ronnie Lowe, the school’s department head. Wake Tech is one of seven community colleges in the U.S. instructing students on John Deere Construction and Forestry Equipment. Sponsoring dealers for this program include: James River Equipment, I., Ashland, Va; R.W. Moore Equipment Co., Garner, N.C.; and Flint, Inc., Columbia, S.C.
The North Carolina-based Advisory Committee members supporting the General Track program include: John Adamof, Gregory Poole Equipment Co., Raleigh; Jerry Campbell, RW Moore Equipment Co., Greenville; Kevin Savage, Fred Smith Company, Clayton; Tom Jones, Clark Power Services, New Bern; Polly Van Valkenburg, Linder Industrial Machinery Co., Greensboro; Brent Sloan, Sanford Contracting Co., Sanford; David Lewis, AGCO Corporation, Durham; Jimmy Williamson, DOT, Raleigh; Key Winkler, Waste Industries, Raleigh; Robert Henderson, MHC Truck, Youngsville; Michael Cushman, Penske, Morrisville; and Everett Hackney, Chason Diesel, Garner.
EPG Adds to Summit Excitement with PGA Raffle
Just Added!
T
he AED Foundation will be raffling off two tickets to the 2015 PGA Championship in Kohler, Wis. Sponsored by EPG Insurance, the package includes two tickets to the event on August 15 and 16, access to the onsite hospitality tent and hotel accommodations for three nights. Tickets will be sold at the AED Foundation booth throughout Summit. The winner will be drawn by Ritchie Bros. on Friday morning at the breakfast and closing program with Tom Ridge. (Winner is not required to be present to win.)
Keep Those Pledges Coming
T
he AED Foundation is thrilled to announce they’re half way to their annual campaign goal of $300,000. “Thanks to the generosity of the equipment industry, we’ve has raised over $150,000,” said Rebecca Lintow, Foundation manager of Sales and Development. “Please consider making a pledge now to keep the workforce development and professional education programs going.”
Suppor t The Foundation by purchasing you could w raff le tickets in big! at Summit –
Baby, You’re Alright!
A
ED held a baby shower for staffer Rebecca Lintow on Dec. 8, who was expecting a baby boy Jan. 15 – but Baby had other plans. The next afternoon, Dec. 9, a small but healthy Matthew Phillip Lintow arrived at 2:49, five weeks early and weighing in at just 4 pounds 12 ounces. Rebecca will be missing the AED Summit for good reason – if you need to reach The Foundation during her maternity leave, please connect with Steve Johnson, sjohnston@aednet.org.
16 | www.cedmag.com | Construction Equipment Distribution | January 2015
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>> AED hp
Mark Your Calendar Feb. 3-6, 2015 World of Concrete Las Vegas, Nev. Feb. 10-13, 2015 AED Summit & CONDEX Orlando World Center Marriott Orlando, Fla. March 3-5, 2015 The Four Pillars of the Sales Profession Dayton, Ohio Presented by Don Buttrey
Don’t Miss It March 12, 2015 Webinar: Sales Team Development 10-11:30 a.m. CST Presented by Don Buttrey March 17-19, 2015 World of Asphalt Baltimore, Md.
April 20-25, 2015 Intermat Paris-Nord Villepinte, France April 23-24 The AED Foundation Financial Symposium Memphis, Tenn.
March 26, 2015 Webinar: 401(k) – “What’s Uncle Sam Up to Now”? 10-11 a.m. CST Presented by Todd Thompson
Please visit us in CONDEX Booth 200 January 2015 | Construction Equipment Distribution | www.cedmag.com | 17
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>> INDUSTRY BEAT
Wacker Neuson Begins Loader Production in the U.S. The Wacker Neuson Group is building a production line for skid steer and compact track loaders at its U.S. facility in Menomonee Falls, Wis. The facility will go on stream in the first quarter of 2015, initially manufacturing four models. The U.S. is the largest market for skid-steer loaders. “Our strategy is ‘in the region for the region,’ so it makes sense for us to build skid-steer loaders in the region where demand is strongest – North America,” explained Cem Peksaglam, CEO of Wacker Neuson SE. The company hopes to speed up time to market and will give the manufacturer the ability to adapt the machines to meet specific customer requirements. The four models will
initially only be distributed via the U.S. and Canadian dealer network. From 2015 on, Menomonee Falls will also be producing the skid-steer loaders SW24 and SW28 and compact track loaders ST35 and ST45. Concurrently, a local development team is working on further models to broaden the line.
AED to EPA: Sink “Waters of the U.S.” Proposal On Nov. 13, AED joined 375 industry trade associations and chambers of commerce from 50 states to voice concerns with the proposed rule to dramatically expand the scope of federal authority over water and land uses across the country. The rule, proposed by the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers’, seeks to clarify the definition of what can be regulated and would dramatically expand the agency’s jurisdiction. The association is calling for the proposal to be withdrawn on both legal and business grounds. AED’s comments highlight that the agency failed to follow existing law on numerous counts. This includes failure to assess the economic impact that proposed regulations will have on small businesses and to follow Supreme Court precedent, as required by the Regulatory Flexibility Act. The result is bad for business, useless in service of the environment and ignorant of legislative, judicial and regulatory mandates.
“The administration’s efforts to redefine ‘waters of the United States’ have been a complete failure,” said Brian McGuire, AED’s president and CEO. “The EPA’s claim that it is reducing the total waters under its control is not just inaccurate, it is patently false. If the new definition moves forward, the EPA would reclassify ditches and other landscape features that occasionally carry water as tributaries to navigable waterways – as if a riverboat is going to plot a course through a puddle in your front yard. It would make the agency the nation’s chief land manager – able to regulate development, farming, mining and other activity in large swaths of the country. As the suppliers of critical equipment for the construction, mining, farming and other heavy industries, our members understand that increased costs result in fewer projects, smaller revenue and a dismal outlook.” Getting Congress to rein in the EPA is a main item on AED’s legislative agenda. To contact your legislators visit aedaction.org. (continued on page 18)
Sunstate Equipment Shows Industry’s Opportunities to High Schoolers
Sunstate Equipment recently participated in Arizona Construction Career Days, an event where more than 1,500 high school students spend the day in a hands-on learning environment with many different aspects of the construction industry. “This is the kind of outreach efforts we need to solve the skilled worker shortage,” said Human Resources Manager Deb Ryan. “Seeing the smiles and hearing all the comments of excitement about potential career paths from the students, teachers, and counselors of the various schools was so rewarding to my co-workers and me.” Sunstate brought four machines to the event.
18 | www.cedmag.com | Construction Equipment Distribution | January 2015
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Canada must establish a coherent and comprehensive strategy to update trade infrastructure or risk ceding lucrative new global markets to competitors, argues a new report from the Canada West Foundation. The report, “Building on Advantage, Improving Canada’s Trade Infrastructure,” states that Canada’s infrastructure is in better shape than some other nations’, but failure to invest in upgrades “will allow our competitors to close the gap, leaving only a future ‘crisis’ to prompt action.” Hailed by the Canadian Construction Association, the report recommends a permanent national public-private body to develop a longterm infrastructure plan; calls for the involvement of the private sector in planning and management of trade infrastructure; and earmarks for an explicit share of federal infrastructure funds for trade related infrastructure. The full report is available at www.cwf.ca. JO HN
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Cashman Equipment Among First Cat Dealers to Gain 5-Star Contamination Control Certification Cashman Equipment is one of the first of 200 Caterpillar dealerships worldwide to receive CAT’s prestigious 5-Star Contamination Control Certification. Created in 2000, Caterpillar’s Contamination Control Compliance Program implemented a rigorous set of requirements and guidelines, complete with a Caterpillar audit, in order to ensure that the highest standards of cleanliness are met. Cashman Equipment prepared for 15 months, creating new employee training programs, overhauling the Component Repair Center (CRC), and developing standard operating practices. During Caterpillar’s rigorous contamination control audit, 18 areas with five to 10 subsections were inspected. Cashman Equipment attained 97.3 percent on CAT’s evaluation.
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“Our Reno CRC is nearly 20 years old, and some of the surrounding facilities are over 30,” said Thomas Shrecengost, assistant general manager of Service, Cashman Equipment. “To say that it was challenging would be an understatement. Some employees didn’t even think it could be done. However, our Reno CRC team, with the support of nearly every other department at Cashman, was able to create processes and procedures that changed our culture. Because our expectations rose to CAT’s 5-Star level, so did our shop.” “The heavy equipment industry landscape is changing. The service and support of a customer makes more of a difference today than it ever has in the past,” said Mike Pack, president & COO, Cashman Equipment. “Achievements like CAT 5-Star Contamination Control show our customers that we will keep changing and evolving to better suit their needs.”
20 | www.cedmag.com | Construction Equipment Distribution | January 2015
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in the news Steve Ouellette, president of Frank Martin Sons, Inc. in Ft. Kent Mills, Maine, is the winner of AED’s 2014 Pundit of the Year contest. Ouellette correctly predicted the outcome of 12 of the 13 most hotly contested Senate and House races in AED’s online contest and predicted all six competitive Senate races. An honorable mention goes to runner-up Patrick McConnell, president of Clyde West Equipment Co. in Portland, Ore, who correctly chose the winners of five of the seven House races included in the survey. Volvo Construction Equipment will discontinue development and production of its current line of Volvo-branded backhoe loaders and motor graders. In the future, these products will be manufactured by Volvo CE’s Chinese company SDLG. The measure will result in a workforce reduction of about 1,000 employees, the majority of whom are in Poland, the U.S. and Brazil. SDLG-branded backhoe loaders and motor graders will target customers in the large and growing value segment of the market.
HOLT CAT the Caterpillar dealer for South, Central, North and North East Texas, has named Jim Campbell as senior director of Public Affairs. Campbell has been involved in governmental affairs and strategic communications for more Jim Campbell than 25 years. In his new role, he will support the company in fostering long-term and strategic relations with HOLT’s constituencies to positively impact and advance the company’s vision and core values. Campbell replaces HOLT CAT Vice President of Public Affairs Howard Hicks, who will be retiring. HOLT CAT also held an open house on Dec. 3 to celebrate the completion of its 40,000 square foot, state-of-the-art heavy equipment service facility. The $11 million
expansion is part of a $100 million HOLT investment plan to upgrade facilities, open new full-service locations, and ensure technicians are equipped with advanced tools and technologies in order to provide outstanding service to customers. This development represents the single largest expansion to HOLT’s San Antonio-based headquarters at 3302 S WW White Road in decades. The new building, which replaces a smaller service shop, will be a climate-controlled facility that will provide an improved work environment for technicians. WTP Exchange has been admitted as a member of the prestigious Lessors Network, a group designed to keep the largest equipment lease finance community informed of breaking news, regulatory updates and networking events shaping the industry. As a member of the Lessors Network, WTP (continued on next page)
Luby Equipment Services acquired the assets of H Edwards Equipment, which had been the Case dealer for light equipment in the Caseyville, Ill., area for many years. With this acquisition, Luby is the authorized dealer for the full line of Case products for Calhoun, Jersey, Randolph, Madison, Monroe and St. Claire counties in Illinois. The entire staff of H Edwards Equipment, including service, sales and parts personnel, is now part of the Luby team. Bobcat of Houston opened a new full-service location in Brazos Valley on Elaine Drive in Bryan, Texas. Liebherr Construction Equipment Co. will open a new spare parts facility located in Visalia, Calif. The new depot is expected to begin operations in early 2015. The facility will support Western U.S. Distribution with localized parts warehousing.
January 2015 | Construction Equipment Distribution | www.cedmag.com | 21
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in the news Exchange will be able to keep equipment lease finance professionals up to speed on critical tax legislation, and offer experienced guidance on how companies can increase their cash flow from year to year using a like-kind exchange program. Canadian-based NCSG Crane & Heavy Haul Corporation announced that its U.S. subsidiary, NCSG Crane & Heavy Haul Services, Inc., has acquired substantially all of the assets of Great Falls, Mont.-based business, H&H Crane Service Inc. As a part of the transaction, H&H Founder Tom Harant has taken an ownership interest in NCSG, and intends to work closely with NCSG to grow the crane and heavy haul services business in the Great Falls region.
Kubota Tractor Corp. will open a 450,000-square-foot, state-of-the-art parts distribution center in Edgerton, Kan. According to the company, the central U.S. location will enable Kubuta to manage its stream of parts more effectively and improve parts delivery time, including an expanded geographical area for 24-hour parts delivery. The facility is expected to be operational during the third quarter of 2015. CIO Review recently chose B4 Consulting for its 20 Most Promising Construction Tech Solutions Providers for 2014. The annual list of companies, selected by a panel of experts and members of CIO Review’s editorial board, recognizes and promotes technology entrepreneurship. B4
Caterpillar Inc. announced the retirement of group presidents Stu Levenick and Steve Wunning. Levenick is a Caterpillar group president with responsibility for Customer & Dealer Support. Wunning is group president with responsibility for Resource IndusStu Levenick Steve Wunning tries. Both retirements will be effective in early 2015. Ed Rapp, 57, will serve as Wunning’s replacement, while Tom Pellette, 51, currently a Caterpillar vice Ed Rapp Tom Pellette president and president of Solar Turbines Inc., has been promoted and will replace Rapp as group president with responsibility for Construction Industries. He will be relocating from San Diego, Calif, to Peoria, Ill. Rob Charter, 51, currently vice president with responsibility for the Excavation Division, has been promoted and will replace Rob Charter Levenick as group president with
Consulting’s positioning is based on CIO Review’s evaluation of B4 Consulting innovative offerings for Engineering, Construction, Real Estate, Field Services, Professional Services, and Equipment Management solutions to small, medium, and large enterprises. Hertz Equipment Rental Corporation (HERC), officially opened its first HERC Equipment Sales location in Orlando, Fla. Multiple lines of equipment are on offer, including earthmoving, aerial, material handling, air compressors, compaction, power generation and trucks. All equipment is immediately available in HERC Certified “Ready to Work” condition.
responsibility for Customer & Dealer Support, relocating from Singapore to Peoria, Ill. Bob De Lange, 44, will replace Charter in Singapore. Caterpillar also announced several vice president changes as well. Steve Gosselin, vice president with responsibility for the Customer Services Support Division will retire Feb. 1, 2015. Caterpillar’s Board of Directors has appointed George Taylor, 53, currently general manager for Caterpillar’s Global On-Highway Truck group, to replace Gosselin. Tom Pellette, currently a Caterpillar vice president and the president of Solar Turbines, will assume new responsibilities as group president for Construction Industries. Pablo Koziner, 41, currently vice president with responsibility for the Americas Distribution Services Division, has been named a Caterpillar vice president and the president of Solar Turbines. Phil Kelliher, 42, will replace Koziner as vice president with responsibility for the Americas Distribution Services Division.
Steve Gosselin
George Taylor
Pablo Koziner
22 | www.cedmag.com | Construction Equipment Distribution | January 2015
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PHYSICAL UTILI PHYSICAL UTILI PHYSICAL UTILIZATION
AWP AWP - TELESCOPIC BOOMS − - TELESCOPIC BOOMS −2.2%2.2%
BACKHOES − BACKHOES −1.4%1.4%
80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 73.5%73.5%80% 80% 80% 80% 80% 80% 73.5%73.5%80% 80% 69.3%69.3% 69.3%69.3% 70% 70% 70% 70% 70% 70% 80% 80% 80% 80% 73.5%73.5%80% 80% 69.3%69.3% 69.3%69.3% 70% 70% 70% 70% 70% 70% 73.5%73.5% 69.3%69.3% 69.3% 69.3% 80% 80% 80% 70% 80% 70% 80% 70% 80% 70% 70% 60% 60% 60% 60% 60% 70% 60% 69.3%69.3% 69.3%69.3% 70% 70% 70% 70% 73.5%73.5%70% 70% 60% 60% 60% 60% 60% 60% 69.3%69.3% 69.3% 69.3% 70% 70% 70% 60% 60% 60% 60% 60% 60% 50% 70% 50% 70% 50% 70% 50% 50% 50% 2014 2014 2011 2012 2012 2013 2013 2014 2014 2012 2012 2013 2013 2014November 2011 2012 201 60% 60% 60% 013 2014 2011 2014 60%2011 50% 50% 50% 60% 50% 60% 50% 50% 2014 2011 2012 2013 2014 2012 2013 2014 2011 2012 201 013 2014 2011 2012 2013 2014 2012 2013 2014 2011 50% 50% 50% 50% 50% 50% 60% 60% 60% 60% 60% 60% 2014 2014 2011 2011 2012 2012 2013 2013 2014 2014 2012 2013 2014 2011 2012 201 013 2012 2013 2014 2011 50% 50% 50% 50% 50% 50% SKID STEERS −2013 − -1.2% HI-REACH SKID FORKLIFTS - HI-REACH 1.9% 2014 2014 2011 FORKLIFTS 2012 -2012 2013 −2013 −1.9% 2014 2012 2014 2014 2011 2012 201 013 2014 2012STEERS 2013 -1.2% 80% 80% 85% 85%2011 85% 85%2011 50% 50% 50% 50% 80.8%80.8%50% 50% 2014 2014 2012 2013 2014 2012 2013 2014 2011 2012 201 80% 85%2011 85% 013 2011 2012 2013 2014 2012 2013 2014 2011 80% 85% 85% 80.8%80.8% 85% 85% 80% 80% 85% 85% 75% 75% 75% 75% 80.8%80.8%70% 70% 80% 80% 85% 85% 85% 75% 75% 75% The 85% Dodge Momentum Index increased in November, climb80.8% 75% 80.8%70% 70% 80% 85% 85% 75% 85% 70% 75% 85% 80% 75% 70% ing62.6% to 125.0 (2000=100) for the month, up 0.6 percent from 62.6% 62.6% 60% 65% 65% 75% 80.8% 62.6% 65% 65% 80.8%70% 60% 75% 75% 75% 75% 70% 62.6% 62.6% 65% 65% 65% 65% 62.6% 62.6% October’s reading of 124.3 according to Dodge Data & Analytics. 60% 60% 62.6%62.6% 70% 75% 75% 65% 75% 62.6%62.6% 60% 70% 65% 75% 65% 65% 50% 60% 55% 55% The 55% Momentum Index is a2012 monthly measure of 2014 the first (or 50% 55% 2014 2014 2012 2013 2012 2012 2013 2013 2014 2014 2012 201 62.6%62.6% 62.6%62.6% 60%2011 65%2011 65%2011 013 2013 2014 2011 65%2011 65%2011 50% 60% 55% 55% 50% 55% 55% initial)2011 report for nonresidential building projects planning, 2014 2014 2012 2012 2013 2013 2014in 2014 2012 2012 2013 2013 2014 2014 2011 2011 2012 201 November 2014 2011 2011 013 2011 62.6%62.6% 62.6% 60% 65% 55% 65% 62.6% 50% 55% 55% 55% 60% 65% 65% 50% 2014 2014 2011 2012 to2012 2013 2014 2014 2011 2012 2013 2014 2014 2011 2012 201 013 2011 shown 2013 2011 2012 / Jun 2013 2011 2011 & 2012 2012 & 2013 Jul 2013 2013 which have been lead construction spending for Aug 2014 / Jul 2014 50% 50% 55% 55% 55% 55% 2014 2014 2011 2011 2012 2012 2013 2013 2014 2014 2011 2011 2012 2012 2013 2013 2014 2014 2011 2011 2012 201 013 80% 80% buildings by a full year. For more information, 80% 80% 80% 80% nonresidential 50% 50% 55% 55% 55% 55% 2014 2014 2012 2013 2014 2011 2012 2013 2014 2011 2012 201 80%2011 80% 80% − 1.5% FORKLIFTS WAREHOUSE/INDUSTRIAL − 2.3% AWP ARTICULATING BOOMS 013 2012 2013 2014 2011 2012 2013 2014 2011 80%2011 80% 80% − 1.5% FORKLIFTS WAREHOUSE/INDUSTRIAL − 2.3% AWP ARTICULATING BOOMS - TELESCOPIC BOOMS − 2.2% BACKHOES − 1.4% visit71.0% Dodge DataAWP & Analytics at construction.com. 71.0% 71.0%71.0% 80% 80% 80% 80% 80% 80% 68.6% 68.6% 70% 70% 70% 70% 70% 70% 71.0%71.0% 71.0%71.0% 80% 80% 80% 80% 80% 80% 80% 80% 68.6%68.6%80% 70% 70% 70% 70% 70% 70% 71.0%71.0% 71.0%71.0% 80% 80% 80% 73.5% 68.6% 68.6%80% 80% 80% 70% 80% 70% 80% 70% 80% 70% 70% 70% 71.0%71.0% 71.0%71.0% 80% 80% 80% 60% 60% 60% 60% 73.5% 69.3% 69.3% 60% 60% 68.6% 68.6%70% 70% 70% utilization is the percentage of fleet cost which 70% The 70% charts70% below show physical utilization by equipment category. Physical is 70% 70% 70% 80% 80% 80% 73.5% 60% 60% 60% 60% 60% 60% 69.3% 69.3% 71.0%71.0% 71.0%71.0% 70% 70% 70% 68.6% on-rent during a given period. Physical utilization is cost weighted. “On Rent” and “In Fleet” status are determined on a nightly 68.6% 70% 70% 70% 60% 73.5% 60% 60% 69.3% 60% 69.3% 60% 60% 50% 70% 50% 70% 50% 70% 80% 80% 80% 50% 50% 50% 70% 70% 70% 2014 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 201 60% 60% 60%2011 60% 60% 013 2014 2012 2013is “On Rent” 2014 2012 2013 is “In Fleet” 2014if it69.3% 69.3% 60% basis 7 days a2011 week, 365 days a year. A unit if it73.5% is at60% a job 60% site2011 earning rental revenue. A unit is a 60% 50% 50% 50% 50% 50% 50% 70% 70% 70% 2014 2014 2011 2012 2012 2013 2013 2014 2014 2011 2012 2012 2013 2013 2014 2014 2011 2012 201 60%2011 60% 60% 013 2011 2011 50% 50% 60% 50% 60% 50% 50% 50% 60% 60% 60% rental asset owned by2012 the client. Units out for repair and refurbishment are considered “In Fleet.” 69.3% 60% 2014 2014 69.3% 2011 2013 2013 2014 2014 70% 70% 70% 60% 2012 2012 2013 2013 2014 2014 2011 2012 201 60% 60% 013 2012 2011 50%2011 50%2011 50% 50% 50% 50%2011 50% 2011 & 2012 2012 & 2013 Jul 2013 / Jun 201 50% 50% Aug 2014 / Jul 2014 013 2014 2011Jul 2012 2013 2014 2012 2013 2014 2011 201 Source: Rouse Asset Services. Contact Gary/McArdle at gmcardle@rouseservices.com, (310)2014 363-7520 2014 2011 2012 2013 2013 2014 2011 2012 2012 2013 2013 2014 2014 2011 2012 201 60% 60% 60% 013 2014 2011 2012 2012 & 2013 2013 Jun 2013 50% 50%2011 50%2011 Aug 2014 / Jul 2014 80% 70% 70% 80% 80% 80% 50% 50%2011 50% 50% 50% 50%2011 013 2014 2012 2013 2014 2012 2013 2014 201 50% 50% 50% 2014 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 80% 80% 70% 70% 80% 80% 60%2011 60%2011 60%2011 013 2014 2012 2013 2014 2012 2013 2014 201 013 2014 2011 2012 2013 2014 AWP - TELESCOPIC 2012− 2013 2014 2011 201 BOOMS 2.2% BACKHOES − 71.1% 71.1% 50% 50% 50% 80% 80% AWP FORKLIFTS 70% 70% - SCISSOR LIFTSLIFTS GENERATORS − 2013−− 2.0%2.0% − 2.6%2.6% 2014 80% AWP - SCISSOR GENERATORS 1.4% SKID 1.9% 0132.2% 2014 2012 -−HI-REACH 2014 2012STEERS −2013 -1.2% 2011 201 70% 70%2011 BACKHOES 70% 80% 60% 70% 71.1% 71.1%60% 80% 85% 85% 56.4%56.4% 56.4% 80% 80% 70% 80% 56.4% 70% 80% 80% 80% 80% 50% 50% 50% 80.8% 70% 70% 70% 70% 71.1% 71.1% 80% 80% 60% 60% 013 2014 2011 2012 2013 2014 2012 2013 2014 2011 201 80% 85% 85% 56.4% 56.4% 56.4% 56.4% 80% 80% 80% 73.5% 80% 70% 70% 80% 70% 80% 80.8% 70% 80% 70% 71.1%71.1% 80% 80% 60% 85% 56.4%56.4% 73.5% 73.5% 80% 85% 56.4%56.4% 60% 60% 50% 60% 60% 70% 50% 60% 80% 80% 80% 73.5% 70% 75% 75% 69.3% 80.8% 70% 70% 60% 70% 70% 70% 70% 70% 80% 80% 50% 60% 80% 85% 85% 56.4%56.4% 56.4%56.4% 73.5% 60% 60% 60% 60% 69.3% 50% 71.1%71.1% 80% 80% 73.5% 73.5% 70% 70% 70% 75% 75% 69.3% 80% 80.8% 70% 70% 70% 80% 80% 50% 73.5% 70% 60% 70% 60% 73.5% 60% 69.3% 70% 60% 60% 50% 60% 50% 50% 50% 70% 73.5% 80% 85% 85% 50% 70% 70% 40% 40% 75% 56.4% 56.4% 69.3% 70% 75% 56.4% 56.4% 80% 80% 80% 70% 70% 70% 2014 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 201 62.6% 62.6% 60% 65% 65%2011 73.5% 73.5% 80.8% 60% 50% 60% 013 2014 2011 2012 2013 2014 2011 2012 2013 2014 69.3% 60% 50% 60% 50% 50% 50% 50% 80% 80% 40% 40% 60% 60% 70% 70% 70% 75% 75% 69.3% 60% 70% 70% 70% 73.5% 60% 60% 2014 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 201 62.6% 62.6% 60% 65% 65%2011 013 2014 70% 2011 2012 2013 2014 70% 40% 2011 2012 2013 2014 69.3% 50% 50% 50% 60% 60% 60% 73.5% 73.5% 40% 50% 60% 60% 50% 50% 60% 60% 2014 2014 62.6% 2012 2012 2013 2013 69.3% 2014 2014 60% 70% 75% 75% 60% 2011 65%2011 2011 2012 2012 2013 2013 2014 2014 62.6% 2011 2012 201 60% 65% 013 2011 2011 50% 40% 50% 70% 70% 70% 60% 60% 50% 50% 40% 50% 60% 55% 55% 69.3% 013 2014 62.6% 2011 2012 2013 2014 70% 2011 2012 2013 2014 62.6% 2011 201 70% 201450% 2011 2012 2012 2013 2013 2014 50% 2012 2012 2013 2013 2014 50% 2011 2012 201 60% 60%2011 65% 65%2011 013 2014 2011 2014 2014 50% 50% 80%2011 2012 2013 2014 2011 60% 2012 2013 2014 2012 80% 80% 50% 60% 60% 60% 55% 55% 80% 80% 80% 50% 50% 50% 50%2011 40% 40%20112012 50% 50%2011 2012 2012 2013 2013 2014 50% 2011 0132014 2014 60% 2014 60% 20122013 20132014 2014 201 50% 2012 2014 2011 50% 80%2011 2012 2013 2014 2012 2012 201 201450% 2012 2013 2013 2013 2014 50% 2012 2013 2014 50% 62.6% 62.6% 80%2011 80%2011 60% 65% 65%2011 50%2011 55% 013 2014 2011 2012 2014 2012 2013 2014 55% 80% 80% 80% 2012 2012 2013 2013 2014 60% 2011 0132014 2014 2011 2014 20112012 20122013 20132014 2014 2011 201 72.0%72.0% 72.0%72.0% 60% 60% 50% 50% 2012 2013 2014 2011 2012 2013 2014 80% 60% 60% 50% 2012 70.2% 80% 80% 55% 55% 80% 50% 50% 2012 2012 2013 2013 2014 50% 2011 0132014 2014 2014 70.2% 20112012 20122013 20132014 2014 2011 201 70% 70%2011 70% 80% 70% 80% 72.0%72.0% 72.0%72.0% 70% 70% 50% 50% SKID STEERS − FORKLIFTS HI-REACH − 1.9% 80% 80% 80% 2012 SKID STEERS 2013 2014 201170.2%80% 2012 2013 2014 80% 80% 80% 80% 2012 70.2% 80% −−2013 -1.2% 1.9% 2.2% 2.2% WHEEL LOADERS EXCAVATORS 2014 2012EXCAVATORS 2014 85% 2011 2012 WHEEL 2013 − 20142.2% 80% 80% 50% − 2.2% − LOADERS 72.0%72.0% 70% 70% 70% 55% 55% 72.0% 70% 70% 70% 72.0% 50% 50% 50% 80% 85% 013 2014 50% 2012 2013 2014 2011 2012 2013 2014 2.3% 80%2011 201 80%2011 80% − 1.5% FORKLIFTS WAREHOUSE/INDUSTRIAL − AWP ARTICULATING BOOMS 70.2% 80.8% 70.2% 50% 80.8% 80.8% 80% 80% 80% 2012 2013 2014 2013 2014 70% 80% 80% 80% 85%2011 72.0%72.0% 72.0%72.0% 70% 2012 70% 70% 80% 80% 2012 70% 71.0% 71.0% 2014 2012 2013 2014 70.2%70.2% 2012 2013 2014 80% 85%2011 80% 80% 80% 60% 60% 60% 70% 60% 60% 80.8% 60% 68.6% 70% 70% 70% 80% 85% 80.8% 80.8% 70% 70% 70% 70% 70% 70% 80% 71.0% 71.0% 80% 85% 80% 80% 80% 72.0%72.0% 72.0% 70% 70% 75% 60% 60% 60% 80.8% 72.0% 60% 60% 60% 68.6% 70% 75% 80.8% 70% 70% 70% 70.2% 80.8% 80% 80% 85% 70.2% 71.0% 71.0% 80% 85% 70% 70% 70% 60% 70% 70% 75% 60% 60% 70% 70% 70% 80.8% 60% 60% 60% 68.6% 50% 50% 50% 80% 80% 80% 50% 50% 50% 70% 75% 70% 80.8% 80.8% 70% 70% 71.0% 71.0% 201480% 2011 2012 2012 2013 2013 2014 85% 2012 2012 2013 2013 2014 80% 2011 2012 201 60%2011 60%2011 60%2011 60% 60%2011 60% 013 2014 80% 2014 68.6% 2014 70% 75% 70% 50% 60% 50% 60% 85% 50% 50% 50% 70% 75% 50% 60% 70% 70% 70% 62.6% 60% 60% 65% 80.8% 62.6% 60% 2011 65% 80.8% 80.8% 2014 2012 2013 2014 2011 2012 2013 2014 2011 2012 201 60% 60% 60%2011 013 2014 71.0% 2011 2012 2013 2014 2011 2012 2013 2014 70% 70% 75% 71.0% 50% 60% 50% 60% 50% 60% 50% 70% 75% 50% 50% 60% 60% 60% 62.6% 60% 60% 65% 2014 2014 60% 2011 2012 2012 2013 2013 2014 62.6% 70% 70% 70% 65% 60% 2011 2012 2012 2013 2013 2014 2014 2011 2012 201 60% 60% 013 2011 2014 68.6% 2011 2011 50% 50% 50% 50% 50% 50% 80% 80% 50% 50% 50% 80% 80% 62.6% 75% 60% 65% 60% 013 2014 70% 2011 2012 2013 2014 75% 2011 2012 2013 2014 2011 201 62.6% 201470% 2012 2012 2013 2013 2014 55% 2011 2012 2012 2013 2013 2014 70% 2011 2012 201 60% 2011 65% 60% 60% 60% 013 2014 2011 2014 2011 2014 2011 50% 50% 50% 50% 50% 50% 80% 80% 2011 60% 2012 2014 62.6% 2011 55% 2013 2014 201150% 80% 2012 60% 60% 50% 50% 2012 62.6% 201180% 2012 2013 2013 2013 2014 65% 0132014 2014 2011 2012 2014 20122013 20132014 2014 201 50% 50%20112012 50%2011 65%2011 50% 50% 55% 50% 50% 50% 80%2011 2014 2014 2012 2012 2013 2014 2014 2014 2011 2012 2011 60% 60%2011 60%2011 013 2011 20122013 2013 20132014 2014 2014 69.8% 2011 50% 2012 2011 55% 2012 2013 2014 201180% 2012 2012 201 69.8% 201180% 2012 2013 2013 2013 2014 55% 2011 2012 0132014 2014 2011 2012 2013 62.6% 2014 70% 70% 80% 2012 2013 2014 201 70% 70% 50% 60% 60% 65% 50% 50% 50%2011 50%2011 62.6% 60% 65% 80% 80% 80% 50% 55% 80% 69.8% 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 201170%2011 2012 2012 2013 2013 2014 55% 2011 0132014 2014 2014 69.8% 20112012 20122013 20132014 2014 201 70% 70% 70%2011 50% 50% 80% 70% 80% 50% 55% 69.8% 2011 80% 2012 2014 2012 2013 2014 2014 201180% 50% 50% 50% 2012 2014 201180% 2012 2013 2013 2014 80%2011 69.8% 2011 2012 2013 70% 70% 80% 70% 70% 80% 80% 80% 80% UCC filings on 12 earthmoving units. 013 2014 2011 2012 2013 2014 2011 2012 2013 2014 2011 201 80% 70% 80% 60% 60% 69.8% 69.8% 60% 60% 50% 50% 55% 50% 55% 70% 70% 70% 71.1% 2011 2013 2014− −2014 2011 2012 2013 2014 201170% 2012 80% 80% − 1.5% FORKLIFTS - WAREHOUSE/IN AWP - ARTICULATING 2014 2013 2012 BOOMS 2013 2014 80% 80%2011 80% 1.5%w80% FORKLIFTS 2.3% ww .wr w o uw s. er2011 au n 60% a el y2012 ctAWP 70% 80% LIFTS GENERATORS 2.0% − 2.6% 60% 60% 60% o s70% atni ca -sl y.WAREHOUSE/INDUSTRIAL io2012 cm s . c-oSCISSOR m 60% 70% 69.8% 71.0% OCT NOV 71.0% DEC80% JAN71.1% MAR APR MAY JUN JUL Grand 69.8% 80% 80%SEP56.4% 56.4% 80% 80% FEB 80% 70% 80% 70% 70% 60% 68.6%AUG 60% 70% 70% 68.6% 68.6% Description 70% Equipment 70% 70% 50% 60% 50% 60% 70% 70% 50% 50% 70% 60% 70% 71.0% 71.1% 71.0% 80% 80% 80% 1456.4% 13 13 13 14 14 14 14 14 14 14 14 Total 80% 80% 2011 2012 2013 2014 2011 2012 201 56.4% 60% 60% 2011 2012 2013 2014 2011 68.6% 60% 60% 68.6% 68.6% 70% 70% 50% 50% 50% 80% 70% 80% 70% 70% 50% 70% 71.0% 70% 60% 70% 71.0% 71.1% 56.4% 2011 2012 2013 2014 2011 2012 201 56.4% 60% 50% 60%2011 2011 Trucks 2012 2013 20146580% 77 68.6% 68.6% 68.6% 80% 80% 80% Dump 70 69 120 119 160 143 134 116 118 104 1,295 50% 70% Articulated 70% 50% 70% 80% 50% 70% 70% 50% 70% 60% 70% 60% 60% 60% 60% 71.0% 71.0% 60% 60% 60% 56.4% 2012 2012 2013 2013 2014 60% 56.4% 60% 2011 2011 2012 201 60%2011 50% 60%2011 2014 71.1% 68.6% 68.6% 68.6% 50% 50% 70% Crawler 70% 70% 70% Dozers 50% 50% 362 309 71.0% 43560% 38470% 328 404 433 495 401 360 60%349 4,457 60% 2012 2012 2013 2013 2014 2011 2012 201 70% 60% 70% 60% 2011 60% 197 60% 50% 60%2011 2014 71.0% 40% 56.4% 50%2011 56.4% 50% 68.6% 68.6% 68.6% 50% Loaders 70% 70% 70% 60% 60% 013 2014Crawler 2011 2012 20134 20141370% 2011 2012 2014 10 50% 164 2011 201 70% 50% 50% 60% 60% 60% 60% 60% 7 2013 1450% 4 50% 19 9 27 2013 40 11 50% 50% 50% 2011 50% 50%2011 40% 6 50%2011 2012 2012 2013 2014 2011 2012 201 2014 2011 60%2011 2012 2014 2011 60%2011 201220112012 2013 2014 2011 2012 2012 2013 2013 2013 2014 60% 0132014 2014 2011 2012 2014 20122013 20132014 2014 2011 201 60% 60% 50% 50% 50% 50% 50% 50% 40% 50% 60% 50% 60% Excavators Crawler, Hydraulic 767 2013 606 2014 965 2014 799 2011 505 2012 678 992 20132012 9412013 1,011 2014 846 695 2011 2013 2014 2011 2011 9,623 2011 2012 2011 - 2012 2012 2013 2014 818 2014 0132014 2014 2011 2012 20112012 2013 201 50% 50% 50% 50% 50% 50% 40% 50% 60% 60% 60% 60% 60% 2011 2013 2014 2011 2012 2013 2013 32 2014 2014 0132014 2014 2011 2012 2014 20112012 24 2013 2012 2013 2014 2011 201 2011 2012 50%201180% Excavators -2012 Wheeled, Hydraulic 39 2013 16 2014 3750% 950%2011 19 2012 20 26 28 38 27 315 50% 50% 80% 80% 40% 50% 2012 2014 201150% 2012 2013 2013 2014 2011 2012 2013 2011 2012 2014 2011 2012 2013 2014 2014 2011 80% 70% 80% 70% 013 2014 70% 2011 2012 2013 2014 2011 2012 2013 2014 2011 201 80% 80% 80% 50% 50% Mini Excavators 909 702 99650% 1,02850% 468 724 1,132 1,222 1,244 1,083 968 50%93172.0% 11,407 72.0% 2014 2012 2013 2013 2014 80%2011 70.2% 2012 2013 80%2011 2012 2014 2012 2013 2014 2014 70%2011 70%201180% 70%2011 80% 80% 2012 70% 70% 70% 72.0% 72.0% 71.1% 71.1% 97 2.2% 11080% 8370.2% 96 - SCISSOR 134 107 134 125 113 70% 69 1,278 70% Graders 80% 80% 80% 80% GENERATORS 2.0% 71.1% −121 −2.6% 70% Motor AWP LIFTS GENERATORS − − LOADERS 2.0% −89 2.2% EXCAVATORS WHEEL 60% 70% 72.0% 70% 70% 60% 70% 60% 72.0% 70% 71.1% 71.1% 71.1% 56.4% 70.2% 70% 80% 56.4% 80% 70% Scrapers 70% -80% Conventional 6 1 670% 370% 8 80% 16 13 1 8 14 60% 472.0% 80% 83 60% 70% 72.0% 70% 3 70% 60% 71.1% 71.1% 71.1% 60% 60% 60% 56.4% 56.4% 70.2% 70% 60% 70% 726 70% 70% 70% 70% 70% 60% Skid-Steer 70% 60%93572.0% 71.1% 71.1% 71.1% 733 Loaders 1,238 1,319 56.4% 1,63280% 1,11580% 879 1,112 1,126 1,084 791 12,690 56.4% 50% 60% 72.0% 60% 60% 60% 50% 60% 50% 60% 70% 70.2% 60% 70% 60% 56.4% 70% 70% 70% 50% 60% 60% 60% 71.1% 71.1% 50% Tractor Loader 50%356 369 290 56.4% 41860% 431 246 60% 413 399 390 401 461 4,501 50% Backhoes 50% 50% 71.1% 327 013 2014 60% 2011 2012 2013 2014 70% 2011 2012 2013 2014 2011 201 50% 60% 60% 60% 60% 60% 70% 60% 50% 60% 50% 40% 50% 50% 50% 50% 56.4% 40% Wheel Loaders < 80 HP 50% 40% 82 56.4% 86 94 131 134 70 105 108 109 96 103 91 1,209 2011 2012 2012 2013 2013 2013 2014 60% 2011 2012 2013 2014 0132014 2014 2011 2012 2014 2011 2012 2013 2014 2011 201 60% 2011 50% 2014 2011 2012 2013 2014 2011 2012 50% 50% 40% 50% 50% 50% 50% 40% 50% 40% 60% 60% 60% 2011 2012 2013 2011 2014 530 2014 0132014 2014 2011 2012 2014 20112012 2013 2011 201 2011 2013 2014 2011 2011 7,306 2012 Wheel > 80 2012 HP 590 2013 563 2014 86550% 55260% 508 673 20132012 6612013789 2014 595 607 40% Loaders 50% 373 2012 50% 50% 50% 80% 80% 50% 40% 40% 50% 50% 2012 2013 2013 2013 2014 60% 0132014 2014 2011 2012 2014 20122013 20132014 2014 2011 201 2011 40%201180% 2012 2014 2011 50%2011 201220112012 2013 2014 2011 2012 80% 40% Grand2011 50% 40% Total 5,729 4,616 2,789 3,917 5,146 5,2072013 5,439 4,561 54,328 50% 50% 50% 2014 2012 2013 4,564 2013 4,070 2014 2011 2012 20144,121 4,169 2011 2012 2014 2011 2012 2013 2014 2011 2012 80% 80% 80% 013 2014 40% 2011 2012 2013 2014 50% 2011 2012 2013 2014 201 80%2011 69.8% 80% 80% 80% 70% Data Associates, Charlotte, N.C. 70% by Equipment 40% Supplied 40% 2014 2012 2013 2013 2014 50% 2011 2012 2013 80% 2012 69.8% 2012 2014 2011 80% 2012 2013 2014 2014 80%2011 80%201180% 80% 80%2011 72.0% 70% 70% 72.0% 70.2% 80% 80% 69.8% 80% 80% 70.2% 70.2% 80% 80% 80% 70% 70% | Construction Equipment Distribution | January 72.0% 70% 24 | www.cedmag.com 70% 70% 70% 70% 72.0%2015 80% 80% 70.2% 60% WHEEL LOADERS − 60% 69.8% 80% 80% 80% % 2.2% 70.2% 70.2% 70% 70% 70% 70% 72.0% 2.2% EXCAVATORS − WHEEL LOADERS 72.0% 70% 70% w w w . r o u 60% 70% 70.2% seanalytics.com 70.2% 60% 70.2% 80% 80% 72.0% 70% 70% 69.8% 80% 80% 80% 70% 70% 72.0% 70% 70.2% 70.2% 70% 70% 60% 60% 60% 60% 50% 50% 70.2% 60% 60% 60% 70% 70% 70% 70% 70% 2011 2012 2013 2014 60% 2011 201 72.0% 60% 60% 60% 50% 50% 72.0% 60% 60% 60% 70.2% 70.2% 70.2% 70% 70% 2011 2012 2013 2014 2011 201 24_Data_Trends_KP.indd 24 12/22/14 4:01 PM 60% 60% 50% 50% 50% 50% 70% 70% 70% 60% 60% 60% 60% 60% 50% 50% 2014 2011 2011 2012 2012 2013 2013 2014 50% 2012 2013 2014 2014 60%2011 201 50% 50% 50%2011 2011 60% 2012 2013 2014 2011 50% 2012 2013 2014 2011 2012
>> DATA TRENDS ROUSE ANALYTICS
Dodge Momentum Index Moves Higher in November
in commercial was result of greater planning activity Highest levelUtilization since early 2009– rise Physical sector, up 4.0 percent for the month.
PHYSICAL UTILIZATION
The charts below shows physical utilization by equipment category. Physical utilization is the percentage of fleet cost which is on-rent during a given period. Physical utilization is cost weighted. “On Rent” and “In Fleet” status are determined on a nightly basis 7 days a week, 365 days a year. A unit is “On Rent” if it is at a job site earning rental revenue. A unit is “In Fleet” ROUSE ANALYTICS if it is a rental asset owned by the client. Units out for repair and refurbishment are considered “In Fleet.”
Utilization Physical
The charts below shows physical utilization by equipment category. Physical utilization is the y equipment category. Physical utilization is the percentage of fleet cost which Physical Utilization is on-rent during a given period. Physical utilization is cost weighted. “On Rent” and “In Fle ization is cost weighted. “On Rent” and “In Fleet” status are determined on a nightly basis 7 days a week, 365 days a year. A unit is “On Rent” if it is at a job site earning ren unit is “On Rent” if it is at a job site earning rental revenue. A unit is “In Fleet” if it is a rental asset owned by the client. Units out for repair and refurbishment are considered out for repair and refurbishment are considered “In Fleet.”
The Dirty Dozen -
7 7
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>> MONEY$$$MAN
GARRY BARTECKI
2015 Will Be an Interesting Year In a tax deferral position? I’d start socking away cash for taxes now.
I
If you have not participated in AED’s CODB, it is time to take advantage of this free service provided to members.
cannot believe the new year is upon us. After the last couple of years, I was hoping the horizon for 2015 would be more apparent, but it seems that will not be the case. The world economy keeps on turning, producing both good and poor results. Management folks, saddle up for another year of fun. Some of the areas that will need consideration are as follows: Rental Transactions. Those of you in the game, prepare for additional competition. Those not in the game, figure out what you are going to do. Tax Changes. The “Extenders” are in place for 2014 returns, which should make all of you happy. Those with big tax deferrals, get ready for the accelerated reversals we are anticipating. Telematics. This is going to change the industry and benefit all parties concerned: OEMs, dealers, and customers. You should be able to drive new business opportunities if you master the telematics scene. Costs. Pressure to increase wages. Healthcare costs to be figured out. They keep telling us inflation is under control, but all costs keep on increasing for every line item on our budget. Can we pass these on? Do we need to take steps to improve efficiency to keep costs in line? Calculate the impact on Gross Profit and Profit Before Tax and make necessary adjustments. Oil. I know you were thinking about this as you read the previous paragraph. I didn’t forget. Oil prices can generate both positive and negative outcomes. It can lower your cost of sales for delivery, freight cost, and cost to operate all equipment. On the other hand, it can reduce fuel charges and reduce business from some of your biggest customers if you are lucky enough to be located in an energy field. Interest Rates. One day they are increasing, the next they are not. Bank credit is tight but will loosen up – but then again, maybe not. Probably a toss-up, but not one to be ignored. If you are expecting business growth, better make
sure your bank will support you. Also, check those bank covenants quarterly, especially if you anticipate changes to your bottom line. I prepared this list in order of importance. My choice of Rental as No. 1 and Tax as No. 2 could probably go either way. I say that because the cash requirements could be overwhelming for those with material tax deferrals – this is due to changes on LIFO, LKE and Bonus Depreciation. In any event, you better know what is going on tax-wise because of “Tax Reform.” If I found myself in a tax deferral position I would start putting some bucks aside in a contingent fund. Be sure to hear a live update at Summit on Feb. 11 with AED’s Christian Klein, Ron Hodgeman from WTP, and Rex Collins from Somerset CPAs. In short, plan. And run your business to make money. Better yet, run it to generate free cash flow. CODB Heads-Up
I also want to notify you of upcoming changes to the 2015 CODB report covering 2014 activity. We added some self-explanatory questions to deal with employee productivity, rental transactions, and the tax structure you use for operating your company. This will provide AED with additional knowledge in three important areas for dealers. These new questions will appear in the CODB Survey, which is either sent out to you or you can get it from AED’s website, aednet.org. Last year’s CODB produced some very interesting results, since the size of the “Typical Dealer” and the “High-Profit Dealer” were basically the same. This result made it quite easy to see why and how results are different for both categories. Peer knowledge is a must in this environment. If you have not participated in AED’s CODB, it is time to take advantage of this free service provided to members. The report and a customized analysis are yours when you complete the survey. Watch for it in February. n
GARRY BARTECKI (gbartecki@comcast.net), founder of Dealer-Rental Success LLC, is a financial consultant to the equipment industry. He can be reached at 708-347-9109. January 2015 | Construction Equipment Distribution | www.cedmag.com | 25
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CONDEX PREVIEW <<
Look who’s coming to CONDEX Feb 11-12 to meet with you. And this is just the beginning – don’t miss the show designed exclusively for North American equipment distributors. Up to 1,600 Tons of Cutting Force www.AlliedCP.com • Booth 515 The all-new new Allied AMS Series Mobile Shears from Allied Construction Products, LLC are specifically designed and built for scrap processing, industrial contracting and demolition applications. Allied’s newest full-product line addition, the AMS Series Mobile Shears are available in five models ranging from 795 tons to 1,600 tons of cutting force. • Increased pin diameter allows for greater cutting force • Faster cycle times from an integrated speed valve mean lower costs per ton • Increased speed on 360-degree rotation offers greater operator flexibility • Four-way indexable cutting blades can cut on all four cutting edges • Bolt-on bracket allows for mounting on most excavators • Integrated speed valve is more compact and is comprised of only 13 parts • Manufactured with light weight Weldox 900 material increases strength and fuel economy • Auto-Guide mechanism delivers force on upper jaw preventing flexing
Hydraulic Attachments to Cut Rock Concrete and Frozen Ground & Material www.antraquip.net • Booth 210 Antraquip Corp.’s U.S.-made hydraulic attachments were developed from a need to help contractors and engineers cut or grind hard to medium rock, concrete, and frozen ground/ material. Engineers quickly discovered numerous applications to increase production including trenching, demolition, scaling, soil remediation, tunneling, underwater cutting, general rock excavation and more. Our Hydraulic Cutter offers: • Low-noise, vibration-free (perfect for precision engineering or sound sensitive projects) • Reusable material (create usable backfill, cutting major off-site crushing expenses) • Torque and power (low speed/high torque proven technology borrowed for underground mining) Hydraulic cutter attachments deliver high production at a low cost making them ideal alternatives to hydraulic hammers. In addition Antraquip also offers carbide and diamond saws, patch planers (milling machines) and specialized soil mixing/remediation attachments.
Mobile Access to Rental Unit Information With A.I.M. chartersoftware.com/aspen-rental • Booth 700 Using A.I.M. (ASPEN Interactive Mobility) mobile access to the ASPEN Dealership Management System, dealership staff can now view rental rates, unit condition, attachments, photos, meter readings, invoices, and more from their mobile device. New A.I.M. functionality helps dealerships track the condition of units between rentals by logging up-to-the-minute unit photos and communications. Remote employees or staff in the rental yard can use A.I.M. to view rental rates, as well as view and upload photos from their mobile device to the unit record. ASPEN is a complete dealership system with powerful tools to manage all dealership operations including sales/rentals, service, inventory, customers and accounting. A.I.M. provides on-the-go access to important information about parts, work orders, rental and non-rental units, invoices and communications from supported mobile devices such as smart phones and tablets. (CONDEX Preview continued on next page)
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>> CONDEX PREVIEW Diamond Mowers Introduces Excavator Forestry Head diamondmowers.com • Booth 623 The Excavator Forestry Head is the latest made-in-the-USA innovation from Diamond Mowers. For jobs that call for more than a mower, the excavator-mounted forestry head doesn’t just clear trees, it devours them. With hardened steel, replaceable teeth the Excavator Forestry Head will grind stumps under ground and mulch material finely enough for composition. Safer than using a boom rotary, the head includes an open front that exposes the blade to feed material quickly, while steel deflectors direct material safely downward after it’s mulched. With Diamond, you’ll never sacrifice safety for performance.
Dealer Management Systems Plus Cloud- and Web-Based Tools www. www.discorp.com • Booth 200 DIS Corporation is the largest independent provider of machinery dealership business computer systems to North American. DIS supports construction and farm equipment dealers with premier in-house dealership management systems as well as hosted cloud based systems, web based management tools, and mobile apps for dealership staff. Industry leading integrated online applications for dealership customers are also available. DIS Customers range from a single location with several workstations, to dozens of locations with hundreds of workstations. Founded in 1980, DIS currently supports over 2,500 equipment dealership customers in the U.S. and Canada. For more information, please call (800) 426-8870.
eXtend Takes Equipment Rental Business To New Levels Of Success www.e-emphasys.com • Booth 306 e-Emphasys offers dealers cloud and on-premise options to suit every need. • Proven and successful - with eXtend you are not taking any chance • End-to-end solution covers planning-to-cash cycle: - Equipment life cycle cost for maximum profitability from every asset, controlling WIP, optimizing inventory - 360-degree view of financials with drill-down capabilities for every piece of equipment, order, department or resource • Plug-and-play repository of industry best business processes: increases efficiency, eliminates long training hours • Built-in BI tools for analytical reporting and KPIs • Enterprise mobility to run business on the go • Short implementation cycle – less than one-third of the time taken by competitors • Some reported 30 percent reduction in operating costs. • Every dealership reported quick ROI after deploying eXtend
28 | www.cedmag.com | Construction Equipment Distribution | January 2015
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(CONDEX Preview continued on page 30
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>> CONDEX PREVIEW EPG: Our Experience, People, Commitment Set Us Apart
www.epgins.com • Booth 410 EPG Insurance, Inc. has been offering innovative insurance products to the construction industry for over 27 years. These products include Extended Service plans for new and used equipment, Physical Damage Insurance, Loss Damage Waiver for rental equipment and Certificate Tracking for rental equipment. Anyone can create a program, but do they have the people and the reputation to back it up? We believe it is our experience, our people and our commitment to the construction industry that sets us apart. Meet your EPG internal support staff: Left to right: Front Row: Belman Kraul (IT), Jennifer Glidewell (ESPP), Dana Huffman (PDI), Kristen McClure (CSR), Liz Fernwalt (Trucks), Lisa Post (ESPP), Anita Hayes (CSR), Margaret Brown (Commercial), Aaron Daniel (ESPP). Second Row: Suzanne Tutor (HR), Debra Bumgarner (Commercial), Sherry Thorpe (Accounting), Heather Berg (Accounting), Pam Dewitt (Commercial), Tracy Hilliard (Trucks), Barbara Beckman (ESPP Claims), Stephanie Hawkins (ESPP), Shane Jenkins (Claims), Amber Merrill (PDI/Trucks), Gary Bullwinkel (IT), Mark Turnage (IT), George Eivaz (IT), Nancy Howell (PDI). Back Row: Jonathan Less (IT), Rick Austin (Commercial), Allen Dewitt (ESPP Claims), Jerry Phillips (Commercial), Bob Beckman (ESPP Claims), Wayne Smith (IT), Don Seymour (IT), Brandon Thornburg (IT). Not Pictured: Amber Roetker (TrackCert), Ashley West (Accounting), Bob Hardy (Commercial), Gary Ramsey (ESPP Claims), Larry Dejournet (IT), Leigh Thomas (Licensing and Compliance)
Fecon, Inc. Introduces New Depth Control Rotor www.fecon.com • Booth 323 Fecon, Inc. introduces the Depth Control Rotor system (DCR), bringing a new level of performance and value to mulching, controlling the depth of bite, and efficiently directing material flow so that energy is reserved for production. DCR cuts faster, delivering better fuel economy and more uniform particle size. The DCR system is an evolution that builds on Fecon’s reversible Samurai Knife Tool. Depth control rings of the DCR system work in harmony with the Samurai Knife to enable more cutting with less HP. The shape of the Samurai knife edge efficiently slices as it chips, providing greater forgiveness on rock than straightedged tools or saw teeth. Depth control rings lend further impact protection to the tool body, and reduces shock loading to the mechanical or hydraulic drive line. DCR will be available in skid steer model mulching attachments and most PTO and hydraulic prime mover models in 2014.
Hydraulic Excavator Kits for the Top 6 OEM Brands and More www.hkx.com • Booth 201 HKX is the leading supplier of standard, custom and conversion aftermarket auxiliary hydraulic kits for excavators. Located near Seattle, Wash., HKX works directly with the top six construction equipment manufacturers, their distributors and dealers, in addition to attachment manufacturers. All kits are designed to facilitate quick installations, with standard kits accommodating next-day delivery service within the U.S. and Canada and airfreight service to Mexico, Latin America, Asia, the Middle East and South Africa. 30 | www.cedmag.com | Construction Equipment Distribution | January 2015
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CONDEX PREVIEW << Hydrema Updates the Popular 912HM Dumper www.hydrema.com • Booth 413 The 912HM is Hydrema´s most successful dump truck in the U.S., mostly due to its extraordinary accessibility off road and the absolute lowest ground pressure of the market. Combined with high durability and low maintenance, the compact and articulated dump truck is a solid choice for construction works in narrow areas, muddy conditions or in rough landscapes. Many 912HM are also widely used at golf course construction and maintenance. The 912HM is available with 180 degrees tipping (MultiTip) or as a Multichassis version, without bed. The new 912HM is updated with a state of the art Cummins stage 3b engine, performing 140 hp, which gives a maximum torque of 622 Nm. This is a 20 percent increase in performance. More updates include: • Better service access with complete new bonnet • More comfortable entry to the cabin • Redesigned climate system, giving better cabin climate control • Better and more storage facilities
Harsh Environment No Problem for IC50 Crawler Carrier www. ihices.com • Booth 711 The IHI IC50 crawler carrier from IHI/Compact Excavator Sales, with low ground pressure of 3.13 empty to 5.16 psi loaded, can perform in a range of challenging environments. The IC50 is completely customizable to meet your water, gas, oil, electric or pipeline needs. A full range of attachments and applications include digger derricks, winches, lifts and seismic guided drills. With a maximum payload of 8,820 pounds, heaped bed capacity of 5.0 cubic yards, and a two-speed manual hydrostatic transmission, the IHI IC50 provides ample hauling capacity. Standard equipment includes a four-post ROPS canopy and 120-HP Mitsubishi diesel engine, also available with a fully enclosed heated and AC cabin. The IC50 is one of four IHI crawler carriers.
Infor Equipment Software: Designed For Dealers By Dealers www.infor.com • Booth 209 Whatever your role in the equipment life cycle, speed matters. To respond quickly to today’s shifting customer and market demands, you need tools for continuous control and visibility into the lifecycle of every piece of equipment you deal with. Infor Equipment provides it all – the broadest, deepest single integrated software system created specifically for equipment-centric companies that sell, rent and service equipment. Infor Equipment is built to meet the needs of both mid-size and large equipment companies. It can help you predict future demand for equipment, parts and service, and capture accurate data on sales, machine type, serial numbers, warranty, service, claims and end of life to improve your efficiency and support decision making. With 25 years of equipment industry experience built in, Infor can help you achieve new levels of profitability and growth, no matter how many branches you have across multiple territories, no matter how demanding your customers. For more information or to arrange an appointment at the Summit, please contact Sam.Pauline@infor.com; 651-767-4209. (CONDEX Preview continued on next page) January 2015 | Construction Equipment Distribution | www.cedmag.com | 31
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>> CONDEX PREVIEW
Streamline Your Certificate Tracking jtbatesgroup.com • Booth 610 JTraxis certificate tracking from J.T. Bates Insurance Group just got better. JTraxis can now track claims and sales tax exemption forms, and boasts new and improved features to the expiring certificate renewal process: • Verification: JTraxis verifies the certificate of insurance is both current and valid, verifying proof of coverage. • Prevention: JTraxis offers a proactive solution to certificate management that limits your company’s exposure. • Protection: JTraxis helps you protect your assets and is fully endorsed by J.T. Bates Insurance Group, a consulting firm with over 30 years’ experience in the equipment industry. • Archiving: With JTraxis, your certificates are stored in a secure database, so there is no concern about losing business-critical information with our paperless archiving system. Call J.T. Bates Insurance Group today at 877-900-8729 to find out how we can help you streamline your certificate tracking.
Jamie Bates
Really Want To Make
Customers Happy?
Show Them Some
Lube
When customers ask about automated lubrication for their heavy trucks and equipment, give them the answer they’re looking for: a Beka-Max system custom fit to their application! • Complete range of autolube and multi point lubrication products • Unmatched field support for you and for customers • Custom-assembled and serviced in North America • Professional-grade MATO manual and powered grease guns
Become a Beka-Max dealer. Talk to us at the AED Summit, Booth #909
1.888.862.7461
ww w. beka-lube.com B E K A
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L U B R I C AT I O N
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Please visit us in CONDEX Booth 909
S I N C E
1 9 2 7 2014-12-09 1:40 PM
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CONDEX PREVIEW << Attachments Are Our Only Focus www.loweman.com • Booth 606 At LOWE, attachments are not just add-on items to our product line, they are our entire focus. Since our first hydraulic auger attachment was sold in 1971, Lowe Manufacturing Company, Inc. has followed a simple philosophy: “Design and build specific products that offer the best performance, durability, and overall value in the attachment industry.” We know we have to be better than the big name competition or we would not survive. LOWE is a highly regarded producer of auger, auger bits, trenching, and grapple attachments for compact equipment with a worldwide reputation. There is an element of personal family pride that goes into each product built. Family ownership means we have only the customer to answer to. There are no extra layers of management, no public stockholders clamoring for a dividend, and no parent corporations that would interfere with this relationship. For more information, visit our website and come visit us at CONDEX.
Lowe Manufacturing coMpany, inc.
18903 High point road Viola, wi 54664 pH: (888) Dig-Lowe (344-5693) fX: (608) 538-3995 www.LoweMan.com Lowe@LoweMan.com
PRODUCTIVE, DURABLE, VALUE. ® AUGERS TRENCHERS
GRAPPLES
Please visit us in CONDEX Booth 606
(CONDEX Preview continued on next page)
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January 2015 | Construction Equipment Distribution | www.cedmag.com | 33
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HCT Has the Right Connections Leaking hydraulic fluid can be a minor annoyance, or a major catastrophe. Either way, HCT connections minimize the chance for leaks to develop. • OEM style ORFS or CD62 4 bolt flange connections • Higher safety standards • Efficient designs with fewer connections, reduce the number of potential leak points
Savings For Everyone on AuctionTime.com
www.machinerytrader.com • Booth 422 Auctioning and bidding on equipment has never been easier or more cost effective. Powered by MachineryTrader. com, TractorHouse.com, TruckPaper.com, and MarketBook.com, AuctionTime.com brings together buyers and sellers to move equipment at auction values. Sellers list equipment on AuctionTime.com for a low flat fee. Bidders pay no buyer’s fees whatsoever. The result is savings for everyone.
Auction listings appear in AuctionTime.com’s searchable, user-friendly interface. The site lets visitors access listings from anywhere in the world 24 hours a day, seven days a week. Unlike conventional auctions, bidders can discuss specifics about the auction pieces with the actual seller, or go see the actual machine themselves. Auctions come to an end each Wednesday with live bidding open at 9 a.m. each Tuesday, and proxy bidding opens seven days prior to auction end time.
Welded tube ends for maximum strength and durability.
Breaker Can Pound at Up to 1,000 Blows a Minute
okadaamerica.com • Booth 808 Okada America offers the lightweight but highly productive Top21LT hydraulic breaker for compact loaders, skid steers, and mini excavators with machine sizes ranging from 1,800 to 5,000 pounds. With a working weight of 195-255 pounds, this breaker can operate at a frequency of 550 to 1,000 blows per minute. The smooth running design of the Okada hydraulic breaker results in ease of operation and endurance.
www.hctkits.com 888.603.0080
250 Fluid Drive • McDonough, GA 30253 Please visit us in CONDEX Booth 702 34 | www.cedmag.com | Construction Equipment Distribution | January 2015
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CONDEX PREVIEW << Every Penny Saved Is A Penny Earned – Just Ask Your Customers
www.rubblemaster-americas.com • Booth 521 RUBBLE MASTER has helped its customers save money for years by providing fuel-efficient and economical on-site crushing and recycling solutions. Our customers face tight environmental regulations, and the cost for hauling material back and forth and dumping waste increases every year. RM is second to none in the North American market. The machines weigh between 32,000 and 74,000 pounds and are extremely easy to move. Thanks to the GO! principle, they are also easy to operate and use. Numerous customers in North America rely on RUBBLE MASTER. With 20-plus years in the recycling industry and 10-plus years in North America, RUBBLE MASTER has changed the way of doing business for many contractors, who include concrete contractors, road builders, demolition contractors, and asphalt and paving contractors. Make money by helping your customers save money. Call now: 800-230-0418 to experience the world of RUBBLE MASTER.
Introducing Advanced Telematics System on Sany Excavators
www.sanyamerica.com • Booth 701 Sany America is proud to announce the implementation of a state-of-the art telematics system on excavators 7 metric tons and larger. Sany America has partnered with AT&T to provide this advanced solution, allowing customers realtime visibility of location, machine usage, idle time, fuel consumption, operation parameters, maintenance scheduling, fault information, and many more data points. In addition to a customized website based on user profiles, the user interface is also available as free iOS and Android apps, allowing site managers and service technicians the ability to view the health and utilization of their fleet from tablets and smartphones. Excavators will be furnished with the telematics module and three years of complimentary service standard. Satellite service is optional for working in locations where cellular service is unavailable. After implementation on excavators, Sany America will integrate the telematics solution across their remaining lineup of equipment.
Talbert Trailers Meet Rigorous Customer Specs
www.talbertmfg.com • Booth 725 Talbert Manufacturing has been building world-class heavyhaul and specialized trailers to rigorous customer specifications since 1938. Talbert’s product line covers construction, commercial, military, aerospace, and energy applications. Our trailers include lowbeds of all types; mechanical and hydraulic removable gooseneck, extendible, east/west coast spread axle, and multi-axle configurations, as well as tag-a-long, tilt, utility, traveling axle, and hydraulic tail trailers. • Durability is a key commitment of the Talbert engineering team, and that’s why more than 90 percent of our trailers built in the past 25 years are still on the road today. • Resale value is a critical factor in total ROI and the Talbert name assures a premium resale price. • Safety for the heavy loads is not something we take lightly. If planning to haul maximum capacity every day, think Talbert. • In North America, Talbert trailers are sold and serviced through a network of approximately 80 dealers and more than 190 locations. January 2015 | Construction Equipment Distribution | www.cedmag.com | 35
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>> CONDEX PREVIEW New Coolant Heating Solutions From Webasto
www.webasto.us • Booth 615 Webasto’s new Thermo Pro 50 is an engine-off coolant heater with compact dimensions and lightweight design for specialty commercial vehicles and offhighway equipment. The Thermo Pro 50 is capable of up to 17,000 Btu/h of heating power and is available as a standard or heavy-duty kit. Bio-diesel compatible, the Thermo Pro 90 offers quick warm-up times, low power consumption and offers up to 31,000 Btu/h of heating power. Both of the new Thermo Pro coolant heaters are available now and offer automatic high altitude adjustment up to 11,000 feet, improved fan motor durability, and a better performance and service life.
Dual-Lock+ Hydraulic Multi-Pin Grabber Coupler
www.werk-brau.com • Booth 905 Werk-Brau’s New Dual-Lock+ Coupler is the most reliable, safe, cost effective and user-friendly coupler on the global market. The Dual-Lock+ Coupler is dual locking, meaning attachments remain securely engaged on both pins in the event of loss of engagement force. Available for all machines from 5 to 120 tons, the couplers compact design with minimal moving parts puts it at the forefront of coupler performance worldwide. When safety is paramount, demand the Dual-Lock+ Coupler. Please visit our website to learn more and see additional photos and videos, or call 800-537-9561.
Please visit us in CONDEX Booth 808 36 | www.cedmag.com | Construction Equipment Distribution | January 2015
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Please visit us in CONDEX Booth 807
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3/17/2014 12:51:11 PM 11/21/14 2:55 PM
>> MARKET CHECK
GILES LAMBERTSON
Recovery’s Got Legs In Orlando, Some Shaky Knees, Too CED takes the pulse of equipment business conditions in the host city of AED’s 2015 Summit. Major seven-year DOT project begins this year, overshadows housing doubts.
T
he economic collapse that the U.S. experienced in 2008 struck Orlando one year earlier. While equipment dealers and contractors in metro Orlando feel much better today than they did seven years ago, underlying nervousness remains. “I don’t want to look a gift horse in the mouth, but I still think the economy is pretty precarious,” said Steve Porteus, north Florida regional manager of Flagler Construction Equipment. “We are pretty optimistic. We have a very strong market – but we don’t know what’s driving it.” Porteus says he is not alone in distrusting the recovering economy. “I deal with a lot of contractors who are very successful and I put a lot of stock in their opinions. They are not buying into it. They are very, very cautious on the sustainability of what is happening right now.” The view ahead varies from conversation to conversation, according to Chris Wood, general manager of Orlando’s Nortrax John Deere Construction dealership. “It all depends on who you talk to,” he said. “Some are very optimistic that it will continue. Others
Photo courtesy of Linder Machinery
are concerned about another bubble. I’m cautiously optimistic.” New Housing Concerns
Yet in the second quarter of 2014, the MetroStudy research group characterized home construction in Orlando’s four-county metro area as flat. In a presentation to Orlando developers, the researchers also acknowledged that home inventory was a little high, but said the level was not “worrisome.” Forgive Sunshine State businesspeople for worrying a little anyway. “Housing drove the Orlando construction market until the collapse in 2007,” Porteus said. “We overbuilt the heck out of it. Today, there still seems to be an awfully large existing stock of houses, plus foreclosures and that kind of stuff, yet developers are breaking ground for new homes! It’s a little bit of a dichotomy: On the one side is the housing debacle and on the other side it is full steam ahead.” Orlando does not perfectly reflect Florida’s demographic and economic make-up. The central Florida city is considered the “Theme Park Capital of the World,” with attractions ranging from Disney World and Universal Orlando (69,000 and 17,300 employees, respectively) to SeaWorld and LEGOLAND. Consequently, many jobs in Orlando are in the tourism service sector, which is not a notably highpaying industry. According to the U.S. Census Bureau, the median income in Orlando is several thousand dollars less than the median for the state, with Orlando
having a higher proportion of residents below the official poverty level.
Florida and the Southeast in general continue to experience incredible migration, which probably will continue. Just 40 percent of Orlando residents own homes versus 68 percent statewide. This may explain why housing starts in Florida jumped beginning in 2013 – yet remained flat in Orlando as of mid-2014. Still, flat was an improvement over the downward trajectory of recent years. In fact, some say the severe decline in construction activity and equipment sales in Orlando in 2007 was partly because times were so good leading up to it. Wood at Nortrax has been working in central Florida for 19 years and says 2004-06 were the best years he’s ever seen. In contrast, the post-2006 years were the toughest. “We experienced a housing bubble like a lot of places did. It was like a train that was hard to stop, but it did stop. Almost overnight. It was very difficult.” Boom to Bust to Boom
When the collapse came, McKinnon Equipment had a long way to fall. The Tampa-based JCB dealer reached bottom in 2009, says Senior Vice President Alex McKinnon, when the dealership sold 339 machines. By
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A Nortrax customer works at a housing subdivision project in West Orange County, Fla.
comparison, machinery sales this year will top 1,600. “Just ride around and look at all the new buildings and development, and all of the dirt being pushed around and investments being made. Orlando is growing again,” said McKinnon. Grant Adams agrees with that assessment. The vice president of marketing for Linder Industrial Machinery says the market across Linder’s seven Florida locations dropped a full 80 percent during the recession, from a high of about 4,500 machines in 2006 to 862 in 2010. But sales at the Komatsu dealer are up 20-25 percent now over a year ago, including in Orlando, with sales to end-users fully 40 percent larger. “We see apartment complexes going up all over the place,” Adams said, voicing confidence that the recovery has legs. “Florida and the Southeast in general continue to experience incredible migration, which probably will continue. Last year was one of the coldest winters in the last 30 years and this year could be worse. The population is aging and, as the economy improves, more people will be buying homes here.” That’s a familiar theme for Florida construction – but what’s new for
Orlando and exciting to Adams and equipment dealers is a mega-transportation project called “I-4 Ultimate.” The Florida Department of Transportation will break ground in 2015 on the 21-mile re-engineering of the interstate highway that slices through Orlando. The $2.3 billion public-private partnership project will dramatically upgrade the I-4 corridor from Orange to Seminole counties. A team of contractors led by Orlando-based Skanska USA will construct two new express lanes in each direction; widen, replace or add 140 bridges plus build two temporary bridges; and reconstruct 15 major interchanges. The project will consume almost seven years. While that surely sounds like interminable aggravation for Orlando commuters, equipment dealers happily anticipate it. “The fastest-growing market for us will be the I-4 corridor around Orlando,” Adams says. Porteus expects Flagler’s Orlando dealership to win its share of equipment sales as I-4 contractors gear up for seven years of moving dirt and building bridges. “We feel the project will pretty well drive the Orlando market singlehandedly, because there will be tons of other things going on as a consequence.”
In fact, Wood predicts the total spend on I-4 and related projects will reach $3 billion. “It is going to be interesting.” Labor
A wild card in the deck is construction labor, including President Obama’s November tweaking of immigration policy. “I’m not sure about the new immigration situation,” McKinnon says. “What everyone will tell you is that all their workers are documented anyway, so I don’t know what kind of impact [Obama’s directive] will have. I do know there is a shortage of labor. Contractors are trying to steal people from each other.” Nortrax’s Chris Wood suggests the workforce situation may be coming to a head in central Florida. “Field labor is very hard to find,” he said. “They are trying to find workers to support the work they have right now, yet estimates are that the I-4 project is going to employ 1,000-1,500 workers. You can imagine how extremely tight the labor market is.” Trending Forward
So dealers are hoping the bustle of late 2014 continues. If it does, they will face the stresses of shuffling inventory to (continued on page 42)
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DEMAND SPURS NEED FOR EXPANDED DOOSAN DEALER NETWORK North American dealer network grows, but good dealers are still needed
Doosan continues to emerge as a leading heavy equipment brand in North America, but its roots in construction equipment go back 75 years. Today, the company’s heavy construction equipment comprises a full range of
Already a strong international brand, the organization aspires to be a top global leader in the construction equipment industry by continuing to produce performance-driven products for customers in several markets and supporting them with a growing network of successful dealers. The Doosan strategy has firmly positioned the manufacturer in the global top five, and momentum is building. “Doosan is equal to, if not better than, the top four heavy equipment manufacturers in the world because it provides high-performing equipment, a solid management team, an excellent marketing strategy and the dealer tools you need to compete for a sale, all at a price that beats the competition,” says Giovanni Albanese Jr., assistant general manager, Equipment East.
crawler excavators, wheel
Opportunities with industry’s emerging leader
excavators, log loaders,
The ability of Doosan to meet its aggressive global goals is integrated with a clear commitment to North America. It starts with advanced products that are manufactured in South Korea, Europe and the United States, as well as its state-of-the-art service and sales training facility based in Suwanee, Georgia, and parts distribution center located in Chicago. All of these functions – along with the North American dealership network – are supported from the company’s headquarters in West Fargo, North Dakota.
material handlers, wheel loaders, articulated dump trucks, attachments and fleet management solutions.
The Doosan brand is evolving: Sales are on the rise, parts and service activity is increasing and the dealer network is expanding. Providing coverage throughout North America, Doosan has experienced a more than 60 percent increase in dealer growth over the past five years. The combination of a growing distribution channel, a maturing brand and improving markets has created the ideal time for considering a new opportunity to supplement your business with the industry’s emerging leader.
Dedicated dealer training and development The Doosan commitment to dealers includes providing the business tools and support needed to establish the brand and compete aggressively in local markets. One of a Doosan dealer’s most significant resources is The Real Operation Center (ROC) near Tucson, Arizona. Recognizing the valuable role training and demonstration plays in the acquisition process, Doosan developed The ROC to provide a hands-on operation and learning environment for dealers in real terrain at a dedicated venue. In an era when it’s rare to sell a machine without a demonstration, The ROC has been a game changer for Doosan. Not only does it help the company convey a greater understanding of the Doosan brand, but it has quickly become regarded as one of the
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industry’s most respected sites for hosting customer experience events that often help dealers close deals. “All of our salespeople have been eager to attend these training events,” says Jeff Boyle, sales manager, H&E Equipment, “and there are enough opportunities that we’d like every salesperson to take customers to The ROC each year, and I’m talking the entire H&E footprint.” Dedicated training is also demonstrated with Doosan University, a robust online tool consisting of courses in sales, service, parts and dealership development. This training initiative is just one component of a new dealer extranet that centralizes all Doosan dealer communication ranging from product information and an ordering portal to warranty and sales incentive programs. It also houses Doosan AdCenter, where dealers can gain professional marketing support and use brandcompliant advertising technologies to execute marketing plans. Finally, Doosan provides opportunities for progressive dealers to take an active role in the evolution of product development and process improvement through key advisory teams and participation at regional and national meetings. And the company reviews performance metrics and recognizes outstanding efforts with dealer principal incentive trips.
to help customers find new solutions to their challenges. They have the staffing capabilities and the capital to expand with a manufacturer who has the same vision. Representing Doosan has been a profitable venture for traditional dealer business models, but it’s also been particularly successful for businesses that are positioned to bolt on equipment distribution to complement existing services. “We knew of Doosan from working in the construction business as a contractor, which is still a division of our company. So we visited The ROC in order to learn more about the company and their products and were very impressed. We thought representing Doosan could take our business to the next level and allow us to compete with the top manufacturers in the world,” adds Albanese.
Building momentum in the field Momentum continues to build – literally – as several Doosan dealers in the U.S. and Canada are investing in dealership expansion or building newer facilities as a result of taking on the Doosan brand. And the industry is taking notice that Doosan has evolved into a top global heavy machinery manufacturer that has the potential to make even greater strides with a larger North American dealer network.
“We thought representing Doosan could take our business to the next level and allow us to compete with the top manufacturers in the world.”
GROW YOUR BUSINESS WITH DOOSAN To learn more about Doosan and how to join its growing dealer network, please contact:
Jody Beasley
New Dealer Recruitment Manager
A catalyst for new business There are several equipment manufacturers to partner with in the construction industry, but what sets Doosan apart as a manufacturer is its ability to produce advanced equipment that lives up to dealer and customer expectations and a mindset to build long-lasting relationships. “Doosan is committed to growth and market share. There are aggressive incentive and finance options, marketing campaigns and assurance for machine and parts availability. Not to be understated is the emphasis Doosan has placed with its dealers and the commitments for training and support,” says Rich Dunham, vice president and branch manager, Craig Taylor Equipment.
“There’s momentum and Doosan is growing and improving its distribution network with the addition of high-quality, financially strong dealers,” says Tim Watters, 2014 AED chairman and president and chief executive officer of New Jersey-based Hoffman Equipment. “If you’re looking for a manufacturer to partner with as opposed to just representing, then Doosan offers a premium product with premium support and is focused on building relationships with its dealer partners.”
250 East Beaton Dr. West Fargo, ND 58078 469-301-0173 Jody.Beasley@doosan.com
DoosanEquipment.com/grow
While Doosan products continue to evolve to meet the changing needs of construction contractors, municipalities and rental companies, the traits of a good dealer never change. Successful Doosan dealers are entrepreneurs who have a vision for growth and are excited
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Glynn General Extended Protection Plans
>> MARKET CHECK
Your Competitive Advantage in a Competitive Market
Glynn General Benefits n GGC’s underwriting partner is AmTrust International which is A rated by AM Best with over 100 years of collective underwriting experience in the Construction and Agricultural Equipment global markets. n GGC has over 27 years of experience administrating extended protection plans. This ensures competitive premiums while also providing fair and reasonable claims reimbursement. n GGC’s knowledge and experience allows for the creation of tailor made programs to meet any need you may have. n An internet accessible administrative system that is efficient and user friendly. n GGC reimburses parts at customer list price and labor at shop rate on all approved claims. n GGC’s program provides peace of mind for your customer knowing that their equipment is protected.
Coverage Types/Coverage Terms n GGC offers extended service protection plans for New and Used Equipment n Power Train, Power Train + Hydraulics, and Full Machine n Used Equipment terms available from 3 months to 2 years n New Equipment terms available from 2 years to 5 years
GGC’s Administrative System via the Web n GGC offers superior administrative capabilities via the internet through our user friendly website: www.glynngeneral.com. n Immediate turnaround of quotes. n Confirmation of the terms and conditions for all available service contracts. n Efficient enrolling of units with automatic invoicing. n User friendly claims processing resulting in satisfactory claims reimbursement. n Account access allowing for constant monitoring of your warranty program.
Contacts in your Region GGC administrative/claims office located in St. Simons Island, Ga Vice VicePresident PresidentSales Operations Slade Rowland 912-638-4320 Slade Rowland 912-638-4320 Southeast/East Territory Manager Vice President Sales Greg Schultz 678-697-2715 Rick Stacy 404-791-9382 Midwest Territory Manager Eastern Territory Manager Ed Semara 414-975-5353 Greg Schultz 678-697-2715 Central Territory Manager Midwest Territory Manager Michael Raley 817-301-7984 Ryan Carter 847-226-6265 West Territory Managers Western Territory Managers Jeremy Cockroft 970-946-8132 Jeremy Cockroft 970-946-8132 Brian Freitag 970-946-8133
(“Recovery’s Got Legs In Orlando” continued from page 39)
beginning to see a backlog of jobs and they’re feeling good about the future. Equipment is a long-term investment and we see the purchasing market growing substantially,” McKinnon added. Chris Wood concurs, but with a caveat. “It is cheaper to own than to rent. Every model shows that. But…” he says, “equipment is getting more and more expensive. We’re almost to the point where the cost line between purchasing and renting is getting close. We’re starting to see that gap close.”
meet demand and training-up their service technicians. The latter is essential because the complexity of new equipment seems to assure that endusers will continue to rely on service centers for equipment maintenance. “Customers have scaled back their maintenance capability and rely on dealerships a lot more,” Porteus said. “Even as we come out of this downturn, I don’t think you’ll see as many contractors dive back into full service and maintenance operations.” McKinnon compares the technology situation to opening the hood of his Ford F-150 and trying to comprehend what he sees there. “Today’s machines are more sophisticated,” he Photo courtesy of Wirtgen America said. “Emissions requirements have made them more complicated. People increasingly Whether bought or rented, what are saying, ‘I don’t have the skill set to equipment is moving in Orlando? do this. My core competency is as a site Dozers are in demand, says one dealer. contractor, not as a fixer of equipment.’” Midsized loaders and excavators, says Another trend that may or may not another. Hybrids? Not so much, accordcontinue is the renting, rental-purchasing to Wood. “The biggest challenge is ing, and leasing of equipment. Adams payoff. If you’re not going to keep it for at Linder Industrial Machinery believes 12,000 hours, it is hard to justify the leases will become even more popular, cost of a hybrid.” along with full repair and maintenance On the other hand, Wood says agreements. He expects end-users who Nortrax sold a lot of hydraulic excavarelied on rental/leasing during the tors and wheel loaders in 2014. What recession to stay with that model of surprised the John Deere dealer was that, machinery procurement. “for the first time in a long time,” wheel But McKinnon thinks outright loader sales topped excavator sales. ownership will make a comeback Finally, McKinnon reports that an old among contractors. Financing is staple, backhoes, are making a comeback. easier now, he says, particularly for He believes concern about the impact of companies that survived the recession sand and water on the undercarriages of with strengthened credit – plus rental skid steer and crawler mini-loaders has companies are raising their rates. “More Florida customers giving rubber-tired people are buying now. Contractors are JCB backhoes a second look. n GILES LAMBERTSON is a retired journalist and freelance writer whose interest in the construction industry goes back to his carpentry days. He can be reached at gparkerel@gmail.com
Brian Freitag 970-946-8133
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GORMAN-RUPP CONSTRUCTION PUMPS ARE ENGINEERED FOR THE TOUGHEST JOBS. AND THE TOUGHEST PEOPLE. The rain hasn’t stopped for days. Neither has he. He’s worried about the weather and his subcontractors. But he’s confident that his pit will be dry. With Gorman-Rupp construction pumps on the job, he knows he can move large volumes of water and debris—and move them fast. And since Gorman-Rupp pumps are built to last with only minimal service and repairs, he knows those pumps won’t quit. With Gorman-Rupp, he’s got pumps that meet the highest standards—his.
THE GORMAN-RUPP COMPANY | P.O. BOX 1217 | MANSFIELD, OHIO 44901-1217 | USA | 419.755.1011 | GRSALES@GORMANRUPP.COM | GRPUMPS.COM 516
© Copyright, The Gorman-Rupp Company, 2014
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Gorman-Rupp – Mansfield Division is an ISO 9001:2008 and an ISO 14001:2004 Registered Company
12/16/2014 1:20:49 PM
>> COVER STORY U.S. BUSINESS OUTLOOK REPORT
JOANNE COSTIN
Construction Recovery May Finally Gain Steam in 2015 Rising activity in housing, commercial construction and oil & gas may speed the pace.
O
ne only has to examine where we are versus the prior peak to realize just how painstakingly slow the construction market recovery has been. Spending on single-family home construction has yet to even hit half of its $434 billion spending peak. Nonresidential construction activity totaled $377 billion through three quarters of 2014, a far cry away from its peak of $501 billion. Similarly, according to AGC data, only three states have hit peak construction employment: Louisiana, Oklahoma and North Dakota. In the U.S. as a whole, construction employment is 21 percent below the peak, compared to the overall U.S. economy, which has been posting record employment numbers.
2014 – Year in Review
AED dealers have taken a slow and steady path to recovery as well. Our annual forecast survey revealed that activity was strong enough in 2014 to bring increased revenues to more than seven of 10 dealers – compared to just 10 percent who experienced lower revenues. Gross margins were up for 55 percent of dealers surveyed, compared to 24 percent who experienced declining margins. Three quarters of the dealers surveyed said their year-end results would be on target with projections made this time last year. Dealers cited surface infrastructure (roads/bridges), housing and commercial building as their leading sources of revenues in 2014. While surface infrastructure remained challenged for much of 2014, gains in housing (+ 20%) and commercial/industrial Construction Recovery for This Cycle Has Been building (+13.1%) were Painfully Slow for Most Sectors likely the key contribuSpending at various points in the past construction cycle ($Billions) tors to revenue gains. Peak Trough 2014(p) “What we are seeing is general contractors are back to work, and we’re getting a lot of business from that, both rentals and sales,” said Gayle Humphries, chief financial officer, JCB of Georgia, based $600
$501
$500
$434
$377
$400
$328
$276
$300
$193
$200 $100
$0
$337
$314
$105
$53
S-F construction
$15
$43
MF construction
Home improvements
Nonres bldg. construction
Note; 2014 estimated through first three quarters; home improvement spending estimated from JCHS LIRA; Source: JCHS and U.S. Census Bureau Construction Spending Put-in-Place
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in Savannah. “Everywhere you go they are building something.” CMD Group (formerly Reed Construction Data) Chef Economist Alex Carrick believes the U.S. economy is currently being driven by an energy sector boom, growth in technology and manufacturing.
“Nine of the 10 best labor markets have either energy or technology as big components of their economy,” “Nine of the 10 best labor markets have either energy or technology as big components of their economy,” said Carrick in a Nov. 20 CMD webinar, which provided insight from three key industry economists. Four of the top markets are in Texas. One example of how the oil market is driving both commercial and residential construction is in Baytown, Texas, where ExxonMobile Chemical Company is building a multibillion dollar ethane cracker. According to one dealer surveyed, residential housing is under construction in anticipation of the arrival of new people to the region. Since 2011, Texas population has grown 1.49 percent. Colorado and Oklahoma are two additional states where dealers have benefited
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from low unemployment, strong housing, and growing energy markets. Unconventional energy/shale oil and gas was cited as a top three sector for driving revenue by 33 percent of AED dealers surveyed. Leppo Rents/Bobcat of Akron experienced more than 10 percent growth in revenues in 2014, even higher than anticipated, largely due to oil and gas activity. And while housing and commercial construction have begun to recover in Ohio, Chairman Dale Leppo says the levels are nowhere near where they were pre-recession. American Institute of Architects Chief Economist Kermit Baker reported in the webinar that while housing construction is on the upswing with just over one million housing starts in 2014, it is still far below historical levels of 1.7 million starts. According to Baker, home prices have recovered about two-thirds of the losses experienced during the recession. Most economists believe it will be a long time before the single-family housing market will fully recover. It is unclear what the long-term psychological impacts of the recession will be on the housing market. Multifamily housing has recovered faster than single-family
construction, as people who lost their homes sought rental units. The multifamily market is on pace to finish 2014 at 353,000 seasonally adjusted units. Another economic driver cited by Ken Simonson, chief economist for the Associated General Contractors, is the expansion of the Panama Canal, set for completion in 2016. This is fueling transportation improvements, port expansion and dredging activity at ports all along the east and West Coast. Forecast for 2015
In 2015, dealers expect more of the same positive results they saw in 2014. Seventy-one percent of AED dealers surveyed responded that 2015 revenues would be higher than 2014, while 24 percent expect the same revenues and 4 percent expect a decline. More than six in 10 dealers expect new equipment sales, parts sales and service sales to increase between 1 and 10 percent. About half of dealers expect used equipment to be 1 to 10 percent higher in 2015. Just over 40 percent of dealers expect a 1 to 10 percent increase in rental. Dealers have good reason to be optimistic. The architectural billings index (ABI) in November was 53.7. This score
reflects an increase in design activity (any score above 50 indicates an increase in billings). As a leading economic indicator of construction activity, the ABI reflects the approximate nine- to 12-month leadtime between architecture billings and construction spending. In addition, the latest new projects inquiry index is 62.7, which shows the direction of activity to be positive. Commercial construction is forecast for double-digit growth (11.2%) in 2015, coming off a strong 2014. Even more encouraging are signs that a recovery in the institutional markets will take hold in 2015. Growth of 5.8 percent is forecast for 2015. There was virtually no growth in this market in 2014. Also continuing to boost equipment activity is housing construction. Economist Baker expects housing starts to increase to 1.25 million starts in 2015, a healthy increase of 24 percent versus 2014. Multifamily residential construction will continue to outpace singlefamily residential construction. â&#x20AC;&#x153;2015 looks pretty darn good,â&#x20AC;? reported Leppo. His biggest concern is that falling oil prices may halt oil and gas activity in the region. â&#x20AC;&#x153;All we have (continued on page 46)
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>> COVER STORY U.S. BUSINESS OUTLOOK REPORT (“Construction Recovery May Finally Gain Steam in 2015” continued from page 45)
seen is the upside. At some point we will probably see the downside.” As of the time of this writing on Dec. 15, crude oil prices dropped 42 percent since the beginning of 2013 to less than $60 per barrel, based on weakening global demand. Dealers impacted by the downturn in the coal industry have a considerably less positive outlook for 2015. “The federal government’s assault on our coal industry has destroyed 25 percent of our market opportunity,” said Wes Stowers, president and CEO of Stowers Machinery, the Caterpillar dealer for Eastern Tennessee. It’s a similar story for West Virginia Tractor Company, where declining coal markets have negatively impacted business. Challenges in 2015
Just over half of AED dealers surveyed identified the uncertainty of the federal highway program as a “very important” challenge. Stowers believes the lack of a long-term federal highway bill has the potential to eliminate all highway projects in Tennessee. “I don’t think there is any way we will be able to maintain our state program, much less match federal dollars,” he added. Economists agree that in the short term a lack of public funding will continue to hold back construction of schools as well as infrastructure. To what degree private enterprise will be able to help address public construction needs remains to be seen. According to Humphries, the Savannah Hilton Head International Airport and Gulfstream Aviation recently worked together to fund an additional turn lane to help employees and customers access their business. “What we are seeing is that businesses are picking up the slack,” she said. Availability continued to be a challenge for some dealers in 2014, as manufacturers shifted production to Tier-4 final machines. JCB of Georgia is
one of those firms, as is Leppo Rents. About 40 percent of respondents said availability was either somewhat or much better in 2014, while 20 percent said it was somewhat worse or much worse (6 percent). Just over 54 percent of dealers surveyed identified Tier 4 Final issues as a “very important” challenge.
Commercial Construction Upturn Paces Broader Nonresidential Building Recovery Billions of $ of Construction Spending
$300
Annual Percent Change
$299
$200
$100
9.9%
10%
9.2%
8.1%
4.4%
15%
2013 Spending level 2014 % change 2015 % change
11.2%
7.6%
$147 5.8%
$102
5% $49
$0
-$100
-0.1%
Total Nonres.
Industrial
Institutional
Source: AIA Consensus Construction Forecast Panel, July, 2014
More Rent-to-Rent in 2015
Rental strategies appear to be making a shift with 41 percent of dealers saying they will do more rent-to-rent in 2015. Stowers says their rental program is designed to be flexible to meet customer demand. “We are trying to do what our customers want to do,” he said. Leppo sees no advantage to rentalpurchase options. “You take all the risk. They can send the equipment back. You are stuck.” Humphries says financing can be a challenge for customers who have been out of business three or four years. A rental-purchase option can help contractors build equity. While acknowledging an increase in rent-to-rent activities for 2015, Doug Hansen, president of Connecticut John Deere dealer W.I. Clark Company, differentiates its business from pure rental companies. “We do rent-to-rent-to-sell. Our goal is to fully participate in the rent-to-rent market, but sell it to the first person who is willing to pay the money for it as the price is reduced by rental income.” Employment Challenges
Commercial
Finding skilled labor was an important challenge for 65 percent of AED dealers surveyed. More than 69 percent of dealers plan to add 1-5 percent more employees in 2015. Nearly 88 percent of dealers surveyed were trying to find additional mechanics. The most widely used approaches to recruitment includes local
0%
-5%
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advertising and attracting from competitors (73%) and support and recruit from technical colleges (71%). Regional advertising is employed by nearly 47 percent of dealers surveyed. Four in 10 dealers recruit from the military. Labor is also an issue for contractors. The industry lost more than 300,000 employees since the recession to other industries. In an Associated General Contractor Survey conducted earlier this year, 80 percent of respondents reported shortages of craft workers, while 60 percent reported a shortage of professional positions. “For some niches where you have specialized or complex projects, there is an absolute shortage of skilled labor,” said Simonson. “However, we will see workers come back to the industry if wages increase enough.” Telematics Taking Hold
About 29 percent of dealers reported that they offer products equipped with telematics and data management reporting services with a dedicated staff. Another 31 percent are just getting their feet wet and beginning to offer telematics services. Although JCB of Georgia is just starting in this area, Humphries already can see how it boosts service revenue. “We get an e-mail alert when services are due and it helps the service sales tremendously,” she said. Collecting on rentals is another plus, because customers can no longer falsely claim a rental machine wasn’t working. “You can check the hours of the machine
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daily and so that is no longer an issue,” Humphries added.
43 percent are optimistic about project backlog and planning to buy in 2015. Just 4 percent of dealers reported that customers were skeptical and not planning to do much business with them. According to Hansen in Connecticut, as contractor confidence goes, so goes the business. “If that improves, we’ll
What’s The Mood of Customers?
More than half of dealers surveyed (53%), including Stowers, describe their customers’ mood as cautious and leaning toward mostly rental for 2015. Another
improve; if that doesn’t improve, customers will be hesitant to buy.” With more market segments headed toward recovery in 2015, we’re optimistic the long and slow construction spending recovery might just quicken its pace. If that happens, contractors might just have the backlog of work they need to buy. n
JOANNE COSTIN (jcostin@costincustom.com) is a freelance writer and marketing consultant focusing on the construction industry. She can be reached at (847) 358-1413. 2015 Workforce Projections Expected 2015 total dealership revenues vs. 2014 24% - Same as 2014
4% - Lower than 2014
Add 1-5% more employees
69%
Add more than 5% employees
16%
Make no headcount changes
14%
Close 1-5% of positions
0%
Close more than 5% of positions
0%
71% - Higher than 2014
Top three construction sectors that fueled the majority of dealer revenues in 2014
51%
41% -Yes, we’ll do more RTP
4% -Yes, we’ll do less RTP
22% 55% - No Change 14% 10%
Mining–Traditional (coal, minerals)
Main dealer go-to-market rental strategy
New Equipment Sales
65%
6%
20%
8%
Used Equipment Sales
49%
12%
35%
4%
Rental
43%
31%
27%
0%
Parts Sales
61%
20%
14%
4%
Service Sales
60%
25%
15%
0%
Equal RPO and RTR
41%
More RTR vs. RPO
31%
Majority RTR
14%
Anticipated 2014 Year-End 45% Revenues vs. 2013 33%
2%
12% 8%
More than 10% Higher
1-10% Lower
14%
1-10% Higher
More The than 10% Same Higher
Most rental is RPO, little RTR
The Same
1-10% Higher
0%
1-10% Lower
Expected 2015 Revenues By Department
No rental at all
More than 10% Lower
Forestry
Water Infrastructure
Unconventional Energy/ Shale Oil & Gas
Commercial Building
33%
Housing
Surface Infrastructure (roads/bridges)
65% 51%
Will your rental strategy change in 2015?
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>> REGIONAL REPORTS
Regional Directors Sum Up Their Slice of North America All in all, these six industry leaders say dealers in their areas have something solid to drive equipment sales and rentals as the New Year begins.
U.S. MIDWEST REGION Detroit Resuscitated, and Michigan Road Funding Gets New Life AED Director Ryan Greenawalt Alta Equipment CO. Wixom, Mich.
W
e are extremely bullish on the conditions facing the Midwest in general, and the state of Michigan in particular, over the next couple of years. The state was hit very hard by the recession and the downturn in the automotive industry; as a result many construction projects were put on hold due to a lack of funding. With the improvement of the state’s economy and the resurgence of the automotive industry, there is pent-up demand for construction and the rebuilding of the state’s infrastructure. Our legislature is poised to pass a new wholesale gasoline tax, which, when fully implemented, will raise $1.2 to $1.4 billion annually for road funding. The other major factor driving my optimism is the progress being made in Detroit, Michigan’s largest city. As the city emerges from bankruptcy, the investment environment will become more stable and developers will increase their funding of projects in and around the city, trying to become a part of Detroit’s rebirth. Projects like the M-1 Rail Line, the Red Wings Arena District, and the international
bridge crossing are just the beginning for the city. The confidence from Detroit’s potential renaissance has already begun to spread, and we have seen an increased number of projects in cities throughout the state. Areas of Growth
New industrial, office and mixed-use space in the Detroit area (five major counties) Major Projects/industrial/ Infrastructure
There is currently 8.5 million square feet of proposed industrial space construction. Planned and proposed industrial developments include: n New Joe Louis Arena & Detroit Entertainment District – $650 million The 650,000 square-foot hockey arena to be completed by 2017/2018 in Detroit will seat 18,000 and have an attached 500-space parking garage, 10,000 square feet of retail space anchored by a Red Wings Merchandise store. n New International trade crossing – $1-$2.2 billion
On May 22, 2013 The Canadian Government, allocated $25M to begin land acquisition on the Detroit side of the river. n Planned I-75 work for 2015 – $850 million 8 Mile Road to M-59, SB I-75 loop will be gone and addition of fourth lane along entire stretch. n Detroit Wayne State University -$150 million 410,000 Square Feet residential and retail space at Cass and Canfield. Broder & Sachese Real Estate Services, Inc. n Detroit Riverfront – $55 million 400,000 square feet; 500 residential units with retail and restaurant space; McCormack Baron Salazar Development n A Windsor-Detroit bridge Authority (WDBA) was appointed in July. n Detroit – Redevelopment of Wayne County Jail site – $500 million 1.7M square feet, residential, hotel, retail- Rock Ventures, LLC These are just some of the exciting projects taking place in the Detroit area! n n
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U.S. ROCKY MOUNTAIN REGION Opportunity Lies in Oil/Gas, Telecommunications, Housing & Commercial AED Director Giles Poulson Faris Machinery Commerce City, Colo.
T
he results of my regional survey indicate that the tentative national economic recovery and reduced unemployment numbers are not convincing enough for dealers in the Mountain West to feel comfortable that we are even close to a sustained recovery in the equipment distribution business. A number of dealers were encouraged by the developing oil and gas sectors in Colorado, eastern Montana and northern New Mexico. However, recent crude oil price drops have cast doubt that these newer energy markets will be sustainable into the foreseeable future. Other dealers responded that housing, commercial development and, in some areas, telecommunication projects
were providing either growth opportunities or driving demand at a level that would continue to support moderate levels of business activity in the rental and sale of new equipment. Utah, Montana and segments of the Southern Mountain region were not as optimistic that the recovery was sustainable with a number of dealers reporting that their business growth has not turned positive. Other dealers, despite reporting growth potential and expanding balance sheets driven by customer rental demand, expressed apprehension that bank financing would be flexible enough to allow them to take advantage of these growth opportunities. Manufacturer
delivery was not cited as being any cause of concern, indicating that orders had not recovered nationwide to the point of straining capacity to meet incoming order demand. One regularly reported and continuing concern voiced by most dealers was the lack of well-trained and even apprentice-level service technicians. The low level of available trade school graduates willing to apprentice at dealerships is a continuing bottleneck to serving customer needs. As The AED Foundation continues their efforts to build and strengthen trade school interest in our industry, dealers must continue to support these efforts with financial or in-kind resources. n (continued on next page)
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>> REGIONAL REPORTS
(“Regional Directors Sum Up Their Slice of North America” continued from page 49)
U.S. WEST REGION “There’s frost on the graves and the monuments | But the taverns are warm in town People curse the government | And shovel hot food down” -Mark Knopfler: ‘What It Is’ AED Director Patrick McConnell Clyde-West Inc. Portland, Ore.
J
ust prior to Thanksgiving it’s cold; freezing temperatures in all 50 states. The elections are over; the electorate is still disenchanted. And very few look to be truly under fed. Times are good on the West Coast. Jobs are being added throughout the region, although the marquee unemployment rates are remaining stubbornly high due in large part to workforce re-entry (which is a good thing.) National comparative job growth rates over the past year
ranked Idaho 3rd, Washington 7th, Oregon 23rd, and California 27th. Construction employment continues to rise in every Left Coast state (except Alaska) with increasingly common anecdotal reports of skilled trades shortages particularly in the coastal metropolitan areas. Regional personal income is growing at roughly the same rate as inflation (just under 2 percent on average) but recent data points to relatively faster wage growth in the lower and middle income groups (generally another good
economic thing). The leading digits on gas station signs are beginning to show “2” instead of 3 or 4. Personal income growth, and the net perceived income growth of lower energy prices, are driving housing starts upward, although the rebound has a considerable distance to go before reaching pre-recession levels. Entering Year 6 of the recovery, most of the West Coast’s economic indicators are still positive. Sort of business as usual. That’s what it is. n
NORTHEAST REGION ‘Bonus’ Nail-Biter Created Legitimate Concern AED Director Chris Palmer Wood’s CRW Corp.
A
s 2014 was drawing to a close, many distributors in the Northeast have not seen the usual year-end tax purchases that we have become accustomed too over the years. As of this writing contractors and distributors alike are anxiously waiting to hear if the Senate will take up the bill just passed by the House that restores the Section 179 expensing limits and 50 percent bonus depreciation. Dealers have the inventory to meet any last-minute demand. (As CED
went to press, the president was signing the “extenders” bill.) The region’s unemployment rate continues to trend in the right direction, standing at 5.9 percent as compared to 7.3 percent in October of 2013. This is the lowest monthly BLS rate for the region since September of 2008. In general, contractors and distributors have had a busy construction season. Rental, parts and service revenues continue to trend positive as more machines are working than last
year at this time. Dealer concerns continue to be with the percentage of rental purchase option conversions at the end of the season. Unit retails in the common CE classes increased in the region as compared to YTD October 2013 by over 8 percent. Compact/Utility Equipment grew by more than 9 percent, while general purpose equipment advanced in the 6 percent range. There is growing hope that this growth accelerates or at least holds steady with 2013 numbers. n
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WESTERN CANADA Some Cheer, Some Fear as Oil Prices Drop AED Director Todd Hystad Vimar Equipment Ltd. Burnaby, British Columbia
W
hile commuters may appreciate the impact of slumping gas prices, the booming economies of Alberta and Saskatchewan will see a negative impact. The falling price of oil sparks fear that Canadian energy exports will fall. While the low price may not immediately effect development in the Oil Sands it will delay other more short-term projects in the oil and gas sector. The Canadian federal deficit for 2014 is projected to be lower than original expectations. The Harper government now projects the year’s deficit to be around $5.2 billion, $10 billion
lower than the original prediction of $16.6 billion. Latest projects place the government on track to see a surplus in 2015. Federal elections are scheduled to take place in October 2015. The approximately $8 billion Site C hydroelectric project located in British Columbia now has provincial and federal environment certificates in hand. With these in place the decision is now whether the project is economically feasible. The price tag of the project would make it the second largest public expenditure in the country right now. A shadow looms on LNG investments in the West – for example
there’s the recent announcement of Petronas postponing the investment decision for their proposed Pacific Northwest LNG project. The decision casts some doubt on the province of British Columbia’s hopes to develop this fledgling industry. In summary, the West has seen a steady summer and fall in 2014. The coming months should see strong and continued investment in infrastructure development and continued improvement as the U.S. continues to rebound. While falling oil may benefit consumers it will negatively affect oil and gas development as energy exports decline. n
EASTERN CANADA Fantastic Business To Be In – As Long as You’re Fast on Your Feet and Don’t Mind Surprises AED Director Rick Van Exan Toromont Industries Ltd. Concord, Ontario.
T
he markets never seem to pan out quite the way you expect. Manitoba, Ontario and Newfoundland were up about 10 percent this year, while Quebec and Atlantic Canada were down. Looking forward, a reasonably steady GDP projection of about 2.5 percent has been clouded by the recent route in commodity prices and downward pressure on the Canadian dollar. While infrastructure funding remains a priority of both our provincial and federal governments, their ability to balance their budgets is under increasing pressure and may impede some of their good intentions. With that said, the equipment business remains a fantastic industry to be engaged in. Fantastic, that is, as long as
you are ready for constant change and willing to adapt and respond quickly to the surprises it throws your way. We have just completed our five-year plan. The one thing I know for certain is that when the fifth year arrives it won’t look anything like we thought it would today. So why do we bother? Well, aside from the fact that our manufacturer expects us to, we need it to establish a direction and set of goals to drive our organization forward with a specific destination in mind. I expect all of you have a similar process – good luck with yours. I would be remiss not to thank the AED staff tor the Ottawa Briefing they planned and executed this past September. Building on the expertise developed in Washington over the years, the Ottawa event was relevant, timely
and extremely valuable to those who attended. Looking forward, we will build on this success to grow future events and provide a truly national voice to Canadian equipment distributors. I am pleased to have served as the Eastern Canadian representative on the AED board for the past four years. It has been an education for me and I have been pleased with how responsive AED has been in trying to both understand and represent its Canadian constituents. The recent addition of Mike Dexter as our AED regional manager in Eastern Canada will only strengthen this focus. I am pleased that Craig Drury will be assuming this directorship following the Summit in Orlando next month. Mark your calendar for Feb. 10-13, and I hope to see you all there. n
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>> IN CANADA
TOM VAN DUSEN JR.
Green is the Scene Wind energy sector stirring up new opportunities, but let’s not overlook Energy East pipeline project either.
F
or a few days last fall, sleek, efficient-looking mini replicas and artistic renditions of industrial wind turbines dominated Montreal’s downtown Palais des Congrés convention centre. The occasion was the 30th anniversary conference and exhibition put on by the Canadian Wind Association Conference (CanWEA). The turbines are the industry symbol of power produced – and power sought – among other energy providers. Rapidly emerging in Canada’s energy development game, many see wind energy as possessing tremendous future development potential.
The sector is supported by several Canadian provinces interested in backing up and/or replacing historic electricity-generating methods with more contemporary options. Even with energy demand dipping, wind power promoters remain optimistic that planned projects will go ahead and new ones will come on board. “Wind energy in Quebec is truly a success story and it’s especially fitting that we’re in Montreal,” CanWEA president Robert Hornung stated at the time. “Quebec has played a critical role in the history of Canada’s wind energy industry.” One of the industry’s top selling points is that it’s seen as “green,” and these days, green is the scene. Employment Powerhouse
Trans Canada spokesman Tim Duboyce shows a scale model of a piece of equipment known as a “Smart Pig” that patrols a crude oil pipeline collecting data leading to pre-emptive repairs where required.
In a report released in December, think tank Clean Energy Canada (CEC) made the startling claim that the green power sector has become such an important part of the economy that it now employs more people than the Alberta Oil Sands. About $25 billion has been invested in the sector in the past five years, increasing employment by 37 percent, CEC said. The 23,700 people working directly in green energy outnumber the 22,340
workers connected to the oil sands. “Clean energy has moved from being a small niche or boutique industry to really big business in Canada,” said CEC director Merran Smith, adding that the generating capacity of wind, solar, run-of-river hydro and biomass installations has expanded by 93 percent over the past five years.
Quebec has played a critical role in the history of Canada’s wind energy industry. However, despite its increasing importance to the national economy, building the sector hasn’t yet become a priority with the federal government, Smith observed. Smith emphasized that clean power generation isn’t a slave to commodity prices and the boom-and-bust cycle that regularly hits the oil and gas sector. In addition, she noted, the oil industry eats up a good deal of Canada’s diplomatic relations efforts, as in the never-ending lobbying for the Keystone XL pipeline. She contends that the federal level should create tax support for renewable technology investment, pump infrastructure cash into new transmission lines devoted to clean energy, and put a penalty on carbon. On Firmer Footing
Thanks to 2014 re-election in Ontario of a Liberal government, Hornung said the industry there is on firmer footing because of a strong commitment to wind energy development.
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The Ontario Power Authority is working on the release of a request for proposals for 300 MW of new wind energy early in 2015 year, to be followed by another RFP for the same amount in 2016. By the end of last July, 763 MW of projects were added to the national grid. Before 2014 rang out, he expected additional wind farms to be commissioned in Ontario, Quebec, Alberta and Nova Scotia. Since 2011, wind farm construction has averaged almost 1.3 GW a year. Staying Power
Slow growth in energy demand in most jurisdictions means there’s limited need for new generation of any type. However, over the past 30 years, the wind energy sector has confronted a broad range of challenges and has proven itself equal to the task. “Determination and creativity has enabled the industry to move from a nice idea in the minds of pioneers and dreamers to a mainstream power source that’s cleaning our environment, creating jobs and revitalizing local communities, said Hornung. All of that determination and revitalization hasn’t been without opposition. Across the land, rural residents have complained that industrial turbines cause noise, general health problems, and property value decline. In some cases, at least temporarily, they’ve persuaded municipal
governments to impose moratoriums on wind farm development. Late in 2014, the industry got a boost from the release of two studies. One, from federal ministry Health Canada, confirmed there’s no scientific basis behind medical complaints; the other, out of the University of Guelph, concluded through a survey of property sales surrounding one Ontario wind farm there was no appreciable decline in value. That survey has been expanded to another Ontario community and may soon be extended across the province. Gaining ‘Steam’
Hornung was particularly excited about a Hydro-Quebec request for proposals for 450 MW in new wind energy capacity soon to be finalized. Quebec’s wind industry has generated $10 billion worth of investment over the past decade. The industry contributes $500 million annually to the provincial GDP. Over the life of wind farms currently under contract, the province will reap more than $1.1 billion in tax revenue. As is the case in Ontario and other provinces, many of the Quebec jobs are in rural and remote areas such as the Gaspe Peninsula, where a turbine manufacturing cluster has been established to back wind power installations. The supply chain now includes 150 companies employing more than 1,000 people in the region.
Quebec was also the first to establish a long-term wind energy target, a goal that’s close to being met. And the province was home to Canada’s first really large wind farm, the 99 MW Le Nordais project completed in 1999 that quadrupled Canada’s wind energy capacity. Quebec will soon welcome the country’s newest, largest project, EDF EN Canada’s 350 MW Riviere-du-Moulin wind farm. One of the most unusual projects has merged history with the latest in wind power technology. A 1,600 square-km “seigneurie” dating back to the discovery of Canada is poised to become one of the country’s most significant wind power producers. The Seigneurie de Beaupre, a forested preserve acquired in 1662 by Francois de Laval, first bishop of New France, tentatively entered the wind energy industry almost a decade ago, said Jacques Roberge, general superior of the Seminaire de Quebec. Last year, it began generating 272 MW of wind power. By the end of 2014, another 68 MW will be added and, in 2015, 25 new MW will come on line. That’s a total of 365 MW. Considering the “interesting” revenues, Roberge said the Seminaire is “very happy” it decided to set aside an initial reluctance in favor of participating in the wind energy sector. The Seigneurie de Beaupre case was (continued on next page)
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>> IN CANADA
(“Green is the Scene” continued from page 53)
presented as a wind power success story during the CanWEA conference. Located northeast of Quebec City, the seigneurie is the largest private forest in Canada held by one owner. For more than three and a half centuries, the huge tract has continued to bring in revenues to support the Seminaire’s good works and services. Now, modern wind power profits have been added to traditional logging, fishing and hunting returns, Roberge explained. Wind project operators in Quebec are investing nearly $3 billion over 20 years in operations and maintenance; payments to municipal governments and landowners who host turbines add up to $25 million a year, not including returns to municipalities that have taken an ownership stake.
Equipment and Wind
Jean-Yves Grand, general manager of corporate sales for Hewitt Equipment Ltd. in Montreal, said the wind sector has been very good for some 15 contractors working from Quebec City through to the Gaspe over the past five years. Grand, an AED member, estimated they’ve reaped $200 million worth of site preparation work during that period, much of it covering purchases of excavators, telehandlers and other equipment. While he sees the boom years of turbine installation leveling off, opportunities will continue to come up in the sector, Grand forecasted. While promising, wind power is still a new kid in Canada’s massive energy expansion sector.
One dealer set up a display of a miniature wind turbine surrounded by mini equipment to promote its wares at the Montreal wind conference.
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>> IN CANADA In 2015, pipeline construction is expected to remain the dominant opportunity for equipment dealers and operators. The highest profile project is the proposed 36-inch diameter, 1,179-mile Keystone XL line that would deliver crude oil from Hardisty, Alberta, to Steele City, Neb. Energy East
Lesser known – at least in the U.S. – is another Trans Canada Corp. project called Energy East that would transport up to 1.1 million barrels of crude a day some 2,858 miles from Alberta and Saskatchewan to terminals in Quebec and New Brunswick. While it has the advantage of not crossing an international border, $12 billion Energy East – a combination of converted
natural gas pipeline and new pipe – is still meeting opposition at every turn, including cross-provincial barricades. With public briefings wrapped up late in 2014, Trans Canada is settling into the approval process before the National Energy Board of Canada (NEB), hoping for completion of the project toward the end of 2018. Trans Canada’s formal application to the NEB will be considered early in 2015. If approved, the oil delivery system is expected to support 1,400 full-time construction jobs across the country and generate $7 billion in tax revenues. The NEB application follows 18 months of environmental studies, engineering work and public consultation, one of the most extensive regulatory applications in Trans Canada’s history.
“To start, Energy East will deliver 700,000 barrels a day from west to east, eliminating the current need for imports in Eastern Canada from the U.S., Saudi Arabia and Nigeria,” said project spokesman Tim Duboyce during a recent open house. Duboyce said Trans Canada has no intention of capitalizing on the pipelines-versus-trains debate. Trains will remain an essential part of the oil transportation mix, he indicated. Trans Canada prides itself in being a willing, effective environmental steward, the spokesman insisted: “If we didn’t respect and protect the land we cross as much as the landowners who grant us easements, we would be putting our reputation and business at great risk.”n
TOM VAN DUSEN JR. has written for daily and weekly newspapers in Canada for more than 40 years. A freelancer based near Ottawa, Ont., his specialties include the general economy, politics, agriculture and the environment. He can be reached at 613-445-3407, tomvandusen@sympatico.ca.
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>> LEGISLATIVE OUTLOOK
CHRISTIAN A. KLEIN
Everything Old is New Again Looking ahead at AED’s priorities for the 114th Congress – several, ahem, 2,000-pound “elephants” in the corner, demand swift Congressional action.
W
ith the 2014 mid-term elections in the rear-view mirror, it is time to turn our focus to 2015 and the 114th Congress. Congress accomplished so little over the past two years that the important issues for the equipment industry remain the same for the year ahead. What’s not the same – with the new Republican majority in the Senate and expanded GOP control of the House – is the political landscape. The fact that Republicans now control both houses of Congress should help end the legislative log-jam on Capitol Hill. Party leaders are eager to make progress on key policy issues and demonstrate they are capable of governing. But there are also political wildcards: Will a Republican Congress and Democratic president work together? Will Senate Majority Leader Mitch McConnell (R-Ky.) and House Speaker John Boehner (R-Ohio) be able to bridge the divide between the conservative and moderate wings of their caucuses? How will the looming specter of presidential elections (and the related political ambitions of GOP senators) affect the process? Only time will tell, but whatever the answer, we won’t stop working to create a better policy climate for equipment distributors. Action on Keystone may come sooner rather than later. Now that the House and Senate are firmly in GOP hands, we’re expecting fast action on legislation to force the president’s hand on the Keystone XL pipeline. The project, which has been in limbo for years due the Obama administration’s intransigence, has significant economic and national security consequences.
Beyond reducing energy costs and lessening our dependence on natural resources from politically unstable or hostile countries, the project also will generate considerable economic activity and create jobs along its route and in the manufacturing sector. AED has made Keystone a priority because of the implications for equipment distributors and the broader construction industry in both the U.S. and Canada. The association is leading a coalition of business and labor interests determined to make the pipeline a reality. Legislation to approve Keystone has passed the House many times in recent years; the Senate has been the stumbling block. But even with Democrats still in control, a Keystone bill failed by just one vote in November. Federal highway funding must be a priority. Of all federal spending programs, none has a bigger impact on equipment distributors than the highway program. In 2014, it created an estimated $2.6 billion in equipment market activity for our industry. Past AED studies have shown that each $600,000 in dealer revenue supports roughly one dealership job, meaning that the federal highway program supports more than 4,300 jobs in our industry. Unfortunately, the Highway Trust Fund (HTF) is facing unprecedented funding challenges. The program is merely limping along after Congress averted near disaster this summer by extending funding to the end of May 2015. The funding extension is just a stopgap; without a long-term solution, the HTF is driving down the road on nothing but spare tires and an empty gas tank. In our industry, uncertainty causes
chaos. States are unable to plan beyond the first half of this year and contractors are left sitting on their hands. Whether the Republican Senate takeover is a good thing or bad thing for the road program remains to be seen. While there are certainly many Republicans who understand the broader economic impact of road and bridge investment, the party’s inherent aversion to tax increases will make it difficult to find the new user fees needed to put the HTF back on solid fiscal footing. Even more problematic, 55 House Republicans cosponsored legislation in the last Congress to get rid of the federal highway program, and 28 Republican senators voted for an amendment this summer to end the program. The economic consequences of doing so would be devastating, and some of the members of Congress supporting the legislation say they’re doing so just to send a message that the program has to be fixed. But there’s an old saying: “You can’t shake the devil’s hand and say you’re only kidding.” We’ve told them that rather than political grandstanding, we’re expecting them to step up and offer real solutions to an important policy challenge. If we’re going to achieve our goal of a well funded, multiyear highway bill, it’s important that AED members reinforce that message in their conversations with lawmakers back home. Tax reform remains a priority. The turnover in Congress means that new leadership will be in place come January. Rep. Paul Ryan (R-Wis.) and Sen. Orrin Hatch (R-Utah) are the incoming chairmen of the House Ways & Means and Senate Finance Committees, respectively. The committees will take
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a little time to get up to speed and begin acting on issues, but both the new leaders have extensive experience on tax and budget issues, which gives hope that the process could begin sooner than later. As CED went to press, lawmakers were on the verge of reinstating bonus depreciation and Sec. 179 for 2014. The fact that they waited until mid-December to retroactively fix the tax code for the year only underscores what a mess it is. AED will continue to make tax reform a priority in the coming year. Our broad goal is a tax code that encourages business investment and entrepreneurship. We’re concerned that some members of
Congress have suggested focusing only on corporate reform and getting rid of tax benefits for both corporations and pass-through entities to bring down corporate tax rates only. There’s talk of dramatically expanding equipment cost recovery periods, which would hurt cash flow for both distributors and their customers and make companies in the industries we serve less likely to invest in new machinery. Of additional concern is the threatened loss of the LIFO (“last in, first out”) accounting method and LikeKind Exchange (LKE). Both would be eliminated under the most recent House
and Senate proposals to great detriment to the industry. Roughly a third of equipment distributors use LIFO to manage the impact of inflation on inventory. Repeal would subject these businesses to considerable retroactive tax liability and eliminate an important tax and accounting tool. In fact, repeal could cost the industry more than $190 million in retroactive tax liability. Similarly, given more than $700 million in collective LKE deferrals among AED members, getting rid of LKE could cost the industry a quarter of a billion dollars in immediate tax liability upon repeal. (continued on next page)
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>> LEGISLATIVE OUTLOOK
(“Everything Old is New Again” continued from page 57)
Reining in regulatory overreach. The Obama administration’s regulatory overreach was a major motivator for Republican voters in November. In particular, the Environmental Protection Agency (EPA) has proposed several overly broad and burdensome rules that threaten many aspects of industry and the economy. One leading example is the proposed “waters of the United States” (WOTUS) rule, which would dramatically expand EPA’s jurisdiction, effectively making the agency the nation’s chief land manager. The proposed regulation would reclassify ditches and other landscape features that occasionally carry water as tributaries
to navigable waterways, allowing the EPA to regulate development, farming, mining and other activity in large swathes of the country. Another proposed rule threatens to significantly curtail greenhouse gas emissions. EPA wants to require states to reduce carbon dioxide emissions from fossil fuel power plants with the nationwide goal of a 30 percent reduction from 2005 numbers by 2030. The mandate will raise costs on consumers and businesses and shutdown the coal industry. With Republicans firmly in control of committee chairmanships on both sides of Capitol Hill, we’re expecting a litany of oversight hearings and legislation to subvert and defund regulatory mandates. Given all the likely activity
on this front, we want to make sure our priorities fit the needs of our members. If there are regulatory issues you’d like Congress to scrutinize, let us know. Education is the key to success. The new political landscape on Capitol Hill means risk and opportunity. The influx of new lawmakers means we have to redouble our efforts to educate Congress about our industry and legislative priorities. We’ve created many ways for you to get involved and help us move the ball forward. Visit AEDaction.org and weigh in with your representatives. Consider joining AED’s Advocacy Action Group and becoming an industry grassroots leader. And be sure to mark your calendar for AED’s Washington Fly-In on May 20 and 21. n
CHRISTIAN A. KLEIN (caklein@aednet.org) AED’s vice president of Government Affairs. He can be reached at 703-739-9513.
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>> CUSTOMER SERVICE
BOBBY WEBER
Ten Truths to Build Product Support Excellence Elevate your customers’ experience by evaluating internal culture and setting high standards. (Hear the author speak on sales management at Summit on Feb 11 in Orlando.)
Y
ou already know that your dealership’s delivery of product support is an important factor that has a direct impact on your bottom line profitability. But do you really know how important? Consider the following statistics – n Winning a new customer costs six to seven times more than keeping an existing customer. n You have a 70 percent probability of selling to an existing customer while your chances of selling to a new prospect could be as low as 5 percent. n Achieving a 2 percent increase in customer retention can have the same effect on your business as decreasing your costs by 10 percent. n It takes 12 positive experiences to make up for one unresolved negative experience.
n One unhappy customer may tell as many as 15 people about his or her negative experience, and 13 percent of dissatisfied customers could tell more than 20 people. It pays to make sure your product support team is equipped to keep customers happy and to keep them buying from you. Selling is a courtship, but product support is the marriage. And you’ve heard the adage that the sales department may sell the first machine, but your parts and service departments win the repeat business – but how can you make sure your product support team is doing everything possible to build healthy, sustainable customer relationships? Here are some steps to help these departments transform mundane customer interactions into meaningful experiences that form the foundation for lasting business relationships.
“Great customer service does not occur accidently, randomly, or in response to hope or good intentions. [It] is intentionally engineered to happen reliably, with excellence, every time on purpose.” Create a culture of excellence in customer care. The leader must accept responsibility for the degree of customer service excellence within his or her organization. Customer service excellence is not a self-proclaimed designation that you can just add to your website or the skills section of your LinkedIn Profile. The only real service excellence medals you get to credibly show off are the ones that come from real customers. Your customer’s opinion about your service quality is the only one that really matters. Unless a customer believes something amazing has happened, then it hasn’t. Intentionally engineer exceptional “moments of truth.” Every time a customer has an encounter with your organization, a “moment of truth” occurs. In that moment, it occurs to the customer that your employee “gets it.” From that moment on, that customer will ask for that employee by name every time he or she returns. All of these “moments of
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truth” eventually accumulate and powerfully influence customers’ perceptions about your company. As more customers develop this common awareness, your firm’s service reputation evolves, either positively or negatively. Organizations using a disciplined process to ensure reliable follow-up after the sale consistently out-perform competitors who are weak in post-sales follow up. Great customer service does not occur accidently, randomly, or in response to hope or good intentions. Great customer service is intentionally engineered to happen reliably, with excellence, every time on purpose. Consistency in this area helps you move away from having to compete for business on a price-alone commodity basis. And this may also culminate in customers engaging in word-of-mouth marketing on your behalf. Set the bar high on internal customer service. Here’s a little story: A man was trying to complete a task but his young son kept interrupting. Realizing the lad
was bored, the father tore a page from a magazine with a map of the world on it. He tore the page into smaller pieces to create a puzzle to occupy his son, so he could finish his own work. The boy quickly began taping the pieces together and in a matter of minutes he returned with the puzzle completed. Amazed, the father asked how he had finished so quickly. The boy replied, “Oh, that was easy, Daddy. On the other side of the world map there was a picture of a man, so I just put the man back together. Once I got the man right, then the world was right too.” Focus on the individuals inside the company first – get that right and you can make the rest of your world right. Internal customer service quality is nearly always rated lower than external customer service quality. Over-familiarity causes employees to take each other for granted and undervalue one another’s contributions. But when employees fail to support a co-worker downstream in the business process, they are actually, indirectly, failing the customer. When unresolved issues accumulate,
the resulting psychological debris makes it difficult for people to feel positively about working together. Help employees resolve distracting issues so they can get along together better, enjoy their work more, and help you ensure a better, more reliable customer experience. Your employees’ level of engagement will influence your customers’ engagement. Employee engagement is one of your most reliable organizational performance indicators, and it directly affects your service quality. Customers can instantly discern whether or not your parts counter personnel or your field technicians are authentically engaged and sincerely concerned about solving problems. Disengaged employees cost you customers. Studies indicate that organizations throughout the world have significant numbers of employees who are not highly engaged. A survey of 11 (continued on next page)
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>> CUSTOMER SERVICE
(“Ten Truths to Build Product Support Excellence” continued from page 61)
for much of this customer unhappiness is low employee engagement.
industrialized nations scored the U.S. with 27 percent employee engagement. That means 74 percent are disengaged. Highly disengaged employees are not only the least productive, but they can actually act intentionally to undermine and bring harm to your business. An employee’s engagement is expressed through his or her sincerity, commitment, and respect. This may be easier for customers to discern than for you as a business manager. It is hard for leaders to be aware that negative customer service is occurring because no one is going out of their way to tell them anything is wrong. Only one out of 20 unhappy customers is going tell you something is wrong, so you have to be determined to want to know. An unhappy customer will tell the world about a service failure, but leaders are the last to know. And the primary point of origin
Realize that your employee engagement may be lower than you think. Hope for the best but plan and prepare for the worst. Every great business leader must maintain at least a small measure of what I call productive paranoia. Ronald Reagan said it best: Trust but verify. You verify with surveys, and two types are effective for elevating customer experience. First, I recommend an employee engagement survey. Anonymous employee engagement surveys are effective in accurately measuring engagement levels. (1) Highly engaged employees act like owners and are relentlessly committed to the business; (2) Engaged employees are dedicated and loyal; they are just not quite a gung-ho as the highly engaged. (3) Disengaged employees view work as a mere paycheck, it’s just a job. (4) Highly disengaged employees will undermine
the efforts of engaged employees and seek to harm the business. An engagement survey will tell you with accuracy what percentage of your workforce falls into each category. The survey also spells out what you can do to significantly increase engagement levels. Align your standards with employee performance. Using a Customer Service Perspective survey allows your firm’s senior management to establish a formally approved standard for how service situations are to be handled. Each employee who interacts with customers is assessed against the company service standard. If needed, provide coaching to bring the whole customer service team into alignment with that standard to ensure a consistent customer service experience. Just ask your customers. You cannot manage anything
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>> CUSTOMER SERVICE
that you do not first accurately measure. Customer surveys are a great way to learn about your customers’ perceptions about your company, if you can get customers to respond. A better approach may be simply to empower everyone who interacts with customers to “ just ask.” Recently, a customer began having second thoughts about an additional purchase. So, the salesman reached out and said, “You are extremely important customers and we want to exceed your expectations in every way. If there is anything at all that you need us to change or fix, please let me know. The customer shared service concerns that caused his reluctance to move forward on the purchase. By asking, the salesman took immediate steps to remedy the customer’s concerns, and now the
account is secure and growing profitably. Slow the pace down enough to consistently achieve service excellence. Most parts counters and service departments maintain a fairly frantic pace. Excellence is the first thing to suffer in a constantly hurried environment. When everything is urgent, eventually nothing is urgent. And while there is plenty of wisdom to support running a lean organization, it is equally important that you are staffed up sufficiently to meet or exceed your customers’ basic service expectations. Empower people to solve problems. While the guy who approves the PO for a new machine most likely isn’t the
same guy who is dropping by the parts counter to pick up a parts order, the quality of your product support will always circulate back to the financial decision-makers. For example, your parts inventory restocking process should correlate with the machines sold in a given market and the high-wear parts associated with those machines. It is unreasonable to expect a dealership to have every part in stock; but it is also unreasonable, from the customer’s perspective, to have to wait and pay for freight on high-wear parts that should be in inventory. Equip your product support team with the tools and encouragement they need to show initiative and solve customer issues. Leaders: Teach employees how to go the extra mile to exceed customers’ expectations. n
BOBBY WEBER is president of Maximum Performance International, Frisco, Texas. Since 1998, he has worked with equipment dealerships to improve sales and service performance. He can be reached at 214-618-3059, bweber@team-mpi.com. Visit his website at www.team-mpi.com
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>> PLAY IT SAFE
ERIC STILES
T
he beginning of the year is an opportunity to reflect back on successes (and shortfalls) from the past year, which will help shape decision-making in the future. More important, the new year is a starting point to redefine your sales and service goals, discover how to strengthen customer relationships, and challenge all management and employees to give their best effort to generate another successful year. But this can also be a time for you to re-evaluate the ongoing risks that can impact your dealership, employees, and profits. Why not take a fresh look at what your company is doing to manage and predict potential risks? Let’s consider a few core risk management fundamentals that can help you re-launch your efforts in 2015.
Speak Loud and Clear on Safety This Year
e it a k a m and agement man rity that . prio yone sees ever
Ownership’s Commitment and Goals
Now is the time for ownership to re-commit to safety with a statement that is posted – or, better yet, distributed – to all dealership employees. There is no better way to capture everyone’s attention than a communication from top leadership outlining renewed safety expectations and annual goals, while expressing how important their individual safety and health is to the success of the business. This statement is a great first step, but there has to be substance to back it up. That includes having ownership get involved in the safety planning for the year. Top management should
At a minimum, your organization should require all drivers to sign an annual statement committing to safe and accident-free driving.
periodically take part in facility safety inspections and play a role with the dealership safety committee. When employees see this level of engagement in the safety process they are more likely to buy in to safety, as well. Review Policies, Procedures
Start planning a timeline to review important safety policies and procedures throughout the year. Prioritize and review the most important ones first. Consider whether your current processes have been effective, and if not, what procedures should be changed and communicated to
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Revisit and renew your manageme risk program, nt
employees. Some specific policies that should be reviewed include: New Employee Orientation – Are you connecting new employees to your safety process? Develop or review a new-hire checklist to make sure all safety policies and procedures are being covered. Be sure the employee signs an acknowledgement that (s)he has reviewed, understands, and will follow these guidelines. Accident Investigation – This is a process that many dealerships could improve. Review the existing accident reporting form for omissions or improvements. Does the form tell the (continued on page 66)
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HE SHO T O T T N E UIPM
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>> PLAY IT SAFE
(“Speak Loud and Clear on Safety This Year” continued from page 64)
accident story and allow for documentation of accountability and corrective actions that can be taken to prevent a future occurrence? Also, review accident reporting and follow-up responsibilities within the
dealership – need any changes? Re-state to all employees that all accidents and injuries must be reported to designated personnel immediately. Fleet Safety – It’s a sad fact, but the equipment distribution industry will continue to experience severe accidents and losses from vehicle operations. At a minimum, your organization should
require all drivers to sign an annual statement committing to safe and accident-free driving. You should also explore what improvements can be made to your driver-qualification process. Are you really checking to make sure that you’re hiring only the best drivers to represent your dealership? If not, you’re leaving the door open for an unprofessional driver to come knocking and the risk associated with hiring them. Last, you should have a safetytraining schedule planned throughout the year to reinforce your vehicle safety expectations. Include topics that will focus on reducing distracted driving occurrences and address electronic device usage while driving. Ultimately, these efforts can influence driving behavior and help avoid potential vehicle accidents. These topics are a small but vital part of any dealership’s operations. Don’t wait long to blast out that 2015 safety commitment statement from executive leadership and initiate the review process. You can’t afford to let time tick away, leaving your annual safety goals undefined. That’s an enormous risk, so let’s get going – and good luck! n Property and casualty coverages and safety services are underwritten, issued and/or administered by a member of the Sentry Insurance Group, Stevens Point, WI. 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. This document is made available by Sentry Insurance a Mutual Company and its subsidiaries and affiliates (collectively “SIAMCO”) with the understanding that SIAMCO is not engaged in the practice of law, nor is it rendering legal advice. The information contained in this document is of a general nature and is not intended to address the circumstances of any particular individual or entity. Legal obligations may vary by state and locality. No one should act on the information contained in this document without legal advice from competent and licensed local professionals. THE INFORMATION CONTAINED IN THIS DOCUMENT IS DISTRIBUTED BY SIAMCO “AS-IS”, WITHOUT ANY WARRANTIES. SIAMCO WILL HAVE NO LIABILITY TO ANY PERSON OR ENTITY WITH RESPECT TO ANY LOSSES OR DAMAGES CAUSED, OR ALLEGED TO HAVE BEEN CAUSED, DIRECTLY OR INDIRECTLY BY THIS DOCUMENT, REGARDLESS OF WHETHER SUCH CLAIM IS BASED ON CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE AND FOR PROPERTY DAMAGE AND DEATH) OR OTHER GROUNDS.
ERIC STILES is Sentry’s lead account executive responsible for maintaining the AED/ Sentry relationship. As the endorsed P&C carrier for AED, Sentry Insurance offers great coverage options and services to meet your dealership needs. Please visit us in CONDEX Booth 315 66 | www.cedmag.com | Construction Equipment Distribution | January 2015
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>> CFO 411
RON HODGEMAN
Latest Tax News – Some Good, Some Not So Good Eleventh-hour tax extenders last month was a missed opportunity, but 2015 could be the year for positive change.
R Section 179 of the Internal Revenue Code generally allows taxpayers to write off the entire cost of certain business assets in the year the asset is acquired.
ather than enacting meaningful tax legislation, Congress waited until the last minute to retroactively extend through the end of 2014 the 50-plus tax breaks known as the “tax extenders.”
Bonus Depreciation
For the seventh year in a row, equipment dealers can reduce their current tax liability (or increase their net operating loss) by taking advantage of bonus depreciation. Purchases of rental equipment in 2014 will generally qualify for this special depreciation allowance that is equal to 50 percent of the cost of the equipment. Keep in mind that only purchases of new equipment qualify for the accelerated tax deduction. Section 179 Expensing
Section 179 of the Internal Revenue Code generally allows taxpayers to write off the entire cost of certain business assets in the year the asset is acquired. Since this favorable provision is intended for small businesses, it is limited and eventually phased out when certain spending thresholds are reached. Thankfully, the Tax Increase Prevention Act extends through the end of 2014 the deduction limit of $500,000 and the $2 million spending threshold that were in place from 2010 to 2013. Without the extension, this special tax provision would have reverted in 2014 to a deduction limit of only $25,000, and the phase-out would have started once a business acquired $200,000 of qualifying assets during the year. Without the extension, a purchase of a single piece of equipment could easily exceed the deduction limit! Even with the expanded limits, many equipment dealers will not qualify for section 179 expensing. However, this provision is still very important to all equipment dealers because it provides an incentive to the dealers’ customers to buy equipment now. It’s important to note that it applies to purchases
of both used and new equipment. The good news is that almost everything that expired at the end of 2013 – including bonus depreciation and Section 179 expensing – was extended through 2014. The bad news is that nothing ever changes with Congress. It’s very disappointing that they waited until the very last minute to take action. Wouldn’t it have been great if your sales team could have told your customers all year about the great tax incentives available to them? Or if the CFO of your dealership factored in bonus depreciation when computing the dealership’s quarterly tax payments? Instead, by the time the tax act was signed into law, there were only a couple weeks left before bonus depreciation and Section 179 expensing expired again! I thought that the purpose of many of these extended tax provisions is to stimulate the economy, not to simply provide a windfall for actions already taken during the year. I actually think there was a better case for passing the tax extender legislation early in 2014 when there were many more concerns with the economy. Why did Congress wait so long? It’s not that the votes weren’t there. The oneyear retroactive extension passed the House by a vote of 378 to 46. It didn’t take the November elections and a shift in control of the Senate to push it through. (76 Senators voted in favor of it). Both the Republicans and the Democrats have been in agreement on the tax extenders since early in the year. Last year’s chairman of the Senate Finance Committee, Ron Wyden (D-Ore.), was strongly pushing a two-year extension of the expired tax provisions back in the spring of 2014. It’s really hard to justify or explain what happened. But AED has a strong presence in Washington with many allies and the grassroots member engagement to effect positive change. I’m hopeful that Congress will learn from its mistakes, and 2015 is the year we see it. n
RON HODGEMAN is a tax attorney and the leader of the Like-Kind Exchange (LKE) practice at WTP Exchange, AED’s Preferred Provider of LKE services. Ron has dedicated his entire career to helping companies minimize their tax liability by taking advantage of the LKE tax solution. He can be reached at ron.hodgeman@wtpexchange.com. January 2015 | Construction Equipment Distribution | www.cedmag.com | 69
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>> IN THE MARKET
ELI LUSTGARTEN
2015 Outlook Bright for Most Construction Markets U.S. housing and much of nonres will improve; overall, cautious optimism despite mining, ag and oil problems.
R Private nonresidential spending ought to be able to grow mid- to upper-single digits in 2015 and 2016... aided by new drivers including shale development and the Panama Canal expansion.
ecent economic trends were continuing as we approached the New Year. The U.S. economy continues to roll along with improving job and income trends and reduced inflation all pointing to stronger GDP growth in 2015, perhaps near 3 percent compared to about 2.4 percent in 2014. The global economic picture isnâ&#x20AC;&#x2122;t quite as bright with only modest growth likely in 2015. Economic growth in Europe, Japan and Brazil has slowed markedly in 2014 and the Chinese economy shows signs of deceleration as they shift from an export focus to an economy fueled by domestic spending. The U.S. economy will likely be stronger than many others throughout most of 2015. The good news is that inflation pressures remain subdued globally and monetary policymakers in Europe and Japan are likely to adopt some form of quantitative easing, which was employed by the U.S. Fed to stimulate economic growth. This suggests improving consumer and business demand over the next 12 months. The construction sector is likely to be one of the major drivers of growth in 2015. The outlook for housing and many parts of nonresidential construction continues to improve at moderate rates, suggesting that our recent forecasts for construction equipment of low double-digit growth in 2014 followed by mid- to high-single-digit growth in 2015 is achievable. Housing demand should continue to improve moderately as housing starts rise from just over 1 million in 2014 to around 1.25M in 2015 and perhaps approaching more normal levels of 1.5M in 2016. Housing prices continue to recover. CMD (formerly Reed Construction Data) points out that house prices are recovering fastest in many previously distressed areas and that house-prices-to-income ratios are currently close to historical averages in most large metropolitan areas. Nonresidential construction continues to trend positively. Private nonresidential spending was projected to rise about 12 to 15 percent in 2014 (according to AGC), driven by
strength in both commercial and industrial segments (lodging, office, manufacturing) and more than offsetting flat to down public spending. Private nonresidential spending ought to be able to grow mid- to upper-single digits in 2015 and 2016 (estimated at least 4 to 8 percent) aided by new drivers including shale development and the Panama Canal expansion. Headwinds include less government spending on schools and infrastructure, less retail as consumers switch from stores to online buying, and reduced office space per employee. There is upside to public spending in 2016 and beyond if the politicians can ever agree on a new infrastructure spending program; the U.S. highway program has more or less been running on continuing resolutions since September 2009. There are still problem areas in the construction industry. Mining equipment demand continues to be weak, though recent data shows that industry conditions are beginning to stabilize in the U.S. However, the mining sector is awaiting a Supreme Court ruling by June that would potentially restrict recent EPA regulations on emissions (mercury, carbon etc). If the Court does not constrain the EPA, another step down in coal production is likely â&#x20AC;&#x201C; as an estimate, 60 or more power plants could close in the U.S. Further, the price of oil has recently plummeted, with a new normal maybe being in the $70-plus per-barrel range. This should curtail oil and gas upstream spending, including dampening the recent shale boom. The potential offset is for increased downstream spending, as the U.S. is woefully underinvested in pipelines, LNG export terminals, etc., to move its increased oil and gas production to market. The outlook for most construction markets remains bright for the next several years, which should drive increased demand for equipment. We believe our projected mid- to upper-single digit growth forecast for 2015 for construction equipment is sustainable for at least the next several years. n
ELI LUSTGARTEN (elustgarten@aol.com) is president of ESL Consultants, an industrial consulting firm. January 2015 | Construction Equipment Distribution | www.cedmag.com | 71
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>> PROBLEM SOLVED
TROY OTTMER
Giving a Customer Bad News Doesn’t Have To Be a Bad Experience Hint: It’s all about the way you prepare and organize the facts.
D
Always start with the initial problem when you’re speaking with the customer, and then advise them that you have found some additional items of concern.
on’t you dread telling a customer bad news? For most employees, this is a very frustrating part of their job. What is “bad news” to a customer? Hard to say exactly, but for sake of argument, let’s say the bad news topic has to do with “Spending Money” or “Downtime.” We can all agree these are hot buttons for sure, and downtime is the one that really costs a customer the most money. How should someone deliver bad news to the customer? Should it be in person, by a simple e-mail, or a phone call? In my opinion, doing this in person is always the best way; however, sometimes this is not always possible or even practical. So that leaves the phone or e-mail. As for e-mail, well, this is always a dicey topic due to how tone can be perceived by the recipient. Let’s start out with having a good old-fashioned conversation with the customer. First, make sure to gather all the facts related to the bad news, and then categorize the severity of the issues. From there you can lay out a plan to address the topics or issues based on their respective severity. For example, if a customer brings in a machine for a hydraulic oil leak and you perform your 101 Inspection, which will include digital pictures of the current problem(s) for which the machine was brought into your shop, as well as any additional issues that your technician has noted during his inspection. Additionally, if your shop practices pulling oil samples of all compartments, then this, too, will be part of the inspection process. Now that you have all this information, you will want to make an estimate for the original problem. This will be how you lead into explaining to the customer what the cost will be to make the repair on the hydraulic leak. Please keep in mind that sometimes doing the estimate will be problematic, because
your technician has to disassemble a portion of the machine to determine the extent of the problem. If that’s the case, then you can use a variety of methods to provide the customer with some general costing; just be careful not to over commit or get locked into some minimum-level estimate. Assuming you have enough basic information, now take the information from the 101 Inspection report and list out a brief summary of the problems by type, for example maintenance, safety, leaks, etc. Once these are categorized, now you can estimate what each will cost to repair. I would also include a copy of the 101 Inspection and digital photos with each estimate. These two things combined with the estimate will make delivering the bad news so much easier, not to mention give you some consistent talking points with the customer. Always start with the initial problem when you’re speaking with the customer, and then advise them that you have found some additional items of concern. I would always start with safety-related items when doing this, then progress to less severe issues. For example, once you move from speaking about the hydraulic repair, then you move to telling the customer that the brakes do not function on the machine, and then to the back-up alarm that doesn’t work, and then the oil sample that shows the machine needs a service, and so on. Now that we have structured this for a verbal conversation, you may have noticed from the way I’ve had you put this together, you could e-mail this information in the same format; or just pick up the phone and call the customer. The point is this: Delivering bad news to a customer doesn’t have to be a bad experience. If done with confidence and professionalism, this can be a very profitable experience. n
TROY OTTMER is vice presidentof Fixed Operations at Doggett Heavy Machinery Services, LLC, in Houston, Texas, a John Deere construction equipment dealership serving the greater Houston metro area including Beaumont and surrounding market. Doggett Machinery Group also serves South Texas and Louisiana. Ottmer has worked in the equipment and automotive industry for 24 years. He can be reached at troy.ottmer@doggettmachinery.com January 2015 | Construction Equipment Distribution | www.cedmag.com | 73
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>> GOOD COMPANY
JOANNE COSTIN
Terramac Takes Crawler Carrier Market by Storm Heavy-duty carrier with factory-customization finds a home in the oil and gas market, and in dealers’ rental fleets.
A
new crawler carrier is making inroads in the oil and gas market, and it might surprise you to learn that its creator is a dealer. The last two years have brought a lot of exciting changes to Terramac and its parent company, Rig Source Inc. – since January 2013, Rig Source has transformed from dealer to both dealer and manufacturer as it entered the crawler carrier market with the launch of the Terramac RT9 crawler carrier. Now the shoe is on the other foot as they look to expand their dealership network and grow sales across the U.S. and Canada. “We’ve learned a lot,” said Matt Slater, director of sales for Terramac. “But we think our dealership background gives us an Matt Slater upper hand. We’ve built the company around the service and support we can offer.” Being a newcomer to the manufacturing market hasn’t hindered Terramac, which has already surpassed 100 units sold. They are no stranger to the crawler carrier market. Before they manufactured the RT9, they sold, serviced and rented competitive models through the Rig Source dealership. Big Carrying Capacity
The RT9 is a little more heavy duty than competitive models and with
more capacity. The RT9 rubber track carrier model has an 18,000-pound carrying capacity and is equipped with a 230 hp Cummins diesel engine. According to Slater, that’s the largest carrying capacity of any crawler carrier for a unit that size. Both open and closed cab options are available. Safety features on the unit include rollover protective structures (ROPS) and falling object protective structures (FOPS) components. The RT9, comprised of U.S.-made parts and components and assembled in North America, offers substantially more customization than competitive models, the company says. Cranes, personnel carriers, drills, lifts, water tanks and other attachments are all easily bolted to the front or rear of the unit right at the factory. Endusers avoid the inconvenience of having the work done through a third party or mounting the attachments themselves. “We have the ability to order the whole unit as one,” said Slater. You
will find RT9 units doing everything from suppressing tailings dust on mines to holding welding equipment for oil and gas pipelines – even laying dirt in environmentally sensitive areas for general construction.
“The next five to 10 years look to be an enormous boom in that sector.” Ideal in Wet Conditions
According to Slater, the oil and gas industry is the largest market for crawler carriers, and that market prefers to rent. “The next five to 10 years look to be an enormous boom in that sector,” he said.” Dump beds or flat beds are the most common configuration, used for hauling material and working up and down the right-of-way. With rubber tracks, the carrier’s ground pressure when fully loaded is only 5.1 psi, making it ideal for working in wet conditions, hilly, soft or uneven terrain. “Before [the RT9], they couldn’t work or THE RT9 SPECS struggled with getting vehicles stuck or tearing Machine Weight (no bed) 21,500 pounds up the ground with steel Machine Weight (with bed) 26,000 pounds Engine Cummins QSB 6.7 tracks,” said Slater. And new Terramac Horsepower 230HP models with different Transmission HST sizes and capacities are Travel Speed first gear 2.5 mph already in the works. Travel Speed second gear 6.0 mph Groff Tractor, the Ground Pressure (full capacity) 5.1 PSI Case dealer based in Ground Pressure (unloaded) 3.0 PSI Mechanicsburg, Pa.,
76 | www.cedmag.com | Construction Equipment Distribution | January 2015
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With a wide range of configurations and attachments, the Terramac RT9 Crawler Carrier is a highly versatile machine. Its low ground pressure makes it ideal for operating in wet conditions.
signed on with Terramac after noticing Hood believes that by educating whatever attachment is needed. “They many of the crawler units on the oil customers on an alternative way to deal are like Swiss army knives,” said Hood. and gas jobsites in Pennsylvania and “Customer feedback has been incredible.” with wet job conditions their use will Southeast Ohio. Since expand. At Groff, machines are September they have typically rented on a long-term CUSTOMIZABLE SOLUTIONS FROM TERRAMAC basis, coinciding with the job. sold two units and have been extremely pleased “Your customers may not need The RT9 accommodates a wide variety of support with the rental business to own one, but opportunities equipment, making it an extremely versatile machine. generated from their arise where they can bid on new 10-machine fleet. work or complete jobs in shorter Drill Rig Unit • Personnel Carrier Unit • Bark Blower “The crawler carriers time because they have access to Unit • Vacuum Excavator Unit • Tac Welding Unit are huge in the energy these units,” Slater added. • Dust Suppression Unit • Hydroseeder Unit • Fuel sector because of the With an eye toward placing Tank Unit • Pipe Heating Unit • Compressor Unit conditions,” explained the carriers in dealer rental • Crane Unit • Water Tank and Crane Unit • Boom Jeff Hood, regional sales fleets, Terramac has focused on Lift Unit • Digger Derrick Unit director at Groff. He has making the product durable, found that the versatileasy to work on, and cost-effiity and demand for the machine has cient for a rental fleet. Crucial service opened the doors for the other product Endless Possibilities areas on the RT9 are easily accessible lines they represent. “It is a rental piece Carriers are a growing product catefor a technician under the tilt-up hood. gory, albeit relatively new to the North As a dealer themselves, Terramac with a great return on investment.” American market – they were first The retail price for the base unit is also understands the importance introduced about 15 years ago. “New $200,500. of parts availability. One hundred applications pop up on a weekly basis,” percent of the parts for the machine Groff is able to change out the bed in less than an hour and equip the unit with said Slater. are stocked in both Canada and at (continued on page 79)
January 2015 | Construction Equipment Distribution | www.cedmag.com | 77
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Building the future
together
INTERMAT c/o IMEX Management, Inc. Tel: 704.365.0041 - Fax: 704.365.8426 Email: rebeccaj@imexmanagement.com
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e x p e r t i s e - i n n o vat i o n - n e t w o r k i n g
10/9/2014 9:03:59 AM
>> GOOD COMPANY
(â&#x20AC;&#x153;Terramac Takes Crawler Carrier Market by Stormâ&#x20AC;? continued from page 77)
the Chicago suburban headquarters in Elburn, Ill. Parts can be shipped anywhere in the U.S. for next-day delivery, a key advantage over their overseas competition. â&#x20AC;&#x153;Terramac has been a great partner for us,â&#x20AC;? said Hood. â&#x20AC;&#x153;They are very responsive, and we have had very limited issues. Itâ&#x20AC;&#x2122;s been a great product.â&#x20AC;?
Dealer Expansion
In addition to Rig Source, Terramac has seven dealers in the U.S. and Canada including Groff Tractor, Vermeer Texas-Louisiana, Lyle Machinery, McClung-Logan Equipment Company, McClung-Logan Crane and Equipment, Shafer Equipment and SMS Equipment. They are currently looking for dealers in the West, Northeast and Southeast, as
well as in Southern Ontario. As a small, privately held company with just 25 employees, Terramac prides itself on its willingness to adapt to customer needs. With flexibility built into both the product and company, dealers should take a closer look at Terramac. For more information, call or e-mail Matt Slater at (630)365-4800, matt@terramac.com. Â&#x201E;
JOANNE COSTIN (jcostin@costincustom.com) is a freelance writer and marketing consultant focusing on the construction industry. She can be reached at (847) 340-4075..
advertiserâ&#x20AC;&#x2122;s index Ajax Tool Works . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
HydrauliCircuit Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
AMTrust North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72
Hydrema Exports A/S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Arctic Snow & Ice Control, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . .37
Hyundai Const. Equip. USA Inc. . . . . . . . . . . . . . . . . . . . . . . . . 26
Beka-Max of America Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
IHI/Compact Excavator Sales LLC . . . . . . . . . . . . . . . . . . . . . . 62
Bell Trucks of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
IMEX Management, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78
BidSpotter.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Knapheide Manufacturing Company, The . . . . . . . . . . . . . . . . 65
Breaker Technology, Inc. (BTI). . . . . . . . . . . . . . . . . . . . . . . . . . 58 CDK Global Heavy Equipment . . . . . . . . . . . . . . . . . . Cover Wrap Construction Equipment Guide . . . . . . . . . . . . . . . . . . . . . . . . 68 DIS Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Doosan Infracore America . . . . . . . . . . . . . . . . . . . . . . . . . .40-41 eBS Mechdata, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 e-Emphasys Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . 74-75 EPG Insurance, Inc. . . . . . . . . . . . . . . . . . . . . . Inside Front Cover
Kobelco Construction Machinery . . . . . . . . . . . . . . . . . . . . . . . 67 LayMor Sweepers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Leading Edge Attachments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 LiuGong Construction Machinery . . . . . . . . . . . . . . . . . . . . . . . . .8 Lowe Manufacturing Company, Inc. . . . . . . . . . . . . . . . . . . . . . 33 Okada America, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Ritchie Bros. Auctioneers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Fairview Insurance Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Screen Machine Industries, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 29
FRD Furukawa Rock Drill, USA . . . . . . . . . . . . . . . . . . . . . . . . . 54
Sentry Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
GE Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
Sullivan-Palatek . . . . . . . . . . . . . . . . . . . . . . . . .Inside Back Cover
Glynn General Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Towmaster Trailers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Gorman-Rupp Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Wells Fargo Equipment Finance . . . . . . . . . . . . . . . . . . . . . . . . . .5
HKX, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
XAPT Corporation . . . . . . . . . . . . . . . . . . . . . . Outside Back Cover
$V WKH RIĂ&#x20AC;FLDO PDJD]LQH RI $VVRFLDWHG (TXLSPHQW 'LVWULEXWRUV WKLV SXEOLFDWLRQ FDUULHV DXWKRULWDWLYH QRWLFHV DQG DUWLFOHV LQ UHJDUG WR WKH DFWLYLWLHV RI WKH DVVRFLDWLRQ ,Q DOO other respects, the association cannot be responsible for the contents thereof or the opinions of contributors. Copyright Š 2013 by Associated Equipment Distributors. &RQVWUXFWLRQ (TXLSPHQW 'LVWULEXWLRQ ,661 LV SXEOLVKHG PRQWKO\ DV WKH RIĂ&#x20AC;FLDO MRXUQDO RI $VVRFLDWHG (TXLSPHQW 'LVWULEXWRUV 6XEVFULSWLRQ UDWH Âł SHU \HDU IRU PHPEHUV SHU \HDU IRU QRQPHPEHUV 2IĂ&#x20AC;FH RI SXEOLFDWLRQ : QG 6W 6XLWH 2DN %URRN ,OO 3KRQH 3HULRGLFDOV SRVWDJH DW +LQVGDOH ,OO DQG RWKHU SRVW RIĂ&#x20AC;FHV $GGLWLRQDO HQWU\ 3RQWLDF ,OO 32670$67(5 6HQG DGGUHVV FKDQJHV WR &RQVWUXFWLRQ (TXLSPHQW 'LVWULEXWLRQ : QG 6W 6XLWH Oak Brook, Ill. 60523
January 2015 | Construction Equipment Distribution | www.cedmag.com | 79
>> EASY WINS
STEVE CALECHMAN
Getting the Most Out of a Trade Show When your company participates as an exhibitor, get your time and money’s worth out of it.
T
Having meetings in your book before you walk in will create momentum and excitement.
rade shows can be an opportunity to score new business and bring needed attention to a growing company. They can also be swag-filled, sensory-depleting wastes of time. Gwen Tomasulo is managing director of audience development at the Chronicle of Higher Education. Greg Topalian is president of LeftField Media and former senior vice president at Reed Exhibitions. Both have attended and organized numerous shows and both offer advice on how to get the most out of attendance. Formulate the game plan. Be clear about why you’re there – cultivating new contacts, cementing existing ones, rolling out a new service – and set measurable goals 60-90 days beforehand. The early focus allows you to prepare yourself and train your people, particularly the ones in the booth, about what success is in order to direct their energies and not become entangled in the wrong conversations. “If you don’t decide, you end up as a team waiting for something magical to happen. That’s not a good marketing strategy,” Topalian says.
Get the attendees list. Reach out to your target audience with an invitation to whatever
you have to offer – party, press conference, raffle or a place to rest. More than that, set up appointments with both attendees and any potential customers who are in the host city. Use Facebook and LinkedIn to announce your arrival and expand your network. Prioritizing people to see and booths to visit will better guarantee that they’ll happen, and having meetings in your book before you walk in will create momentum and excitement. “You know it’ll be a great day,” Topalian says. Avoid the fish bowl. It’s an easy and well-worn booth enticement, but the business card drop is lazy and unproductive. You’re left with a random pile to sort through and figure out which ones are meaningful. Instead, have a scanner that swipes attendees’ badges and logs all relevant contact information. You no longer have to waste time writing and can now have the quality conversations that are your goal, says Tomasulo, adding that the scanner also is a time-saver for raffles. Keep the entrance open. A shiny bulldozer is an attention-getter, but if displaying heavy equipment isn’t practical, you want to have your area be inviting and easy to access, Tomasulo says. High-top tables with tall chairs can establish a casual feel. Topalian adds that having a walk-through experience and using video are engaging without making people feel trapped. While uniforms aren’t needed, you want staff to be immediately recognizable. The ultimate balance is to be serious while remaining low-pressure in your approach. “You’re not asking someone to marry you. You’re just trying to get a date,” Tomasulo says. Finish strong. It’s not uncommon to plan your escape during the final day when things start quieting down. Resist that urge. Customers have gotten through the initial hype of the show, been able to take in all the relevant information, and are ready to talk specifics. “The day can be significantly slower, but it can be the most serious people,” Topalian says. “It’s a buying day. Don’t take your foot off the gas.” n
STEVE CALECHMAN is a freelance journalist in the Boston area. He’s a contributing editor for Men’s Health and his work has appeared in The Boston Globe Magazine, The Old Farmer’s Almanac and Delta’s Sky magazine. January 2015 | Construction Equipment Distribution | www.cedmag.com | 7
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MANAGEMENT Gain increased visibility across equipment, parts, service, and financials to improve
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expenditures and enforce policies and
visibility throughout the supply chain
recruitment, and training to facilitate quick and certification needs
responsive and pro-active decision making
Find out why other dealers have turned to XAPT for their dealership needs Visit us online at www.xapt.com FOR MORE INFORMATION: (p) +1 866-727-XAPT (9278) | (e) Contactus@xapt.com | (w) www.xapt.com
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