March 2015
CED Construction Equipment Distribution Published by AED: Business Fuel for a More Profitable Dealership
Attitude Is Everything Celebrating one year on the job, Liebherr North America President Peter Mayr points to the top priority the company looks for in dealers.
n Who’s Putting the Squeeze on Service Trucks?
Rethink order time 1_March_Cover_KP.indd 1
n Your Successor
Match core values to dealership’s culture
n Wall of Protection
In the trenches with AED member ECA
3/9/15 11:36 AM
Experience the Progress.
Special-purpose machines for the quarrying industry Liebherr offers custom-made machines and technologies for the quarrying industry. A diverse range of crawler excavators, wheel loaders and dozers offer all the equipment requirements you need
Liebherr Construction Equipment Co. 4100 Chestnut Avenue Newport News, VA 23607 Phone: +1 757 245 5251 E-mail: info.lce@liebherr.com www.facebook.com/LiebherrConstruction www.liebherr.us
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for the quarrying industry. Even under the toughest operating conditions, the powerful and economical machines of Liebherr are built to last.
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contents CED Magazine | March 2015
www.cedmag.com
vol. 81, No. 3
>> FEATURES
30
Attitude is Everything With Liebherr
Cover Story:
Our exclusive interview with Peter Mayr, who assumed the role of president one year ago for the manufacturer’s North American operations
34 Why ‘Work Smart, Not Hard’ is the Worst Advice in the World
Mike Rowe asks: Why aren’t we encouraging the benefits of working hard AND smart. (PS: Send this to every high school counselor in your community!)
36 The Three Attributes of
Your Successful Successor
>> DEPARTMENTS
12 » AED hp 16 » Industry Beat 22 » Data Trends 24 » Ready to Order 55 » Ad Index
Your company is your legacy – preserve the culture you so carefully crafted by understanding the next leader’s core values.
40 Pile Drivers
Shore Up New Jersey’s Super storm Defense
AED member ECA supports a local customer on the front line of constructing a new three-and-a-half-mile wall.
March 2015 | Construction Equipment Distribution | www.cedmag.com | 3
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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 GARRY BARTECKI Financial Consultant Dealer-Rental Succes LLC STEVE CALECHMAN Journalist 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
contents CED Magazine | March 2015
>> COLUMNS
07 » From the Chairman
600 22nd Street, Suite 220 Oak Brook, IL 60523 630-574-0650 fax 630-574-0132
Let’s invite our manufacturers back to Summit.
09 » Editor’s Note Equipment disposition any way you want it
23 » Money$$$Man Is rental your friend or foe? Only you can decide. 47 » CFO 41
What to watch if you don’t like overpaying on taxes
Why we’ll see reduced energy-related capital spending
Look at the talent – not just the major – in your new recruits.
Government won’t solve workforce problem without us.
49 » In the Market
51 » Problem Solved
53 » Washington Insider
56 » Easy Wins How to make social media work for your company. >> PLUS
14 » Summit Recap
26 » Battle for
Since 1920 Official Publication of
www.aednet.org
vol. 81, No. 3
the Truck
44 » More
‘Plumbing’ On Demand
4 | www.cedmag.com | Construction Equipment Distribution | March 2015
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>> FROM THE CHAIRMAN
DON SHILLING
Getting Everyone Back to Summit is Easy We’ve got a whole year to demonstrate to dealers, manufacturers and sustaining members why they all belong with us next January in D.C.!
W
e all just returned from the AED Summit just a few days ago and it was an honor for me to be installed as AED Chairman. Our family really enjoyed the experience and we are all very proud of leading this wonderful association. My first AED was 1981 in Las Vegas. At that first meeting I attended with my boss George. Now George was a veteran of the AED conventions, so he had his schedule, things he wanted to do and he blocked about 50 percent of his time to be with me. Needless to say, I was a little lost. It took me some time to get my bearings, but I soon learned the ropes, networked with some other dealers, made friends, and by the end of the experience I was hooked on AED. Our Summit attendance numbers this year were up substantially from 2014 – a good sign that the economy continues to improve and that dealers are finding value in AED Summit. Being a nonCONEXPO year, the timing was right to come and enjoy Orlando. If you ran some video footage of that 1981 convention alongside the 2015 Summit in Orlando, they would be quite different! Today, our AED Summit
(besides having the name Summit instead of convention or annual meeting) is shorter, more to the point. We stuff education, networking and the general sessions into a compact little package. We added an AED Foundation Golfing Event and Auction – the Foundation did not even exist in 1981 at my first event. Keeps Getting Better
The lobby bar at the Marriott World Center was quite full each night. It was like the old Chicago Hyatt Regency networking opportunity. Besides damaging our brain cells, a lot of discussions centered on industry issues and meeting new people. Today at AED Summit, it is easy to come in on Day 1, catch most of the Summit action, meet with manufactures and catch that early afternoon flight home on the third day in time for the kids’ basketball game or that birthday or anniversary dinner. In 1981, the flight choices generally meant coming earlier or staying longer. What is missing from AED Summit today is several of the major manufactures. In my younger days, all the
BRIAN MCGUIRE | AED President & CEO
>> OFFICERS
BOB HENDERSON | AED Executive Vice President & COO
>> AT-LARGE DIRECTORS
DON SHILLING Chairman General Equipment & Supplies, Inc.
TODD BACHMAN Florida Coast Equipment, Inc.
WHIT PERRYMAN Vice Chairman Vermeer Texas-Louisiana
JAMES P. COWIN Cowin Equipment Co., Inc.
WES STOWERS Sr. Vice President Stowers Machinery Corp. DIANE BENCK Vice President West Side Tractor Sales Co.
>> REGIONAL DIRECTORS RON BARLET West Reg. Bejac Corp. CRAIG DRURY Eastern Canada Reg. Vermeer Canada Inc.
LARRY R. MILLER Kelbe Bros. Equipment Co. Inc.
TODD HYSTAD Vice President Vimar Equipment Ltd.
MITCH NEVINS Bell Trucks America
DENNIS J. HELLER VP of Finance Stephenson Equipment, Inc. TIM WATTERS Immediate Past Chairman Hoffman Equipment Co.
KENNETH E. TAYLOR Ohio CAT
A. ROY KERN, JR. Foundation President Equipment Corporation of America
manufactures were there, with endless parades of private meetings and holding court in suites filled with activity. They were there also to hold an awards breakfast or dinner banquet. We felt special as dealers to attend those dinners and be recognized. Today, some of the major manufactures hold separate events from AED Summit, which requires yet more dealer travel and losing some of the networking. How do we get the manufacturers to bring that back? Back to make AED Summit as their venue for showing off their accomplishments and their top dealers? Easy answer: We ask them back! We explain the benefit of getting us all together at once. To show off their dealer network and to interview potential new dealers who might be making a splash in their open territory. Seems like a better ROI would be to bring everyone back to AED once a year where they belong. Hopefully – in one year’s time – we can do our homework and convince all AED dealers, manufactures and associate members that on January 19-22, 2016, we, as an industry, should all be at the Gaylord in Washington, D.C. n
COREY VANDER MOLEN Vermeer MidSouth, Inc.
RYAN GREENAWALT Midwest Reg. Alta Equipment Co. TODD HYSTAD Western Canada Reg. Vimar Equipment Ltd. CHRISTOPHER PALMER Northeast Reg. Wood’s CRW Corp. GILES POULSON Rocky Mountain Reg. Faris Machinery Co. JOHN RIGGS, IV South Central Reg. J A Riggs Tractor Co. JAY RODES Southeast Reg. Wilson Equipment Co., LLC
March 2015 | Construction Equipment Distribution | www.cedmag.com | 7
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11/21/1411:00 2:43AM PM 11/26/13 9:27 10/29/12 1:39 PM 2/1/12
>> EDITOR’S NOTE
KIM PHELAN
Any Way You Want It Lessons in customer service and strategic focus from Ritchie’s Bros.’ new online, asset disposition rollout.
R Understand what your customers are doing in a way you haven’t before…
ecently, I met one of those guys who, when he talks, you listen up, because you know there’s going to be something useful for you even when he’s talking about his own stuff! So, meet Jim Barr, the new group president at Ritchie Bros., with responsibility for Emerging Business, Brand Innovation and Technology Services. Jim was formerly part of CEO Ravi Saligram’s exec team at OfficeMax, where he served as chief digital officer and then chief information officer, as well; he was also CIO for Sears online, and before that he ran e-commerce at Microsoft. He’s got another big tech job cut out for him at Ritchie. Two years ago, Ritchie bought Equipment One (E1) but didn’t fully integrate the new division, which in its most simplistic definition is a Craigslist fraternal twin for the equipment industry. Just think about that for a moment – Jim did. He compares E1 to a virtual store with strong but poorly stocked shelves in need of inventory. Although Ritchie Bros. is no stranger to the online auction market, tackling the new animal of buyer-meet-seller in a direct virtual environment has big challenges. Namely, it’s wildly different from their core expertise. But Jim sees an opportunity for Ritchie to be so much more to its customers than they have ever dreamed of in the past. “We have a chance to be a leader in a much broader sense,” he said. “Rather than thinking of ourselves as the leader in unreserved physical auctions like [here in Orlando], we can view ourselves as leaders in all methods of asset disposition.” Woah. As I visited with Jim, I picked up on three themes that have intrinsic business value for you as he discussed the integration and rollout of E1, the company’s best-kept secret, but not for long. (1.) Don’t Be a Dinosaur. A past consulting client of Jim’s was Encyclopedia Britannica, the first dinosaur (aka victim) of the Internet; the best in the world at what it did, the company did not readily understand its
close substitutes like Wikipedia. I ask you, esteemed dealer reader, though you excel at what you do, could some part of your business be heading for extinction? And what’s your strategy for seeing the ice age before it settles upon you? (Hint: Your young leaders are good at sniffing out stale, and they’ll get even better by hanging with their peers at the AED Leadership Academy this summer.) Acknowledging the technology disruption of this industry, Jim Barr is boldly taking the blinders off his company and broadening Ritchie’s offerings to customers via the “Craigslist” approach, aiming to be more things to more customers. (2.) Listen to Customers. Jim is taking all his cues from customers. Ritchie has been actively surveying its customers by the thousands and recognizes that about 40 percent of them are currently utilizing Craigslist. “We can just let them go somewhere else,” says Jim, “or we can have something that’s competitive so there’s no reason to go outside Ritchie. “Understand what your customers are doing in a way you haven’t before,” he says. “I know everyone doesn’t have a big marketing department but you can ask them questions. How are they buying? What are the pain points in their business? …The answers change over time.” (3.) Don’t Be Distracted by Shiny Objects. The great, yet potentially debilitating, thing about doing something new is that 90 shiny objects can pop into the foreground. Ritchie’s plan is to integrate the E1 direct buyer-seller option (with more buyer control) into the mainstream dialog of its physical-auction sales force. But it’s been like organ-rejection among a sales team ingrained with deep belief in the benefits of live, unreserved auctions. Now, however, the great majority of the company is on board with one focus: To mean more things to more customers. Ritchie is launching pilot E1 endeavors into Chicago, Southern California, Dallas, and a telemarketing effort. Ritchie’s got plans to grow and change; keep an eye on them. Thanks for reading! n
KIM PHELAN (kphelan@aednet.org) is the executive editor of Construction Equipment Distribution and director of programs for AED. March 2015 | Construction Equipment Distribution | www.cedmag.com | 9
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2015 Financial Symposium Peabody Hotel Memphis
April 22nd - April 24th
New Location Open For Registration
Placing your Financial Ducks in a Row Join AED at one of the most anticipated events of the year, the Annual Financial Symposium. The Symposium will take place at a new location, the legendary Peabody Hotel, in Memphis, Tennessee.
Register Today Online: Aednet.org/2015FinancialSymposium -Ad_template.indd 2
Questions? Contact Rebecca Lintow RLintow@Aednet.org or (630) 468-5113 3/2/2015 10:32:21 AM
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You Know the Potential When Two People Talk Multiply that by several hundred and you’ll experience the public policy horsepower of AED at work. Attend AED’s Washington Fly-In
Coverage Types/Coverage Terms
June 3-4 | Willard Intercontinental
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
What are the issues you care about most? Bonus depreciation & Sec 179? Tax reform? Highway, bridge, airport and water infrastructure funding? Environmental and labor regulations? Energy development? Obamacare?
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.
They’re all on the radar screen on Capitol Hill! Register now at aednet.org
Current events and news for the equipment distribution industry 12 » AED hp
16 » Industry Beat 22 » Data Trends 23 » MoneyMan 24 » Ready to Order
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
Brian Freitag 970-946-8133
March 2015 | Construction Equipment Distribution | www.cedmag.com | 11 GGC.indd 1 ggc_ad.indd 1 11_Happening_Title_Page_KP.indd 11
2/7/2014 9:05:23 AM 12/9/11 2:01 PM 3/9/15 11:52 AM
>> AED hp Join Coach Bill Courtney at AED’s Financial Symposium April 22-24 at the Peabody Hotel in Memphis
A
ED is excited to announce the newest addition to the Financial Symposium, Coach Bill Courtney. Courtney is a familiar name to those who saw him in Undefeated, the Oscar-winning movie about the high school football team he coached in a downtrodden section of North Memphis. As the Syposium’s kickoff keynoter, he will discuss the key principles of service, civility, leadership, character, commitment, and forgiveness – all of which have helped young people and adults live better and more fulfilled lives. Financial Symposium, formerly known as the CFO Conference, is an engaging, interactive program for the dealership’s financial personnel that blends today’s hot financial topics with fun networking events – a great place to absorb best practices and tips for success in 2015. Visit aednet.org/2015financialsymposium/ for the complete schedule.
We Couldn’t Have Done It Without You!
A
ED sends a special shout-out and big Thank You to all the great companies that sponsored the AED Summit as well as the Live Auction and Golf event! Please visit aednet.org to see who supported your association at its biggest event of the year!
AED Awards Ken Taylor for Government Affairs Leadership
O
hio CAT President Ken Taylor received the 2015 AED Democracy Award at this month’s AED Summit in Orlando. The Democracy Award is given each year to an individual who has made exceptional contributions to AED’s Government Affairs Program. “Ken has worked tirelessly to advance our common interests in the nation’s capital,” said AED Vice President of Government Affairs Christian Klein (left). “He’s helped raised the visibility of many our priority issues – highways, taxes, and energy policy – with members of the highly-influential Ohio congressional delegation. Just as important, Ken has challenged his industry colleagues around the country to get more personally engaged.”
PAC Power
T
he 2015 Summit featured the first-ever fundraiser for AED’s Political Action Committee (AED PAC). The PAC is a special account – funded entirely by personal contributions from dealer executives – the association uses to help elect congressional candidates who share our commitment to strong infrastructure programs and pro-growth tax, regulatory, and energy policy. The AED PAC reception on Feb. 12 raised more than $25,000 and puts the association on track to repeat its success from last year.
When The Foundation Scores, You’re the Winner – Please Pledge Your Generous, Tax-Deductible Support to the Only Nonprofit Organization Committed to Building, Training the Dealer Workforce The AED Foundation is the only Foundation whose sole mission is to “enhance construction equipment dealer success.” The initiatives that underscore that mission are: • College technical standards developed and maintained “by the industry, for the industry” • AED accreditation of college construction equipment technology programs 12 | www.cedmag.com | Construction Equipment Distribution | March 2015
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>> AED hp
Don’t Miss It Mark Your Calendar For details and to register, visit the AED online store at aednet.org or call 800-388-0650. March 3-5, 2015 The Four Pillars of the Sales Profession Dayton, Ohio Presented by Don Buttrey 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.
March 26, 2015 Webinar: 401(k) – “What’s Uncle Sam Up to Now”? | 10-11 a.m. CST Presented by Todd Thompson April 2 Webinar: Converting Inquiries to Sales & Rentals | 10 a.m. CT Presented by Signature Worldwide April 20-25, 2015 Intermat Paris-Nord Villepinte, France
Proposed New Members
Winners’ Circle
AL-JON, Inc. Ottumwa, Iowa
Magnetech Industrial Services Massillon, Ohio
BMO Harris Bank Minneapolis, Minn.
Ogden Forklifts, Inc. Atlanta, Ga.
Bobcat of Atlanta Atlanta, GA
ProCon, LLC Las Cruces, N.M.
CMI Roadbuilding Inc. Oklahoma City, Okla.
Southwest Products Ridgefield, Wash.
Construction Crane & Tractor Inc. Folcroft, Pa.
Top Lift Enterprises Stoney Creek, Ont.
Construction Machinery Company, LLC Louisville, Ky. Dozier Crane & Machinery, Inc. Pooler, Ga. Heavy Equipment Mfg. Grandy Center, Iowa Hydromec Inc. Dolbeau Mistassini, Quebec
April 23-24 The AED Foundation Financial Symposium Memphis, Tenn.
Turtle Plastics Lorain, Ohio Zoomlion Heavy Industry NA, Inc. Yorkville, Wis. American Risk Services Cincinnati, Ohio Broderson Manufacturing Lexana, Kan.
T
wo new raffle drawings were among the many fun new elements at AED Summit last month. EPG Insurance donated two PGA Tournament tickets and Gary Bridwell from Ditch Witch Oklahoma was the winner, drawn at the Friday morning ChairGary Bridwell man’s Inaugural Breakfast. The raffle raised $850 for the workforce and education programs of The AED Foundation. AED also offered Bryan Heinrichs a drawing at the end of the week to encourage attendees to use the new interactive app at Summit this year – Bryan Heinrichs from Burris Equipment in Illinois, was the lucky winner of a new iPad.
• AED technical assessments for pre-hire evaluations • Industry - and position - specific training programs What we do on your behalf is funded through The Foundation’s Annual Campaign, and this year’s campaign is very close to our goal of $300,000. But we need your participation to help us achieve a strong finish! With your support we will continue to serve member needs well throughout 2015. This is an investment in a successful future – both for you and for the young people entering our industry. To pledge your contribution, simply contact Rebecca Lintow at (630) 468-5113, rlintow@aednet.org. Your tax-deductible donation will allow us to continue serving your needs better. March 2015 | Construction Equipment Distribution | www.cedmag.com | 13
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>> AED hp
Summit Blasts Great New Tune
AED Presiden t and CEO Brian McGui re outlined the exciting lineup of 20 15 executive ev ents, star tin g with the upco ming Financ ial Symposium April 22-24 in Memphis an d the Washing ton Fly-In June 34.
It not only looks awesome – it really was. Make sure you attend Summit 2016 at the Gaylord National near Washington, D.C., Jan. 19-22. We’re only going up from here!
E
ducation. Progress. Innovation. That was the theme for AED’s 2015 Summit in Orlando last month – and while all those pieces played out in stereo Feb. 10-13, the vibe among the 1,450-plus attendees was pumped and exhilarating. One-hundred twenty-two CONDEX exhibitors bought up every available AED square foot in the hall, and 64 manufacturers and service firms booked all AED’s available hospitality suites and meeting rooms. AED gives special thanks to Volvo Construction, ESCO, Liebherr and Kawasaki for holding their official dealer events at the Summit! Eighty-eight golfers took to their sticks Tuesday, Feb. 10 on the beautiful Hawk’s Landing course at the Orlando World Center Marriott, which benefited The AED Foundation to the tune of $18,000; and the next evening Ritchie Bros. conducted their annual Live Auction, which raised nearly $48,500 for the Foundation’s workforce development programs. Summit wowed attendees with four world-class keynotes, six concurrent educational tracks twice a day on two days, threw a jumpin’ Summit Celebration Party, and held meetings for three new groups: the Manufacturers’ Advisory Council, Compact Equipment Dealers, and Future Leaders. If you missed it, you missed a lot – so put the next one on your calendar now! AED Summit 2016 blasts into the Washington, D.C., metro area at the elegant Gaylord National Resort and Convention Center Jan. 19-22. Start planning now so all your key managers can join you for a rich menu of dealer-specific education and much much more. n
Maj. keynoter Opening n a s a ney w Dan Roo n. ru e m o h inspiring
Don Shilling accepts the Chairman’s gavel from installing officer Dale Vaughn at the Friday breakfast ceremony.
AED Past Chairman Dale Vaughn (right) installed the 2015 officers (left to right): Todd Hystad, Dennis Heller, Wes Stowers and Whit Perryman.
Outgoing 2014 Chairman Watters and his wife Patty were heartily thanked for their service.
A ED F Cha ounda ti ir urge man Ro on y Ke d co de d rn n t in ic u p o r a t i o n t o us t in g o su pth e pow u e T h e r f ul w o n i q u e , r Fo u n da k of ti o n .
Closing keynoter e Tom Ridg d e id v pro r’s an inside lobal g n o w vie issues.
Board member Ron Barlet follows up with speaker Rob Park who taught a session about telematics and profitability.
14 | www.cedmag.com | Construction Equipment Distribution | March 2015
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Mark Fern andez, chief lea dership off icer at The Luck Companie s, taught the princi ples of ig niting hu man pote ntial throu gh Value s B a se d L e adership .
AED’s 20 15 Chairm an Don Shilli ng addre ssed the mem bership w ith a mix of “F argo” hu mor and serio us focus on AED’s pri orities fo r the year – lea ding the list are work force dev elop m ent a n d public po lic y.
U.S. Department of Transportation’s Deputy Secretary Victor Mendez spoke to more than 500 equipment industry leaders attending the Summit’s opening general session. He laid out the Obama administration’s ambitious highway reauthorization plan and encouraged equipment distributors to press for congressional action.
2014 Chairman Tim Watters reminded attendees how far AED has come in just a year’s time, pointing to numerous positive changes initiated by Brian McGuire.
Recognizing AED’s top-tier advocacy program, Mendez implored attendees to urge lawmakers to take immediate and decisive action to restore certainty to federal surface transportation programs. Small business owners and executives are powerful advocates, he said. Mendez’s call to action serves as a reminder of the importance of attending the AED Washington Fly-In, June 3-4. Please mark your calendar and register now at aednet.org.
A sold-o u Feb. 11 t CONDE X wa s op en by (left ed to righ D o n Sh t) Tim illing a Wat ters nd Bria , n M c Gu ire.
The Summit Celebration Party shimmered with elegance, amazing food, and lots of laughter and conversation.
During the Ritchie Bros/ Foundation Live Auction, board member Pat McConnell was the distinguished winning bidder on assorted wines donated by Ajax Tools.
Education at Summit was bigger and better than ever. With six concurrent tracks there was something for everyone.
s ob a l
Street Corner Symphony kept the party rockin’ with a huge range of fun beats.
was CONDE X h scenes it w d e ll fi – dealers like this ng with connecti itors. ib h x 122 e
Members enjoyed visiting with Clyde Fessler, who rode to the stage to tell the Harley Davidson marketing turnaround story.
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>> INDUSTRY BEAT
Eighty Percent of Construction Firms Plan to Expand Headcount
79%
86% 81%
74% % of firms that plan to purchase new construction equipment
% of firms that plan to lease new construction equipment
2015
2014
2015
2014
Eighty percent of construction firms plan to expand their payrolls in 2015 (compared to only 57 percent in 2014) while only 7 percent expect to reduce headcounts according to survey from the Associated General Contractors of America. The survey, conducted as part of Ready to Hire Again: The 2015 Construction Industry Hiring and Business Outlook, indicates that most contractors are optimistic about the year ahead and ready to expand, but will have to cope with chalSource: Associated General Contractors of America 2015 lenges including worker shortages and regulatory burdens. Construction Industry Hiring and Business Outlook “Contractors are extremely optimistic about the outlook for 2015,” said Stephen E. Sandherr, the association’s chief executive officer. “Indeed, if their predictions prove true, industry employment could expand this year by the most in a decade.” The survey showed, however, that many firms that plan to hire this year expect to make only modest increases, with 90 percent of those that expect to add employees reporting they will expand by one-quarter or less this year. Contractors are most optimistic about the retail/warehouse/lodging segment, with the difference between optimists and pessimists – the net positive reading – at 33 percent. Contractors are also optimistic about the manufacturing, private office and energy construction segments, with net positive readings of 26, 25 and 24 percent respectively. Water and sewer construction received net positive reading of 24 percent. The highway market had a net positive reading of 16 percent and higher education 15 percent. Seventy-nine percent of firms report they plan to purchase new construction equipment in 2015 and 81 percent plan to lease new equipment. However, the scope of those investments is likely to be limited, with roughly two-thirds of firms that plan to buy or lease equipment reporting they will invest $250,000 or less. Only 7 percent of firms report having a hard time getting bank loans this year, while only 24 percent report customers’ projects are being delayed or cancelled because of tight credit conditions. The survey revealed that finding enough skilled construction workers is expected to challenge contractors. Proposed new federal regulations are also a concern for many contractors surveyed. The Outlook was based on survey results from over 900 construction firms from 48 states and the District of Columbia. Varying numbers responded to each question. Complete survey results can be found at www.agc.org.
Ritchie Bros. Sells US$179-plus Million of Equipment at Five-Day Orlando Auction Ritchie Bros. sold a record-breaking 10,500-plus equipment items and trucks at its five-day unreserved public auction Feb. 16-20 in Orlando, Fla., which attracted a record-breaking 9,350-plus bidders from 81 countries – 5,000 of whom bid online. The auction generated US$179-plus million in gross auction proceeds, including a record US$66-plus million sold to online buyers. Ritchie Bros. sold equipment for 875 sellers, including over 80 heavy construction items for Hermanos Yarull T. & Co., a civil engineering contractor based in the Dominican Republic. “This was our first time selling with Ritchie Bros. and we were blown away by the magnitude of the auction and the efficiency of how it all came together,” said Cesar Alvarez from that company. “We’ve been in business for more than 40 years and have tried selling equipment piece-by-piece in a variety of ways before and it was a headache. With Ritchie Bros., we just give all the equipment to them and it’s done. We get better resale prices and great customer service.” Close to US$144 million of equipment (approximately 80 percent) was sold to buyers located outside the state of Florida, including more than US$48 million (or 27 percent) sold to buyers outside the country. Buyers participated from as far away as Australia, Ecuador, Thailand, Italy, the UK, and the United Arab Emirates. “We had a tremendous crowd at [the] Orlando auction, with a large presence both on site and online,” said Steve Kriebel, regional sales manager, Ritchie Bros. “This resulted in strong prices throughout the week, particularly on crawler tractors, excavators and transportation equipment.”
Steve Kriebel
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in the news BlueLine Rental, a full-service equipment rental company, signed a definitive agreement to acquire Trico Equipment, Inc., a rental company specialized in aerial lift equipment with locations in New Jersey, Pennsylvania, Maryland and Texas. Terms of the transaction were not disclosed. BlueLine Rental CEO Phil Hobson said he expected Trico senior management to stay on with BlueLine. BlueLine is owned by Platinum Equity, which acquired the business in January 2014. In September 2014 BlueLine acquired JustRuss Rental Inc., a full-service equipment rental company with three locations in Alabama, which expanded BlueLine’s footprint in the Southeastern U.S. SMS Equipment Inc. augmented its equipment offerings with the addition of heavy-duty, high-production products from Fecon. Fecon manufactures a broad line of durable, purpose-built machines that fit a wide range of applications across four primary markets: vegetation management, environmental, oil and gas and construction. HOLT CAT has appointed Robert “Bert” Fulgium vice president of Product Support for its Machine Division. In his new role, Fulgium will oversee all Cat heavy equipment parts and service operations throughout HOLT CAT’s operating territory. Prior Bert Fulgium to his new position, he served as the vice president of Product Support for HOLT CAT’s Power Systems Division. Fulgium replaces HOLT CAT veteran Ron Craft, who recently announced his retirement from the company. In addition, HOLT CAT appointed Evan Creson vice president of Sales for its Machine Division. He will lead sales of loaders, dozers, excavators, scrapers, compactors,
skid steers, and other Cat machines for the company’s Southern Region, which includes San Antonio, Austin, Corpus Christi and the Rio Grande Valley. Creson brings more than 15 years of experience working in a variety of roles with Caterpillar Inc. and the Cat global dealer network. Most recently he served as president of GECOLSA, a leading Cat dealer based in Bogota, Colombia. LiuGong Dressta Machinery has appointed Howard Dales as its new vice president of Global Sales for Dressta. Dale joins Dressta with 20 years of construction sales and marketing experience in China and South East Asia. His previous position was as a Shanghai-based regional direcHoward Dales tor for CNH Industrial. Dales will be responsible for all aspects of Dressta’s global business including channel management, capacity building, after-sales and service operations and expanding the corporation’s current distribution network.
Cashman Power Solutions and Global Pump are now partners in meeting the dewatering needs of construction, mining, and industrial customers throughout Nevada and parts of California. Global Pump, a Michigan-based company, provides pumps and accessories to the highly specialized and complex needs of the industrial/manufacturing sector worldwide. Cashman plans to hire a specialized pump sales representative, as well as a pump systems engineer to assist their sales and service personnel. Kubota Tractor Corp. has expanded the roles of several of its senior leaders. Todd Stucke, has been named vice president, Sales, Marketing & Product Support. In this expanded role, Stucke will take on responsibility for each
of the company’s product segments, including ag and turf equipment, utility vehicles, and construction equipment. He will also oversee their supporting operations, including responsibility for sales, marketing, service, national accounts, and dealer development. Alex Woods, has been promoted from Southeast division manager to vice president, Divisional Operations. Dan Jones has been promoted to vice president, Human Resources, Legal & Administration. In this newly created role he will maintain oversight of the company’s risk management and compliance matters. Hyundai Construction Equipment Americas, Inc. was the title sponsor during the NASCAR Camping World Truck Series race at the Atlanta Motor Speedway on Saturday, Feb. 28. The NASCAR partnership also secures Hyundai Construction Equipment Americas’ position as the Official Heavy Machinery Equipment supplier at Atlanta Motor Speedway.
“As a Georgia-based company, Hyundai Construction Equipment Americas is proud to support one of our state’s favorite pastimes at Atlanta Motor Speedway, one of the country’s greatest racing venues,” said Curtis Goettel, North American marketing and dealer development manager, Hyundai Construction Equipment Americas. “Our partnership with NASCAR gives race fans at Atlanta Motor Speedway – and the millions who watched on television across (continued on next page)
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in the news the country – even more reason to get excited about the Hyundai brand and our construction and material handling equipment.” Atlas Copco has decided to discontinue its Powercrusher business, in which it manufactures and sells mobile crushers and screeners for quarrying, civil engineering and recycling. Atlas Copco will stop the manufacturing in the plant in St. Valentin, Austria, during 2015. Atlas Copco will arrange for customers getting aftermarket service support for their existing fleets. Tony Satterthwaite, vice president, president – Cummins Power Generation, will become president of the company’s Distribution Business Unit, succeeding Vice President and President Pamela Carter who is retiring. Antonio Leitao, vice president – Power Products for Cummins Power Generation, will succeed Tony Satterthwaite as the leader of that business unit. Both assume their new roles April 1. Iowa Mold Tooling Co. Inc. (IMT), an Oshkosh Corporation company, announced that Tim Gerbus has joined IMT as director of sales. Gerbus brings 30 years of experience in sales, marketing and executive leadership to IMT, Tim Gerbus a manufacturer of service vehicles, cranes, hydraulic loaders and air compressors. The Manitowoc Company, Inc. announced several management team transitions in line with the company’s long-term succession planning process. Eric Etchart, who has served as president of Manitowoc Cranes for the past nearly eight years, will move to a new role as senior vice
president, Business Development of The Manitowoc Company effective immediately. Larry Weyers will succeed Etchart as president of Manitowoc Cranes. Weyers most recently served as global executive vice president for Manitowoc Cranes. In addition, Manitowoc announced the planned retirement of Mark Beffel, vice president, Operational Excellence, effective Feb. 2. Josef Matosevic will assume the role of senior vice president of Global Operational Excellence of The Manitowoc Company and will lead the company’s manufacturing, quality, and safety initiatives upon Beffel’s retirement.
Eric Etchart
Larry Weyers
Mark Beffel
Josef Matosevic
A new partnership between the U.S. Environmental Protection Agency, the Associated General Contractors of America, and the National Center for Manufacturing Sciences (NCMS) will create significant upgrades to the Construction Industry Compliance Assistance website (www.cicacenter.org), helping the construction industry learn how to comply with federal and state environmental guidelines. Updates include tools and the latest information on state and federal environmental requirements as well as green construction and environmental management programs.
John Deere Construction & Forestry Division produced a series of videos to help owners, operators, and fleet managers understand the many benefits of WorkSight and how it optimizes their machines, uptime and jobsites. The videos provide a bite-sized, topicspecific overview on subjects that are difficult to see and understand such as “Getting the most out of machines” and “Minimizing idletime.” John Deere WorkSight is a technology package that includes JDLink machine monitoring system, machine health prognostics, remote diagnostics, payload weighing, and grade control. Atlas Copco closed the acquisition of Titan Technologies International Inc., a provider of powerful bolting tools to the oil and gas and other industries. Clifton, N.J.- based Titan Technologies sells hydraulic torque wrenches as well as pumps and accessories. The products are used to ensure joint integrity during great pressure, for example on oil rigs, wind farms, ship yards and bridges. The National Commission for the Certification of Crane Operators (NCCCO) celebrates its 20th anniversary in 2015. NCCCO was established in January 1995 as an independent, non-profit personnel certification organization. Visit nccco.org/20Years for more information. McCann Industries, Inc. announced that Jim McCann has been named chief executive officer of the company as of Jan. 1, 2015. Dennis Kruepke is the former chief executive officer and will assume the role of chairman of the board. The ownership of the company has also changed through a stock Jim McCann purchase agreement, and McCann now owns 100 percent of the company.
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in the news Terex Corporation has acquired substantially all of the assets of DUECO, Inc. The acquisition brings DUECO’s sales and service operations, which have responsibility for Terex utilities products in 17 states, into the Utilities and Services business units of Terex Corporation. The acquisition gives Terex Services a national footprint with over 700 technicians and 56 service center locations. Terex Aerial Work Platforms (AWP), has appointed Anders Mantere as product manager, Genie Telehandlers. He will report to Chad Hislop, director of Product Management, Terex AWP. BOMAG Americas, Inc. has promoted Sergio Solis from his inside sales support position to field Territory Manager in the Midwestern region, replacing Larry Keach, who recently retired. Solis will be based
in Kewanee, Ill. Glenn Leighton has joined BOMAG as the territory manager for the West/ Southwest U.S. territory. Leighton Sergio Solis will work with both authorized distributors and contractors to provide equipment solutions from BOMAG’s entire line of road building, heavy Glenn Leighton compaction, landfill, asphalt rehabilitation and light compaction equipment. Select equipment dealers throughout the United States and Canada learned how they rank with their customers and compare with their competitors
as SATISFYD, a Customer Experience Management (CEM) software company and leader in customer satisfaction surveying, recently released a list of the top scoring dealers. Those represented on the SATISFYD 220 List achieved the highest overall ratings in their region based on their customers’ willingness to recommend their dealership to others, in 2014 survey results. The complete list can be found at www.satisfyd.com. KPI-JCI and Astec Mobile Screens has promoted Nick Alden to product manager at Johnson Crushers International, its Oregon manufacturing facility.
Nick Alden
(continued on next page)
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
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in the news Curry Supply Company has named Marc LaBorde as their national rental accounts manager. The company is a manufacturer and dealer of On-Road Water Trucks and other commercial Marc Laborde service vehicles,
and is a key provider of equipment to rental firms. KPI-JCI and Astec Mobile Screens has hired Stephen Whyte to manage the company’s trackmounted product lines in efforts
Stephen Whyte
to further develop the innovation behind its mobile equipment. Whyte will serve as the new product manager for the Fast Trax and Global Track product lines. Michael Marion and Cormac Kerins have been appointed to new positions with Atlas Copco Portable Energy Canada. Marion has been appointed national business development manager responsible for Power Generation and Michael Marion Lighting Towers. Kerins is now the product and business development manager responsible for air compressors, boosters and pumps. Cormac Kerins Bobcat Company has once again teamed up with longtime partners Rick and Julie Kreuter – co-hosts of the hit television show “Beyond the Hunt,” on The Outdoor Channel – to transform one lucky winner’s land into a remarkable place where native plants and animals will thrive for generations into the future. Through the Create & Conserve™ Contest, Rick and Julie will use a variety of Bobcat equipment and attachments – in conjunction with products from partnering sponsors – to assist the selected winner in completing the ultimate natural wildlife habitat. The project may include planting native grasses, digging a water hole, creating a food plot or planting trees and shrubs. Landowners can register to win by describing their land conservation vision and submitting photos of their outdoor spaces by April 15 at bobcat. com/landing/createandconserve/.
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PHYSICAL UTILI PHYSICAL UTILI PHYSICAL UTILIZATION
IndexBACKHOES had jumped so 1.1% while January’s 4.8% drop showed decreased AWP AWP - TELESCOPIC BOOMS − − 11.7%, - TELESCOPIC BOOMS −1.8%months 1.8% of 2014 the MomentumBACKHOES −1.1% activity relative to December, it was still in line with the moderate if at times hesitant upward trend that’s
80% 80% 80% 80% 80% 80% been present over the past three years. Compared to the same month a year ago, January’s Momentum Index 76.1% 76.1% 80% 80% 80% 80% 80% 80% 76.1% was up 76.1% 5.8%.80% 70.5%70.5% 70.5%70.5% 80% 80% 80% 80% 80% 76.1%76.1%70% 70% 70% 70% 70% 70% 70.5%70.5% 70.5%70.5% 80% 80% 80% 80% 80% 80% 76.1%76.1% 70% 70% 70% for 70% 70% 70% planning January’s decline the Momentum Index relative to December was the 70.5% result 70.5% of decreased 70.5%70.5% 80% 80% 80% 70% 80% 70% 70%10.2%, 80% 80% while the 70% 70% 70.5%70.5% 70.5% activity in both the commercial and institutional sectors. The institutional sector fell 70.5% 76.1%76.1%60% 60% 60% 60% 60% 70% 60% 70% 70% 70% 70% 70% 70% commercial sector edged down 0.4%. There were three commercial building projects exceeding $100 60% 60% 60% 60% 60% 70.5%70.5% 70.5%70.5% 60% 70% 70% 70% 60% million that entered planning during the latest month – the $150 million Park District 60% 60% 70% 60% 60% 60% 50% 70% 50% 70% 50% Office 50% 50% 50% Building in 2014 2014 2011 2012 2012 2013 2013 2014 2014 2011 2012 2012 2013 2013 2014 2014 2011 2012 201 60% 60% 13 2011 2011mixed-use January 2015 60%2011 60% 60% Dallas TX, a 60% $149 million Union Place 50% 50% 50% 50% office building in New York NY, and the $100 million50% 50% 2014 2014 2011 2011 2012 2012 2013 2013 2014 2014 2011 2011 2012 were 2013 2013 projects 2014over 2011 2012 201 13 2012four institutional 2014 2011 development in Mahopac NY. There $100 million that entered planning 50% 50% 50% 50% 50% 50% 60% 60% 60% 60% 60% 60% 2014 2014 2011 2011 2012 2012 2013 2013 2014 2014 2011 2012 2013 2014 2011 13 2011 2012 2013 2014 2011 50% 50% 50% 50% in during January, notably Orlando FL.2012 201 50% the $210 million UCF Downtown Campus (Creative Village) 50% SKID STEERS − 2013 HI-REACH − −1.4%1.4% FORKLIFTS - HI-REACH −0.9% 2014 2014 2011 FORKLIFTS 2012 2013 2013 2014 0.9% 2011 2012SKID 2013 2014 2014 2011 2012 201 13 2012 2014 2012 STEERS 80% 80%2011 85% 85%2011 85% 85%2011 82.7% 82.7% 50% 50% 50% 50% 50% 50% 2014 2014 2012 2013 2014 2011 2012 2013 2014 2011 2012 201 80% 85%2011 85% 82.7% 13 2011 2012 2013 2014 2011 2012 2013 2014 2011 80% 85% 85% 82.7% 85% the 80% 80% 85% 85% 82.7%82.7% 85% During final three months of 2014 the Momentum Index had The D odge M omentum I ndex 70% 70% 75% 75% 75% 75% 85% 85% 85% 85% 82.7%82.7%80% 80% (Year 2000=100) 70% 70% 75% 11.7 75% 75% jumped 75%percent, so while January’s drop showed decreased activity 63.0% 63.0%63.0% 63.0% 80% 85% 85% 75% 82.7% 70% 75% 85% 80% 85% 75% 82.7% 70% 63.0% 63.0% 63.0% relative December, it was still in line with the moderate if at times 60% 60% 65%to65% 65% 75% Jan-‐15 Dec-‐14 % C63.0% hange 65% 70% 70% 75% 75% 75% 75% 63.0%63.0% 63.0% 63.0% 65% upward 65% 65% 65% hesitant trend that’s been present over the past three years.60% 60% Dodge Momentum Index 121.1 127.2 -4.8% 63.0%63.0% 63.0% 63.0% 70% 70% 75% 75% 65% 75% 65% 75% 65% 65% 50% 60% 55% 55% 55% 55% January’s decline...relative to December was the 2014 result2014 of decreased60% 50% 2014 2014 2012 2012 2013 2013 2012 2012 2011 2012 201 Building 2013 2013 134.3 2014 134.8 -0.4% 60%2011 65%2011 65% 13 2011 Commercial 2014 65%2011 65%2011 63.0%63.0% 63.0%63.0% 50% 60% 55% 55% 50% 55% 55% activity commercial and institutional 2014 2014 planning 2011 2012 the 2013 2013 2014 2011 2011 Institutional 2012 Building 2013 2013 2011 2011 2012 201 January 2015The 13 2011 in both 2012 2014 sectors. 2012 2014 104.8 2014 116.6 -10.2% 60% 65% 55% 65% 50% 55% 55% 55% 60% 65% 65% 50% 2014 2014 institutional 2011 2012 2013 2014 2014 sector 2011 2012 20132013 2014 2014 2011 2012 201 13 2011 2012 2013 2011 2012 2013 2011 2011 & 2012 2012 & 2013 Jul 2013 / Jun sector fell 10.2 percent, while the commercial edged Oct 2014 / Sep 2014 50% 50% Source: Dodge Data & Analytics 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 13 80% 80% 80% 80% 80% 80% down 0.4 percent. For more information visit www.construction.com. 50% 50% 55% 55% 55% 55% 2014 2014 2012 2013 2014 2011 2012 2013 2014 2011 2012 201 80%2011 80% 80% − 2.9% FORKLIFTS WAREHOUSE/INDUSTRIAL − 0.2% AWP ARTICULATING BOOMS 13 2011 2012 2013 2014 2011 2012 2013 2014 2011 80% 80% 80% − 2.9% FORKLIFTS WAREHOUSE/INDUSTRIAL − 0.2% AWP ARTICULATING BOOMS AWP - TELESCOPIC BOOMS − 1.8% BACKHOES − 1.1% 72.8%72.8% 72.1%72.1% 72.1%72.1% 80% 80% 80% 80% 72.8%72.8%80% 72.1%72.1% 72.1% 70% 70% 70% 80% 70% 72.1% 70% 70% 80% 80% 80% 80% 80% 80% 80% 80% 80% 72.8%72.8% 76.1% 72.1%72.1% 72.1%72.1% 70% 70% 70% 70% 70% 70% 80% 80% 80% 72.8% 72.8% 76.1% 80% 80% 80% 72.1%72.1% 72.1%72.1% 70% 80% 70% 80% 70% 80% 70% 70.5% 70.5% 80% 80% 80% 60% 60% 60% 70% 60% 70% 60% 60% 76.1% 70% 70% utilization is the percentage of fleet cost which 70% The70.5% charts70% below show physical utilization by equipment category. Physical is 70% 70% 70% 70% 70.5% 72.8% 72.8%60% 70% 80% 80% 80% 72.1%72.1% 72.1%72.1% 60% 60% 60% 60% 60% 76.1% 70% 70% 70% 70.5% 70.5% on-rent during a given period. Physical utilization is cost weighted. “On Rent” and “In Fleet” status are determined on a nightly 70% 70% 70% 60% 60% 60% 70% 70% 70% 60% 60% 60% 50% 50% 50% 50% 50% 50% 80% 80% 80% 70% 70% 70% 70.5% 70.5% 76.1% 2014 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 201 60% 60% 60% 60% 60% 60% 13 2014 basis 2011 a week, 365 2012 2014 2013A unit is “In 2014 60% seven days days a year.2013 A unit is “On Rent” if it 50% is at a60% job2011 site earning2012 rental revenue. Fleet”50% if it is60% a 2011 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% 13 2011 2011 70.5% 70.5% 50% 50% 60% 50% 60% 50% 50% 50% 60% 60% 60% rental asset owned by2012 the 2012 client. Units out for repair and refurbishment are considered “In Fleet.” 60% 2014 2014 2011 2013 2013 2014 2014 70% 70% 70% 60% 2012 2012 2013 2013 2014 2014 2011 2012 201 60% 60% 13 2011 50%2011 50%2011 50% 50% 50% 50%2011 50% 2011 & 2012 2012 & 2013 Jul 2013 / Jun 201 50% 50% Oct 2014 / Sep 2014 13 2014 Source: 2011Jul 2012 2013 2014 2011 2012 2013 2014 2011 201 Rouse Asset Services. Contact Gary/2012 McArdle at gmcardle@rouseservices.com, 363-7520 2014 2012 2011 2012 2013 2013 2014 (310) 2011 2012 2012 2013 2013 2014 2014 2011 2012 201 60% 60% 60% 13 2014 2011 2014 & 2013 2013 Jun 2013 50% 50%2011 50%2011 Oct 2014 / Sep 2014 80% 70% 70% 80% 80% 80% 50% 50%2011 50% 50%2011 50% 50%2011 13 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 13 2014 2012 2013 2014 2012 2013 2014 201 13 2014 2011 2012 2013 2014 2011 2012 − 2013 2014 2011 201 AWP TELESCOPIC BOOMS 1.8% BACKHOES − 71.5% 71.5% 50% 50% 50% 80% 80% AWP FORKLIFTS 70% 70% 80% 80% - SCISSOR GENERATORS −2013 −− 0.4%0.4% − -4.0% AWP - 2012 SCISSOR LIFTS GENERATORS -4.0% −HI-REACH 1.1% SKID − 1.4% 2014 -LIFTS 0.9% 13 1.8% 2014 2014 2012 STEERS − 2013 201 70% 70%2011 BACKHOES 60% 60%2011 70% 70%2011 71.5%71.5% 80% 85% 85% 80% 80% 70% 80% 82.7% 70% 80% 80% 80% 80% 50% 50% 50% 70% 70% 70% 70% 71.5%71.5% 80% 80% 60% 60% 13 2014 2012 2013 2014 2012 2013 76.1% 2014 201 80%2011 85%2011 85%2011 82.7% 80% 80% 80% 55.1%55.1% 55.1%55.1% 76.1% 76.1% 80% 70% 80% 70% 80% 60% 70% 70% 80% 70% 71.5%71.5% 60% 70% 76.1% 80% 80% 85% 80% 85% 82.7% 60% 60% 50% 50% 60% 60% 70.5% 80% 80% 55.1%55.1% 55.1% 80% 76.1% 76.1% 55.1% 70% 75% 75% 70% 70% 60% 70% 70% 70.5% 76.1% 70% 70% 70% 80% 80% 50% 60% 80% 85% 85% 82.7% 60% 60% 60% 60% 71.5%71.5% 50% 70.5% 80% 55.1%55.1% 80% 80% 55.1%55.1% 76.1% 70% 70% 70% 75% 75% 63.0% 70.5% 80% 60% 76.1% 76.1% 70% 70% 70% 63.0% 80% 70% 70% 60% 50% 60% 70% 60% 60% 70.5% 50% 60% 55.1%55.1% 55.1%55.1% 50% 50% 50% 70% # # # 76.1% 76.1% 80% 85% 85% 50% 70% 70% 40% 40% 75% 82.7% 70% 75% 63.0% 63.0% 80% 80% 70.5% 70% 70% 70% 2014 80% 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 201 60% 65% 65%2011 60% 50% 60% 13 2014 2011 2012 2013 2014 2011 2012 2013 2014 70.5% 60% 76.1% 50% 60% 50% 60% 80% 80% 60% 60% 63.0% 50% 40% 50% 70% 70% 40% 50% 70% 75% 75% 63.0% 70.5% 55.1% 55.1% 70% 70% 70% 76.1% 76.1% 55.1% 55.1% 60% 60% 2014 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 201 60% 65% 65%2011 13 2014 2011 2012 2013 2014 2011 2012 2013 2014 50% 40% 50% 50% 70% 70% 60% 60% 60% 40% 50% 60% 60% 50% 50% 60% 60% 63.0% 63.0% 70.5% 2014 2014 2012 2012 2013 2013 2014 2014 70% 75% 75% 60%2011 60% 65%2011 2011 2012 2012 2013 2013 2014 2014 2011 2012 201 60% 65% 13 2011 2011 70.5% 50% 40% 50% 70% 70% 70% 60% 60% 50% 50% 40% 50% 60% 55% 55% 50% 50% 13 2014 2011 2012 2013 2014 2011 2012 2013 2014 2011 201 70% 70% 2014 50% 2011 2012 2012 2013 2013 2014 2014 2012 2012 2013 2013 2014 2014 2011 2012 201 60% 60%2011 65% 65%2011 13 2014 2011 63.0% 50% 50% 80%2011 2011 63.0% 2012 2013 2014 2011 60% 2012 2013 2014 2011 2012 20 80% 80% 50% 60% 60% 60% 55% 55% 80% 80% 80% 50% 50% 50% 50% 40% 40%20112012 50% 50%2011 201150%2011 2012 2012 2013 2013 2014 2014 2011 132014 2014 20122013 20132014 2014 201 60% 60% 50% 50% 80%2011 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 20 2014 50% 2011 2012 2013 2014 2012 2013 2014 2011 2012 80% 80% 60% 65% 65% 50% 55% 13 2014 2011 2012 2013 2014 2011 2012 2013 2014 2011 201 55% 80% 80% 80% 72.8%72.8% 72.8%72.8% 50% 50% 2011 2011 2012 2012 2013 2013 2014 2014 2011 2012 2013 2014 132014 2014 2011 2012 2013 2014 2011 201 60% 60% 60% 50% 50% 80% 2012 2011 60% 2012 2013 2014 2011 60% 2013 2014 80% 55% 50% 201180% 55% 2012 20 80% 80% 80%2011 72.8% 72.8% 50% 50% 50% 72.8% 72.8% 2011 2012 2013 2014 2011 2012 2013 2014 132014 2014 2011 2012 2013 2014 2011 2012 2013 2014 201 70% 70% 70% 70% 70% 50% SKID − FORKLIFTS 0.9% 80% 80% - HI-REACH 80% 2011 50% 2012 SKID STEERS 2013 2014 201169.5% 2013 − 2014 201180% 70% 2012 STEERS 20 80% 80% 80% 2012 80% 80% 69.5% 72.8% − 1.4% 0.9% 72.8% 72.8% − -1.6% WHEEL LOADERS − 0.7% EXCAVATORS 2014 2011 2012 2013 2014 2011 2012 2013 2014 80% 80% 72.8% 85% 50% − -1.6% WHEEL LOADERS − 82.7% 0.7% EXCAVATORS 70% 55% 70% 55% 70% 70% 50% 50% 50% 0.2% 80% 85% 70% 70% 13 2014 2012 2013 2014 2011 2012 2013 2014 201 80%2011 80% 80%2011 82.7% 82.7% − 2.9% FORKLIFTS WAREHOUSE/INDUSTRIAL − AWP ARTICULATING BOOMS 50% 50% 69.5% 72.8% 72.8% 72.8% 72.8% 72.1% 72.1% 80% 80% 2012 2013 2014 2013 2014 2012 20 70% 80% 80%2011 72.8% 80%2011 85%201169.5%80% 70% 2012 70% 80% 80% 82.7% 2014 201170% 2012 2013 2014 2012 2013 2014 80% 85%2011 80% 80% 80% 82.7% 82.7% 60% 60% 70% 60% 70% 60% 60% 60% 69.5%69.5% 72.8% 72.1% 72.1% 70% 70% 70% 80% 85% 70% 70% 70% 70% 70% 70% 80% 82.7% 72.8%72.8% 72.8%72.8% 80% 85% 80% 80% 80% 82.7% 82.7% 70% 70% 75% 60% 60% 60% 60% 60% 69.5%69.5% 72.8% 72.1% 70% 75% 70% 70% 70% 80% 80% 72.1% 60% 85% 82.7% 82.7% 80% 85% 60% 82.7% 70% 70% 70% 70% 70% 60% 70% 70% 70% 72.1% 60% 60% 60% 60% 63.0% 75% 72.8% 50% 50% 80% 80% 80% 50% 50% 72.1% 70% 75% 50% 50% 70% 70% 70% 63.0% 69.5% 69.5% 2014 80% 2011 2012 2012 2013 2013 2014 2014 2011 2012 2012 2013 2013 82.7% 2014 2014 2011 2012 201 60%2011 60%2011 60%2011 80% 85% 60% 60% 13 2014 70% 75% 70% 63.0% 50% 60% 50% 60% 50% 60% 80% 85% 60% 82.7% 82.7% 50% 50% 50% 70% 75% 70% 70% 70% 60% 60% 65% 63.0% 72.8% 72.1% 72.1% 60%2011 65% 2014 70% 2012 2013 2014 2011 2012 2013 2014 2011 2012 201 60% 60% 60%2011 13 2014 2011 2012 2013 2014 2011 2012 2013 2014 70% 75% 63.0% 50% 60% 50% 60% 50% 60% 50% 70% 75% 60% 50% 50% 60% 60% 63.0% 60% 60% 65% 2014 2014 2012 2012 2013 2013 2014 2014 70% 70% 70% 60%2011 65% 60% 2011 2012 2012 2013 2013 2014 2014 2011 2012 201 60% 60% 13 2011 2011 2011 50% 50% 50% 63.0% 50% 50% 50% 80% 80% 50% 50% 50% 80% 80% 63.0% 75% 70% 75% 60% 65% 60% 13 2014 2011 2012 2013 2014 2011 2012 2013 2014 2011 201 70% 2014 70% 2012 2012 2013 2013 2014 2014 2011 2012 2012 2013 2013 2014 2014 2011 2012 201 60%2011 65% 60% 60% 60% 13 2014 2011 2011 2011 50% 50% 55% 50% 50% 50% 50% 80% 80% 2011 60% 2012 201320122013 201420132014 2012 20 60% 60%201150% 80% 65%2011 55% 50% 50% 2012 63.0% 2014 201180% 2012 2013 2013 2014 2014 132014 2014 2011 2012 2013 2014 201 50% 50%20112012 50%2011 65%2011 63.0% 71.1% 50% 50% 55% 50% 71.1% 50% 50% 80%2011 2014 2014 2012 2012 2013 2013 2014 2012 2013 2014 2014 201180%2011 60% 60%2011 60%2011 13 2011 80% 2011 50% 2012 2011 55%2011 2011 2012 20132012 20142013 2012 2012 201 20 201180% 2012 2013 2013 2014 2014 2014 2012 2013 2014 132014 2014 2011 2012 2013 2014 70% 70% 2011 2012 2013 2014 2011 201 70% 70% 50% 71.1% 60% 60% 65% 50% 55% 50% 50% 50% 71.1% 65% 80% 80% 50% 80% 2011 60% 2012 2013 2014 2011 55% 2012 201320122013 201420132014 201180% 2012 20 2011 2012 2013 2014 2011 2012 132014 2014 2011 2012 2013 2014 2011 2014 2011 201 70% 70% 70% 70% 71.1% 50% 50% 71.1% 55% 80% 70% 80% 2012 55% 2011 50% 2012 2013 2014 2011 2012 2013 2014 2011 20 50% 50% 50% 2014 2011 2012 2013 2014 2011 2012 2013 2014 80% 80% 70% 70% 80% 80% 70%2011 80% 80% 80% 71.1% 71.1% 80% 80% filings70% UCC on2011 12 earthmoving units. 2013 13 2014 2012 2013 2014 2012 2014 201 80% 80%2011 60% 60% 60% 70% 60% 50% 50% 55% 50% 55% 70% 70% 70% 70% 71.5% 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 20 80% 80% 80% − 2.9% FORKLIFTS WAREHOUSE/IN AWP ARTICULATING BOOMS 2014 2011 2012 2013 2014 2011 2012 2013 2014 80% 80% 80% 2.9%72.8% FORKLIFTS 0.2% w w w .wr w o uw60% s. er o au n 60% ctAWP 70% 80% LIFTS − − GENERATORS − 72.8% 0.4% -4.0% 60% 60% sa el yatni ca -sl y.WAREHOUSE/INDUSTRIAL iocm s . c-oSCISSOR m 71.1% 71.1% 72.1% 72.8% 72.1% 70% 70% DEC JAN FEB80% MAR71.5% APR 60% MAY JUN JUL AUG SEP OCT 80% NOV 70% Grand 80% 80% 80% 80% 70% 80% 70% 60% 60% 70% 70% 60% 72.8% 60% 72.1% 72.8% 72.8% Description 70% Equipment 70% 70% 50% 50% 50% 50% 72.1% 71.5% 70% 70% 60% 70% 80% 80% 13 2013 14 72.1% 1470% 14 14 14 14 14 14 80% 1455.1% Total 80% 80% 14 2011 2011 2012 2012 2013 2014142014 2011 2012 201 60% 60% 2011 72.8% 72.8% 72.8% 55.1% 70% 70% 70% 50% 60% 50% 60% 80% 70% 80% 72.1% 71.5% 70% 70% 50% 50% 70% 60% 70% 2011 2012 2013 2014 2011 2012 201 60% 50% 60%2011 2011 Trucks 2012 2013 67 72.1% 2014 72.8% 72.8% 72.8% 55.1% 55.1% 80% 80% 80% Dump 120 77 121 160 143 134 118 118 111 117 69 1,355 50% 70% Articulated 70% 50% 70% 80% 80% 72.1% 50% 70% 70% 50% 70% 60% 70% 60% 60% 60% 60% 60% 60% 60% 2012 2012 2013 2013 2014 2014 60%2011 60% 2011 2012 201 60%2011 50% 60%2011 71.5% 55.1% 55.1% 50% 50% 70% Crawler 70% 70% 70% Dozers 50% 50% 72.8% 465 435 2013 386 72.1% 1972014 32970% 433 495 403 366 369 4,591 72.8% 72.8% 72.1% 60% 60% 60%30955.1% 2012 2012 2013 2014 2011 2012 201 70% 60% 70% 60%2011 60% 404 60%2011 50% 60%2011 55.1% 50% 40% 50% 50% Loaders 70% 70% 70% 60% 60% 13 2014 Crawler 2011 2012 2013 13 2014 2011 2012 2011 201 70% 50% 50% 60% 4 50% 170 60% 60% 60% 50% 60% 14 2013 42014 670% 27 40 11 201310 132014 50% 50% 50% 50%2011 50% 19 50%2011 40% 9 50%2011 2012 2013 2014 2011 2012 201 2012 55.1% 2011 55.1% 2011 60%2011 201220112012 201320122013 201420132014 2011 2012 20 2011 2012 2012 2013 2013 2014 2014 2014 132014 2014 2011 2012 2013 2014 2011 201 60% 60% 60% 60% 50% 50% 50% 50% 50% 50% 40% 50% 60% 50% 60% Excavators Crawler, Hydraulic 966 2014 799 201450320142011 671 2011 987 2012 938 1,00920132012 839 745 9262014 606 2011 2013 20142013 2011 9,809 2011 2012 20 2011 -2012 2012 2013 2013 820 2014 132014 2014 2011 2012 2013 20112012 201 50% 50% 50% 50% 50% 50% 40% 50% 60% 60% 60% 60% 60% 2011 2012 2013 2011 201420132014 2012 2013 2013 40 132014 2014 2012 2013 9 2014 192014 20112012 3220132012 2014 2011 201 2011 2012 20 50%201180% Excavators - 2011 Wheeled, Hydraulic 37 2014 24 2012 26 28 32 20 16 303 50% 50% 2050%2011 50% 80% 80% 40% 50% 2012 2014 201150% 2012 2013 2013 2014 2014 2011 2012 2013 2011 2012 2011 2012 2013 2014 2014 2011 20 70% 80% 70% 80% 70% 13 2014 2011 2012 2013 2014 2011 2012 2013 2014 2011 201 80% 80% 80% 72.8% 50% 50% Mini Excavators 996 1,039 47550% 73150%1,137 1,226 1,246 1,090 976 974 1,071 50%70372.8% 11,664 2014 2012 2013 2013 2014 2014 2012 2013 70%201180% 2012 2013 2014 2014 2012 20 70%2011 72.8% 80%2011 80%2011 2012 70%2011 80% 80% 72.8% 70% 70% 70% 71.5% 71.5% 100 112 -4.0% 83-1.6% 9680% 13469.5% 107 - SCISSOR 134 125 89LOADERS 114 71 1,263 70% Graders 80% 80% 80% 80% GENERATORS 0.4% 71.5% − 70% Motor 70% 9872.8% AWP LIFTS GENERATORS − 0.4% − 72.8% − WHEEL − 0.7% EXCAVATORS 60% 70% 70% 70% 70% 60% 70% 60% 71.5% 71.5% 71.5% 70% 80% 70% Scrapers 72.8% -80% Conventional 6 3 880% 369.5% 13 1 8 14 5 10 70% 88 80% 60% 70% 16 70% 71.5% 70% 70% 60% 70% 60% 172.8% 80% 71.5% 71.5% 60% 60% 60% 55.1% 69.5% 55.1% 80% 70% 60% 70%1,112 1,127 70% 70% 70% 70% 70% 60% Skid-Steer 71.5% 71.5% 60% 71.5% 72.8% Loaders 1,636 1,127 73070% 88480% 1,087 792 736 996 1,174 1,32072.8% 12,721 50% 60% 60% 60% 60% 50% 60% 50% 55.1% 69.5% 55.1% 60% 70% 60% 70% 60% 70% 70% 70% 50% 60% 60% 71.5% 71.5% 60% 50% Tractor Loader 50%290 71.5% 448 55.1% 418 437 55.1% 24860% 41369.5% 401 60% 390 401 461 333 372 4,612 50% Backhoes 50% 50% 13 2014 2011 2012 2013 2014 2011 2012 2013 2014 2011 201 60% 70% 50% 60% 60% 60% 60% 60% 70% 60% 50% 60% 50% 55.1% 40% 50% 50% 50% 50% 55.1% 40% Wheel Loaders < 80 HP 50% 105 40% 94 131 135 70 108 109 96 103 94 85 129 1,259 2011 2012 2012 2013 2013 2014 2014 2014 2011 2012 2013 2014 132014 2014 2011 2012 2013 2011 2012 2013 2014 2011 201 60% 2011 50% 2011 2012 2013 2014 2011 2012 20 50% 60% 50% 40% 50% 50% 50% 50% 40% 50% 40% 60% 60% 60% 55.1% 2011 2012 2013 2011 2013 558 2014 132014 2014 2011 2012 2013 55.1% 2011201279020132012 2011 201 2011 2011 20142013 2011 2012 20 Wheel > 802012 HP 2013 867 2014 565 2014 3762014 51060% 661 595 630 8172014 567 7,610 40% Loaders 50% 674 2012 50% 50% 50% 80% 80% 50% 40% 50% 40% 50% 60% 50% 2012 2013 2013 2014 2014 2014 132014 2014 2011 2012 2013 2014 2011 201 2011 40%201180% 2012 2011 50%2011 201220112012 201320122013 201420132014 2011 2012 20 80% 40% Grand2011 Total 5,738 4,663 2014 2,80350% 3,927 5,149 5,209 5,443 4,566 4,180 4,400 5,290 40% 4,077 55,445 50% 50% 50% 2014 2012 2013 2013 2014 2011 2012 71.1% 2011 80% 2012 2011 80% 2012 201320122013 201420132014 2011 2012 20 80% 13 2014 2011 2012 2013 2014 2011 2014 201 80%2011 80% 80% 80% 40% 50% 70% 70% by EDA, Charlotte, N.C. 40% Supplied 50% 40% 71.1% 2014 2012 2013 2013 2014 2014 2011 2012 2013 2014 80% 80% 2012 72.8% 2012 2011 2012 2013 2014 2011 20 80%2011 80%201180% 80% 80% 72.8% 70% 70% 71.1% 80% 80% 80% 72.8% 80% 80% 80% 80% 70% 70% 70% 22 | www.cedmag.com | Construction Equipment Distribution | March 2015 70% 72.8% 71.1% 70% 70% 70% 80% 60% WHEEL LOADERS − 60% 69.5% 72.8% 80% 80% 80% % 0.7% 70% 70% 70% 70% 69.5% 69.5% 72.8% 80% -1.6% WHEEL LOADERS EXCAVATORS − 70% 70% 70% . r o u 60% seanalytics.com 60% 71.1% 69.5% w w w 69.5% 72.8% 80% 80% 70% 70% 69.5% 72.8% 80% 80% 80% 70% 70% 70% 70% 70% 60% 60% 60% 60% 69.5% 69.5% 50% 50% 60% 60% 60% 70% 69.5% 72.8% 70% 70% 70% 70% 2011 2012 2013 2011 201 60% 60% 60% 60% 72.8% 2014 69.5% 69.5% 50% 50% 60% 60% 60% 69.5% 70% 70% 2011 2012 2013 2014 201 22_Data_Trends_KP.indd 22 3/9/152011 12:05 PM 60% 60% 50% 50% 50% 50% 70% 70% 70% 60% 60% 60% 60% 60% 69.5% 69.5% 50% 50% 50% 2014 2011 2011 2012 2012 2013 2013 2014 2014 2011 2012 2013 2014 201 69.5% 50% 50% 50% 50%2011 2011 60% 2012 2013 2014 2011 60% 2012 2013 2014 2011 2012 20
>> DATA TRENDS ROUSE ANALYTICS
January Dodge MomentumIndex Falls 4.8 Percent in Physical Utilization
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
7
>> MONEY$$$MAN
GARRY BARTECKI
Rental: Friend or Foe? Value to the customer on the one hand, versus time and effort till you realize true RTR profitability
A What we do know is that rental is projected to increase by 34 percent between now and the end of 2018.
s part of my regular routine I try to keep up with what is going on in the rental world, and I have to say there is always a lot going on in the rental industry. I have studied rental and leasing during my entire career, going on 35-plus years. In fact, my first assignment as a new CPA working for an accounting firm was the auditor of the Clark Equipment dealership in the Chicago area. These were lift truck dealers that offered their customers the use of the lift trucks through both short-term and longterm rentals, primarily using a 60-month agreement with a maintenance contract attached. After working at these dealerships I was hooked on the benefits I saw from this approach of providing equipment utility value to customers. So I guess it is no surprise that I concentrate my efforts assisting lift-truck dealers, construction equipment dealers and, more recently, equipment rental companies. What’s interesting is the convergence taking place between the three industries. For example, if you were to review the latest United Rentals report to investors you might be surprised that about 50 percent of their business is categorized as “Industrial.” Another example might be what happened at the rental company where I spend a fair amount of time: A new customer walked in the door and wanted us to maintain and repair his lift-truck f leet. And I guess you could add a few examples yourself to this analysis. Where, my friend, does that leave you? Do you or do you not embrace the rentto-rent (RTR) business? What we do know is that rental is projected to increase by 34 percent between now and the end of 2018. We also know that the Rental Penetration Index (RPI) is climbing out of the 50 percent
range and pushing for 60 percent. (I will let you figure out how the RPI works). Both percentages represent staggering statistics needing a lot of thought and a plan of how to deal with rental in general. You may have heard me mention before that 90-plus percent of contractors who order rental equipment do not specify a brand. This alone sets the stage for every OEM and dealer out there to take steps to protect their market share, brand loyalty and dealer loyalty. Now, let’s get back to whether rental is your friend or foe. Believe me, it has the potential to be either. We are talking RTR and not RTS. Two very different animals. RTR requires a total understanding of the business in terms of operations, financing and cash flow. Utilization standards, both Time and Dollar have to be met to become profitable and sustain profitability and positive cash flow. When I say total understanding I mean from the CEO on down. There is a set of rental metrics used by the public rental companies that have to be understood and used by every person involved in the management of the RTR operation. There are both good reasons to dive into rental, as well as some other reasons to maybe avoid it at this time. For example, rental takes some time to add value to the dealership, and if you plan on exiting the business any time soon you may want to avoid getting into RTR. If RTR is not for you then I suggest you stay close to your customers through exceptional product support services and use Rent-to Sell (RTS) to get equipment into the field, which you are probably doing already. RTR, properly managed, can add value to the dealership. Mismanaged, however, it can lead to a really scary outcome. 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. March 2015 | Construction Equipment Distribution | www.cedmag.com | 23
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>> READY TO ORDER
Kubota Enters Skid Steer Market with SSV-Series
64- and 74-hp models to arrive at dealerships in June. Kubota Tractor Corporation unveiled its new SSV-Series skidsteer loaders designed to meet the needs of customers in the construction, rental and agriculture segments. The SSV-Series includes the 64 gross horsepower SSV65 and the 74 gross horsepower SSV75, both available at Kubota dealerships starting this June. With this introduction, Kubota now offers a full line of compact construction equipment. Both SSV models feature a unique, slide-up, front-entry door that rises overhead, instead of swinging out. This design allows the door to be opened regardless of loader position so that the operator can enter and exit the machine even when the skid steer is in a tight or difficult position. Other standard features include a spacious, dust-resistant pressurized cabin with an optimized climate control system, and a side light that allows for better visibility and safer operation at night. In addition, an optional multi-function lever feature is available, allowing for fingertip control of major machine and implement functions. Liebherr The SSV-Series is powered by an EPA Tier-4 certified four-cylinder Kubota diesel engine. Construction With standard two-speed travel and optional high-flow hydraulics, Kubotaâ&#x20AC;&#x2122;s vertical lift geometry skid steers will meet the needs of Kubota customers across the construction, Equipment Co. rental and agriculture segments. The SSV65 boasts a rated operating capacity of 1,950 Introduces the pounds and bucket breakout force of 4,839 pounds; the SSV75 has a rated operating capacity of 2,690 pounds and bucket breakout force of 5,884 pounds. The loaders L538 Wheel loader on the SSV-Series are easily capable of dumping into a dump truck with 10-foot sides. The SSV65 and SSV75 feature hand-and-foot controls, and pilot control models are expected to join the lineup next year. For more information visit www.kubota.com
Cummins Gas Generator is Mobile Off-Highway Certified Cummins Power Generation has extended its range of gas fueled generator set capabilities with a natural gas version that boasts U.S. EPA Mobile Off-Highway (MOH) emissions certification. The introduction of the MOH-certified model means that the 334 kWe continuous rated generator set is now deployable across a wider variety of applications. The EPA MOH emissions certification allows the lean-burn gas QSK19 60 Hz generator set running within the certified range of fuels to be redeployed within 12 months of being installed at a site. This offers particular benefits to industries with a requirement
for short-term power including companies in the oil and gas sector. EPA MOH certification also represents a crucial advantage to rental fleet operators, who frequently need to deploy generators fortemporary power. The Cummins QSK19 based generator set family is equipped for low-maintenance operation on-grid as well as base load applications. Generator sets that run on natural gas offer a significant advantage in that the gas they utilize can be supplied continuously even when other infrastructure, such as roads, are out of service. For more information visit power.cummins.com
The L 538 features a Z-bar linkage for standard operations, achieves a tipping load straight of 22,485 pounds at an operating weight of 29,000 pounds and is driven by a 154HP engine. This loader is equipped with a 3.53 cubic yard quick hitch re-handling bucket with bolt on cutting edge. The L538 wheel loader belongs to the new generation of mid-size range loaders, highly versatile machines suitable for a multitude of applications. The implementation of energy efficiency technologies such as the hydrostatic drive combined with the Liebherr Power Efficiency system (LPE), optimizes the interaction between drive components. This system is able to adjust the performance and power for every working situation, enhancing the efficiency of the wheel loader and providing additional fuel savings up to 25 percent. The configuration of the machine and the positioning of its engine also contribute to fuel economy. The engine is used as natural counterweight. The center point of gravity of the drive line components is behind the rear axle to avoid unnecessary additional counterweight. For more info visit www.liebherr.us.com
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>> READY TO ORDER IMT Expands Its Lineup of Hydraulic Loaders Iowa Mold Tooling Co. Inc. recently announced the addition of the IMT 28562 hydraulic loader to its lineup of hydraulic loaders. The IMT 28562 hydraulic loader features the highest rating in the IMT lineup at 161,490 foot-pounds. It has a maximum lift capacity of 5,700 pounds, up to 62 feet 3 inches of horizontal reach and a maximum vertical reach of 71 feet 4 inches. The loader is capable of lifting 2,400 pounds at its maximum horizontal reach. A 22-foot hydraulic out-and-down stabilizer span provides customers with excellent stability for loading and unloading palletized goods, while a high lift-to-weight ratio allows for maximum payload on the truck. The IMT 28562 loader includes a standard RCL (rated capacity limiter) 5300 system, which blocks load-increasing functions when full capacity is reached. The loader’s standard radio remote control comes equipped with an information center that provides continuous feedback on load moment and operation conditions. The complete lineup of IMT hydraulic loaders also includes the 16000 and 24562 models. The IMT 16000 loader features a maximum capacity of 5,825 pounds, up to 42 feet of horizontal reach and a maximum vertical reach of 54 feet 1 inch. The IMT 24562 loader features a maximum lift capacity of 5,000 pounds, up to 62 feet 3 inches of horizontal reach and a maximum vertical reach of 71 feet 4 inches. For more information visit www.imt.com
Atlas Copco’s Tier-4 Final QAS 25 Generator One of Atlas Copco’s latest additions to its generator lineup, the compact QAS 25, is equipped with an Isuzu 4LE engine and a Diesel Oxidation Catalyst (DOC) to achieve Tier-4 Final emission levels. The generator is ideal for heavy-duty use in several industries, including rental, oil and gas and construction. It is also an exceptional option for powering events. It can be used for prime or standby power and is designed to withstand the rigor of demanding use in the field. According to the company, the QAS 25’s overall durability as well as the quality and dependability of its interior components give it one of the highest resale values in the industry. The QAS 25 is mounted on a durable frame and surrounded by a robust enclosure formed from galvanneal steel and powder coated for a longlasting, scratch- and corrosion-resistant surface. The unit comes standard with two-wire remote start capability and features a 72-gallon fuel tank for a 45-hour run time. According to the company, this is nearly twice the run time of some competitive models. The QAS 25 enclosure is sound attenuated and has a vertical radiator and exhaust discharge to ensure low dBA levels for use on noise-sensitive jobsites, residential areas or at events. For more information visit www.atlastcopco.com.us continued on page 55)
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>> PRODUCT SUPPORT
BRUCE BUNTING
Battle for the Truck Factory-authorized CE dealers face tightening global competition for new service trucks, while simultaneously defending their turf from independent shops that want a piece of the field service action.
W
elcome to the new norm!” That’s a short but spot-on statement made to me by a very intelligent fleet manager in 2014. He was commenting on the challenges we face with regards to purchasing and operating his fleet of field service trucks. Today, we are no longer isolated from the direct effects of an everchanging global economy that has and will continue to change overnight. Here are some facts that every dealer should be taking note of: 1.) The available supply of new chassis rolling off the assembly lines is dwindling, from Class III through VII. Truck manufacturers have adjusted their assembly lines and are not able to keep pace with the current demand for new trucks – and there are no indications on the horizon of this situation easing. So, if we continue to see a positive increase in the rate of growth of the economy, even if it is a modest increase, the short supply situation of truck chassis will continue to tighten more than what we are seeing today. 2.) We now have a global market demanding North American-built trucks and they are willing to pay a higher price to acquire them. The emerging markets that once relied upon simple manpower and the crudest of machines for their construction needs have now begun to purchase modern heavy equipment, and they want everything that goes with it. This includes field service vehicles. The result
is that better planning is required to avoid being caught off guard by the everincreasing chassis lead times. 3.) We have all seen and felt firsthand how the federally mandated emissions regulations have impacted your service trucks – fuel mileage numbers have been so bad people just shake their heads and refuse to even discuss it. The other shoe that continues to drop is the massive amount of downtime that trucks built with EGR-based systems have experienced. As a result, many fleets have been compelled to simply replace trucks that had as little as 18 to 24 months of usage in order to get the service levels back up. In order for you to continue to grow your field service business, the way you plan to purchase field service trucks must evolve. Take a look at the timing of your purchase orders of trucks. Consider purchasing in the middle of the calendar year versus the end of the year when most fleets release orders for trucks. An Extension of Your Brand
In spite of the challenges we face, your field service trucks provide the most visible representation of your brand with the exception of the equipment that you sell. So, even in times of uncertainty you have to continue to project confidence through the power of your brand, and field service trucks are perfect for the job. Ensuring that your field service trucks are an accurate representation
is more important than ever. Since the downturn in the economy, your independent and or “will fit” type of non-factory-authorized competitors have been stepping up their sales and marketing efforts more than ever. Some are adding field service to their list of capabilities and we’re seeing approaches like, “As good as XYZ Dealer” or “Try us, we are cheaper.” There has always been this type of competition, but here’s the interesting dynamic: The “will fit” crowd has seized on the economic events of 2009 and 2010 as an opportunity to take away parts and service business from the OEM-authorized heavy equipment and ag dealers.
“...If we continue see a positive increase in the rate of growth of the economy...the short supply situation of truck chassis will continue to tighten more than what we are seeing today.“ The job of managing your fleet of field vehicles is on the verge of becoming a full-time position unto itself, given the changing global demand and current economic conditions. Remember to build in lots of lead time for new service truck purchases, and be mindful of who and what is projecting your image every day on the road. n
BRUCE BUNTING is an industrial products specialist with The Knapheide Manufacturing Company. He has been helping customers keep their equipment running in the field for over 20 years with timely advice to make operations more efficient and productive. Contact him at bbunting@knapheide.com. 26 | www.cedmag.com | Construction Equipment Distribution | March 2015
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Could your company be more productive, more profitable?
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>> MANUFACTURER SPOTLIGHT
JOANNE COSTIN
Attitude Is Everything With Liebherr Job. No.1 for new President Peter Mayr has been acquiring dealers with the right attitude.
W
ith more than 30,000 employees, Liebherr isn’t the first company that comes to mind when you think of a familyowned business. But according to Peter Mayr, who took over as president of Liebherr Construction Equipment Co. Noth America 15 months ago, family values remain at the core of this 100 percent family-owned business. Independence in decision-making is at the top of the company’s list of core values. And despite its size, the structure of Liebherr Group is decentralized with smaller company units operating independently. Mayr, who is responsible for earthmoving and material handling equipment in the U.S., finds that working for a family-run business suits him. “At Liebherr, you have the flexibility and space to make your decisions,” he said. “They support us really well and give us all the backing we need.” Prior to taking on his current role, Mayr served as managing director for Liebherr-Great Britain Ltd. and Liebherr Rental Ltd. Organized into 11 product divisions that cover a wide range of products, Liebherr has its roots in construction. While managing his parents’ building firm in South Germany, Hans Liebherr developed the first mobile tower crane in 1949. Today, second and third generation Liebherrs are still actively involved in the business. Other construction-related divisions include Mobile Cranes, Tower Cranes, Concrete Technology, and Mining. A decentralized structure is designed to
ensure the company is in close proximity to customers and has the ability to respond to market needs. Management for individual product segments is in the hands of divisional control companies, which, for earthmoving and material handling, is LiebherrEMtec GmbH based in Kirchdorf an der Iller (Germany). Mayr is based out of Liebherr’s U.S. location in Newport News, Va. Job No. 1: Distribution
Distribution has been the biggest challenge for Liebherr in the U.S., a market they entered in 1970. But Mayr highlights the expansion of the dealer network among his first year successes. To broaden its product range offerings to dealers, Liebherr first dismantled a previous agreement that gave Republic Crane national distribution rights for the material-handling equipment used in scrap recycling. That was accomplished in January 2014. The move enabled Leibherr to directly distribute both the earthmoving and materialhandling equipment product lines. From there, Mayr sought to strengthen distribution, extending its footprint beyond a predominantly eastern U.S. territory. In the process, some existing dealership agreements were terminated while others were added. Tracey Road Equipment, Bejac Corp., Hoffman Equipment, Nueces Power Equipment joined the dealer network. Others such as American State Equipment (Finkbinder), Groff Tractor & Equipment, Lorusso Heavy Equipment and RECO Equipment expanded their territories.
Mayr says the company is well ahead of its targets for distribution. “By the end of 2015, coverage in the U.S. will be 90 percent.”
Quality; independence; innovation; being a trustworthy partner; recognizing that employees are a key in success; accepting responsibility – these are the Liebherr values that are the foundation of the family-owned business. Job No. 2: Improving Product Support
In advance of expanding its dealers, Liebherr also restructured its product support to improve the parts supply. Dealers are now on a centralized system that connects them with a new state-of-the-art logistics center in Germany and two parts warehouses in the U.S. Additionally, the Liebherr Group has made significant investment in building improvements, machinery, tools and infrastructure to expand the factory and enhance the warehouse facility, which is located near the eastern seaboard of Virginia. This location also serves as the headquarters and central warehouse for the Liebherr Mining Division and for four other operating Liebherr companies, including Liebherr Construction Equipment Company.
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Peter Mayr
Dealers interested in pursuing an opportunity with Liebherr should contact Tim Doucette, general manager, Brand Strategy at 757-245-5251.
A new distribution center scheduled to open this quarter in Visalia, Calif., will support Western dealers by providing additional parts inventory and reducing transit times for parts. “We have also increased customerfacing staff,” added Mayr. Six regional managers (an increase of three) are in the field, looking after dealers and recruiting new ones. The Line
According to Mayr, the new dealers are a diverse mix, with some representing short lines such as LBX excavators and Kawasaki; others represent more specialized equipment. Liebherr’s current product line includes wheel excavators, crawler excavators, crawler dozers, crawler loaders, specialized hi-reach machines, articulated dump trucks and scrap handling excavators on the material handling side. Known for their mid-size to large equipment, scrap metal, waste, landfill and demolition are industries where Liebherr believes it’s strong. “I think the dealers Liebherr Product Line
are most excited getting a full line of equipment from a high quality manufacturer,” added Mayr. He hasn’t ruled out expanding the product line to smaller equipment. “If we need the smaller machines to package the machines together, we will look into that,” he said. “We want to participate.” Liebherr’s telematics solution is LIEDAT, which is offered free for the first year, and free for additional years if an extended warranty is purchased. “With LIEDAT we can prove we have the most fuel-efficient system,” said Mayr. He expects it to be an important tool that will help customers more proactively maintain their machines, as well as provide dealers with data to support a purchase.
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11
11-28 tonnes
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2
30 and 40 tonnes
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Dealers With the Right Attitude
Commenting on their search for dealers, Mayr was clear that they have wanted dealers who are willing to invest in rental. But it’s not so much about the size of the dealer or the sales staff. “Most important is the attitude,” he explained. “The dealer needs to fit with the Liebherr core values.” Quality; independence; innovation; being a trustworthy partner; recognizing that employees are a key in success; accepting responsibility – these are the Liebherr values that are the foundation of the family-owned business. “All those qualities, we want to see reflected in the dealer.” Without the pressure of meeting shareholder expectations, Liebherr concentrates on nurturing long-term relationships with both dealers and customers. “Some manufacturers are coming and going. Dealers get machines and manufacturers then decide to pull out of the U.S.,” said Mayr. “You know that we will be here for now and the future.” Listening to Dealers
Working with dealers and customers to find solutions is one of the things (continued on next page)
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>> MANUFACTURER SPOTLIGHT
IN THE MIND OF MAYR What do dealers need to succeed? He says:
(“Attitude Is Everything With Liebherr” continued from page 31)
Mayr likes most about his job. He values communication with dealers to learn what is needed to compete in the U.S. marketplace. “We are not here to tell the dealers how to do business,” he said. “We need to listen to people and take it seriously. They know most of what they need – the specs, price and options to sell the machines. While you don’t want to change price, it is something we may have to consider.” In November the company will hold a dealer sales training event. Participation at several scrap handling trade shows as well as World of Concrete and Intermat will be key to promoting Liebherr’s presence among equipment end-users in 2015. In addition, advertising will be increased. In 2015, the market for construction equipment is expected to be up 10 percent, but Mayr wants more. “Our target is 25 percent,” he said. That’s a tall order – but with Mayr and their dealers living and loving the core values of Liebherr, who’s to say what’s possible. n
I think you need a clear vision of what you want to achieve. Be flexible. Live the family values of Liebherr. Be satisfied only when the customer is satisfied. Be very motivated.
Peter Mayr, president, Liebherr Construction Equipment Co., has been on the job 15 months and with the company 14 years.
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.
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>> WORKFORCE CRISIS
MIKE ROWE
Why ‘Work Smart, Not Hard’ is the Worst Advice in the World This article originally ran in the August 2013 issue of Popular Mechanics. CED urges you to circulate it to every local middle school, high school and college you can think of. Editor’s preface
Work smarter, not harder? Don’t tell Mike Rowe, who has met some of the hardest-working people in America. In fact, he argues that mantra is the opposite of the attitude we need to beat this lousy economy. Here is what Mike has to say about the advice he received from his high school guidance counselor, Mr. Dunbar.
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hen I was 17, my high school guidance counselor tried to talk me into going on to earn a four-year degree. I had nothing against college, but the universities that Mr. Dunbar recommended were expensive, and I had no idea what I wanted to study. I thought a community college made more sense, but Mr. Dunbar said a two-year school was “beneath my potential.” He pointed to a poster hanging behind his desk: On one side of the poster was a beaten-down, depressedlooking blue-collar worker; on the
other side was an optimistic college graduate with his eyes on the horizon. Underneath, the text read: “Work Smart NOT Hard.” “Mike, look at these two guys,” Mr. Dunbar said. “Which one do you want to be?” I had to read the caption twice. Work Smart NOT Hard? Back then, universities were promoting themselves aggressively, and propaganda like this was all over the place. Did it work? Well, it worked for colleges, that’s for sure. Enrollments soared. But at the same time, trade schools faltered. Vocational classes began to vanish from high schools. Apprenticeship programs and community colleges became examples of “alternative education,” vocational consolation prizes for those who weren’t “college material.” Today, student loans eclipse $1 trillion. There’s high unemployment among recent college graduates, and most graduates with jobs are not even working in their field of study. And we have a skills gap. At last count, 3 million jobs are currently available that either no one can do, or no one seems to want. How crazy is that? I think often about the people I met on Dirty Jobs.
Most of them were tradesmen. Many were entrepreneurs and innovators. Some were millionaires. People are always surprised to hear that, because we no longer equate dirt with success.
A heavy-equipment technician with real-world experience can earn upward of six figures...But still the positions go unfilled?... What’s going on? But we should. I remember Bob Combs, a modest pig farmer who fabricated from scratch a massive contraption in his backyard that changed the face of modern recycling in Las Vegas by using the casino food-waste stream to feed his animals. He was offered $75 million for his operation and turned it down. He’s a tradesman. Then there was Matt Freund, a dairy farmer in Connecticut who thought his cows’ manure might be more valuable than their milk, and who built an ingenious machine that makes biodegradable flowerpots out of cow crap. He now sells millions of CowPots all over the world. He’s a tradesman. Mostly, I remember hundreds of men and women who loved their jobs and worked their butts off: welders, mechanics, electricians, plumbers. I’ve met them in every state, and seen firsthand a pride of workmanship that simply doesn’t exist in most “cleaner”
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industries. And I’ve wondered, why aren’t they on a poster? Why aren’t we encouraging the benefits of working smart AND hard? The skills gap is bad news for the economy, but it also presents an opportunity. Recently, I ran into a woman named MaryKaye Cashman, who runs a Caterpillar dealership in Las Vegas, and she told me they had more than 20 openings for heavyequipment technicians. That’s kind of astonishing. A heavy-equipment technician with real-world experience can earn upward of six figures. And the training program is free! But still the positions go unfilled? In a state with 9.6 percent unemployment? What’s going on? Here’s a theory: What if “Work
Smart NOT Hard” is not just a platitude on a poster? What if it’s something we actually believe? I know it’s a cliché, but clichés are repeated every day by millions of people. Is it possible that a whole generation has taken the worst advice in the world? Look again at the [words] on the poster, which I reproduced just the way I remember it. Those stereotypes are still with us. We’re still lending billions of dollars we don’t have to kids who can’t pay it back in order to educate them for jobs that no longer exist. We still have 3 million jobs we can’t fill. Maybe it’s the legacy of a society that would rather work smart than hard. I [recently] launched an online campaign called Lessons From the Dirt. It’s a modest attempt to get
people talking about the skilled trades in a more balanced way. If you’re not opposed to a little tasteful vandalism, check out my updated version of Mr. Dunbar’s poster on lessonsfromthedirt. com. The image might amuse you, but the caption is no joke – Work Smart AND Hard. I don’t know if changing one little word in one stupid slogan will reinvigorate the skilled trades. I just think it’s time for a new cliché. My own trade – such as it is – started with an “alternative education,” purchased for a reasonable price at a two-year school. I suspect a lot of others could benefit from a similar road. So get a poster and hang it high. And if you see Mr. Dunbar, tell him I turned out okay. n
MIKE ROWE is the former host of the TV show “Dirty Jobs,” and is a celebrity advocate for the skilled trades. The mikeroweWORKS Foundation has awarded tools scholarships to the top two equipment technology students at a number of AED’s Accredited schools. Please visit profoundlydisconnected.com. March 2015 | Construction Equipment Distribution | www.cedmag.com | 35
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>> BUSINESS SUCCESSION
MIKE FROMMELT
The Three Attributes of Your Successful Successor Whether evaluating internal or external candidates, measure the next owner of your business by his core values, grasp of strategic thinking, as well as her approach to accountability and communication.
F
or many business owners and CEOs, choosing a successor is the single most difficult decision they will make in their careers. In my experience of working with privately held businesses over the last 20 years, when a hiring mistake has been made at the top, it’s not typically because the “skill sets” were wrong. It’s much more often one of the following:
business. As you added employees and other leaders in the business, you expected them to follow these same principles, and rewarded or punished their behaviors accordingly. Over time, this created your company culture. If you were to ask your customers, employees, vendors and other stakeholders to describe your company, you would likely hear similar themes reflecting these core values. You have 1. Shared Core Values/Cultural Fit a distinct identity and a way of doing While you may not even realize it, one things even others can see and feel. of the key reasons for your growth and If a potential successor does not success are the core values and culture share your core values or doesn’t you have instilled in the company. believe in your way of doing business, As you grew the business, you lived they simply should not be considered by at least a few key principles (core to lead the company. I’m not suggesting values). This may be your reputation that nothing should ever change or that for outstanding customer service, your anyone who will make changes is not sense of urgency, your commitment a candidate. Strategies, direction and to on-time delivery and/or a myriad structure need to change with market of other behaviors that define your demands. But, by definition, core values are just that – core. Don’t change the tenets of what brought you this far! When you begin thinking about succession, it is critical to conduct an in-depth evaluation of your core values. Really ask yourself, what are the most critical principles of how we do business? What things should never change, and what other things Ask yourself, how well does my successor communicate with could be changed the whole team, and can (s)he inspire everyone to keep pulling without compromising in the same direction?
our value system? There are a number of ways to begin evaluating your core values, including a free, no-strings worksheet tool you can download from our website keystonesearch.com/get-theassessment.html
When everything is someone else’s fault, silos are created and ultimately a culture of fear takes over. Employees spend more time defending turf and playing CYA than producing. Once you have honed your core values, evaluating potential successors against them is not overly difficult. For internal candidates, simply begin observing their behaviors through the values lens. Do they behave consistently with our values, or is something in opposition? Be honest with yourself; do they really fit or not? Also, don’t fool yourself into believing you can “teach” core values. If something is truly a value, it is so deep seated it is not going to change. If evaluating external candidates, building interview questions around your core values is critical. When interviewing, listen not just for the behaviors but what is driving those behaviors. Who is this person and how do they make decisions and generally conduct business? The great thing about interviewing for values is everyone believes their own core values
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>> BUSINESS SUCCESSION
are good. Once you hit the values level, they will talk for days. Just make sure you’re really listening. 2. Cross Functional/Strategic Ability
If you think for a few minutes about people who have worked for you or with you, you’ll realize that nearly everyone looks at work/business through their primary functional lens. We even describe people this way; “He’s the ultimate sales guy;” “She’s a typical accountant;” or “He’s an engineer’s engineer.” It’s simply human nature to look at things through our own experiences and what we know best. However,
those with the ability to take a company to the next level are able to put aside their own lens and see things in a systemic fashion. They truly understand how all the functional areas of a business interact with one another. You could say they understand the overall “business model.” I’ve conducted nearly 10,000 interviews in my career and I’ve come to believe this ability is both rare and somewhat innate. It’s simply a different way of looking at the world, and a few people are capable, while most others are not. If you have been successfully growing and scaling your business, you likely have this ability to think (and act) cross-functionally. You naturally think about the company as a whole system and can predict how any change made in one part of the company will affect all the others. Think critically about each member of your leadership team today. Do they think systemically or do they look at the business exclusively through their own lens? Are they purely a finance person, a sales person, an engineer, or are they a strategic business person? Testing for this ability is critical when looking at potential successors. With internals, providing assignments outside of their normal area of expertise works well. If they can move to other areas (at a leadership level) and still be effective, they likely have
the ability to think systemically and strategically. Monitor their effectiveness in these assignments and discuss their experiences with them often. Are they really seeing the whole picture? Are they driving change or improvement in the new area? Can they earn respect from the new team without having their “technical” knowledge to rely on? With outsiders, dedicate a good chunk of your interviews to the “how” and “why” questions. “I can see your previous company grew from $20M-$50M while you were VP of Sales; how exactly did this happen?” Or, “I see you implemented a $10M upgrade in equipment; why was the company making this upgrade?” Can they explain the business reasons behind the initiatives? Were they part of the strategic planning process or simply carrying out someone else’s orders? 3. Accountability and Communications
In the early days, you were likely more hands-on. You took on anything and everything necessary to move the company forward. However, to take the next step, the company needs a different leadership style. For established companies, the most critical role of the CEO is not getting their hands dirty like you had to, but rather getting everyone pulling in the same direction and taking on more responsibility. When this is working well, it creates amazing momentum. If a CEO is an “excuse-maker” at their core, this forward momentum becomes (continued on next page)
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>> BUSINESS SUCCESSION (“The Three Attributes of Your Successful Successor” continued from page 37)
nearly impossible. When everything is someone else’s fault, silos are created and ultimately a culture of fear takes over. Employees spend more time defending turf and playing CYA than producing. The best leaders not only take accountability for their own actions, but also create a culture of accountability across the enterprise. Likewise, the CEOs who create the most accountable and productive cultures are communicators by nature. This does not mean they need to be inspiring public speakers, but they must communicate consistently with team members. Studies have shown the very best employees want three things from their leaders: (1.) to understand how we are doing as a business; (2.) to know where we are headed; and (3.) to know how they specifically play into that plan. CEOs who don’t communicate well or often enough simply cannot build and
maintain great teams. For internal successor candidates, this is again a matter of observation. Can they accept responsibility for their failures? Do they communicate clearly and do you see others engaging or moving away? For externals, interview questions regarding mistakes made in their careers are very telling. I’ve actually interviewed executives who cannot come up with even one mistake in their career! Obviously, this is a big red flag. Mistakes are often our biggest learning opportunities. If a candidate is working hard to hide their mistakes, be very leery. As I mentioned above, choosing your successor is a tough duty and there are many, many factors to consider along the way. However, in my experience this list should serve as a “first cut.” If a candidate merits a failing grade in any of these areas, making them CEO is extremely risky. n
MIKE FROMMELT is principal/co-founder of KeyStone Search. With more than 25 years of executive search experience, he has worked nearly exclusively since 2002 with privately held businesses including single/partner owned firms, ESOPs and family businesses. He can be reached at mikef@keystonesearch.com, or visit keystonesearch.com.
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>> DEALER IN THE TRENCHES
BRIAN M. FRALEY
Pile Drivers Shore Up New Jersey’s Superstorm Defense AED-member ECA clamps down on a Mother Nature defense, piles on the expertise with the right equipment and support.
T
he streets on the barrier island of Mantoloking, N.J., are alive with construction activity on an unseasonably warm day late fall of 2014. Heavy equipment is rolling and crawling. Hammers are pounding on lumber. Hard hats and safety vests dot the landscape. And the smell of asphalt and fresh lumber competes with the salty aroma of the ocean. Progress is underway, but it came at a price. The Borough of Mantoloking was among the areas hardest hit by Hurricane Sandy in October of 2012. The
powerful imagery was witnessed around the world as this post-tropical cyclone pounded the New Jersey coastline, leaving in its wake fatalities, stranded residents, mangled homes, crumbling infrastructure, and felled telephone poles. The ocean met the bay in up to five breach areas, forcing first responders to navigate the town in boats. To Protect Critical Infrastructure
As the 2014 hurricane season rolled in, a crew of workers from Springfield, N.J.-based EIC Associates was working feverishly to reduce, if not completely eliminate, the possibility that future superstorms would repeat history by installing just over three-and-a-half miles of steel sheet pile wall along the beach for the New Jersey Department of Environmental Protection’s (NJDEP) Bureau of Coastal Engineering. The keystone of the project was a pair of German-manufactured RTG Rammtechnik GmbH pile drivers rented from the Aldan, Pa., branch of Equipment Corporation of America (ECA). The scope of this $23.5-million project – part of a The RTG 21 T prepares to hoist a steel sheet pile prior to pile much larger beachfill driving. The narrow work space was positioned between the project by the United dunes and the ocean within close proximity to multi-millionStates Army Corps of dollar beachfront homes.
Engineers (USACE) – entails driving the sheet piles, and installing bent plate caps and geotextile anti-scour aprons. Project Manager Derek Serpe and Project Engineer John Caya are leading a gung-ho team that works as if driven by a higher purpose. EIC, specializing in heavy and marine construction projects in New Jersey and New York, is no stranger to working under pressure on high-profile projects. One of only two bidders on a project to construct visitor docks at the Statue of Liberty, they faced liquidated damages of $10,000 a day and delivered the project ahead of schedule and under budget.
“We’ve had instances where it’s the middle of the day on Saturday and something is broken,” EIC’s Serpe recalls. “We called [ECA’s] Chas and there was a mechanic out there on Sunday. By Monday at 7 a.m., we were back to work.” The objective of this indomitable wall of steel is to protect a $265-million investment by the New Jersey Department of Transportation (NJDOT) in the 12.5-mile reconstruction of Route 35, initiated 10 years ago to address pavement distress and drainage issues along this coastal emergency evacuation route. The project was accelerated when Hurricane Sandy demolished the infrastructure. The wall will also
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Operator Rich Kaminski uses high frequency vibration to drive a pile into the beach with the RTG 21 T. EIC’s Brett Rovani (left) guided the pile into place to ensure plumbness.
exist to protect Mantoloking’s residents, homes, and commercial buildings. Two Rigs with Custom Jaws
The equipment-intensive project hinges on two RTG pile drivers rented from ECA, a prominent distributor of specialized foundation construction machinery for heavy commercial, civil, mining, and marine construction projects with East Coast and Canadian locations and a legacy dating back nearly 100 years. The RG 19 T and RG 21 T pile drivers with telescopic leaders fueled EIC’s high level of production. Maintenance of the equipment, championed by ECA’s Sales Engineer Chas Raysik and a highly skilled service department, was also critical since downtime was unacceptable on this deadline-sensitive, momentum-driven operation. “We’ve had instances where it’s the middle of the day on Saturday and something is broken,” EIC’s Serpe recalls. “We called Chas and there was a mechanic out there on Sunday. By Monday at 7 a.m., we were back to work.” It’s apparent that this 10-year partnership remains intact based on personal service, where the head of ECA’s service department turns over a personal cell phone number to pile
driver operator Rich Kaminski. The thickness of the interlock between the cold rolled steel beams required the fabrication of customized jaws for the RTG pile drivers, according to Raysik. RTG fabricated and shipped six sets of jaws from Germany to keep the project on track. “I think the biggest obstacle we faced,” Serpe said, “were the large interlocks of these cold rolled sheets and the brittleness of sheets.” The interlocks of cold-rolled sheets are looser than those of hot-rolled steel. EIC needed a jaw design that would match the driving rate of hot-rolled piles, while reducing strain on the RTG pile drivers. The extra play in the interlock also required close attention so the caps would fit properly. Pile Driving Power
The sheer power of the RG 21 T pile driver can be felt as steel vibrates against steel high above. Sand particles rained down lightly and the beach flexes as the 45-foot-long steel pile seemed to slide into sand with the ease of a candle pushed into a birthday cake. Production Down to a Science
Watching the crew advancing methodically down the coastline defines the
old cliché “down to a science.” There is barely a moment of downtime between pile driving and hooking up the next pile. Four factors drive these five-man crews: the RG 19 T and RG 21 T pile drivers; a critical path schedule; reducing impact to the neighbors; and competition between crews. The presence of two crews created this friendly competition. As the RG 21 T team huddled for a quick lunch break, some friendly sparring ensued. “There is no competition,” said EIC’s Brett Rovani, a burly Local 454 Dockbuilder Foreman. Laughter ensues. “They can’t keep up with us.” It’s obvious he takes production seriously. “We’ve got it down to where we’re doing a sheet every six minutes,” he said proudly. He attributes a great deal to the RTG pile drivers, describing them as “well-built.” and “superior” to the competition. This $23.5-million project required $17 million in steel from Middletown, N.J.-based Skyline Steel, which mobilized a rotation of 15 truckloads from June 23 through Labor Day. “With this [RTG] equipment,” Serpe said, “I can drive the sheets as fast as we can get them on the job.” “Overall it’s been a great experience,” (continued on next page)
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>> DEALER IN THE TRENCHES (“Pile Drivers Shore Up New Jersey’s Superstorm Defense” continued from page 41)
he continued. “It’s much better than a traditional crane with a hammer.” From the clockwork-like handling of the sheets to the speed with which they enter the sand, it’s clear that the RTG pile drivers with high-frequency vibration enabled this level of production. Raysik chimes in, adding that a suspended hammer relies on the weight of the hammer, whereas high-frequency vibration capitalizes on both downward force and vibration. Keeping Piles Plumb
Himborg seems to know the operation as well as his machinery as he rattles off specs. He says the RTG pile drivers feature an Automatic Self Leveling function to ensure that sheets are plumb, which is mandatory on this project. “During the driving process, the mast is being monitored,” he explained. “When the mast goes a bit off of being plum, it automatically comes back.” A ground man with a hand level verifies plumbness as the pile vibrates into the sand. Steel I-beams pinned in the sand serve as falsework to ensure the plumbness of incoming piles. Serpe explains that keeping the sheets straight is critical to ensuring that the bent plate cap fits on top properly – and it’s a rare feat. “Most people that come out here and see a cold rolled sheet installed this straight want to go and shake the foreman’s hand,” he said. Tight Working Space
The worksite, framed by a towering dune and stockpiled steel sheets, is not much wider than a couple bowling alley lanes. Just above the dune, a curious neighbor watches the pile-driving operation from his deck as the RG 21 T vibrates a sheet into the sand. The vibration, powdery consistency of the sand, and gravity constantly work to level the material, further narrowing the channel. A small fleet of excavators and bulldozers worked ahead of the pile driving operation to maintain the right-of-way. “In this area, you can’t get any more of an easement or you’ll be in someone’s living room,” Serpe says with a laugh. The wall was designed to follow the easement between the shoreline and the dunes, while adhering to residential property line setbacks, and tying into the future beachfill project. This required close coordination with the USACE and the NJDEP. Working in the Sand
Working on the beach presents unusual challenges, including wear and tear on the equipment. While gravity returns much of the fine white sand to the beach, it sticks to lubricated areas such as joints and within the tracks of the pile drivers. The resulting friction can be damaging, according to ECA’s Raysik, who works to eliminate any downtime associated with the RTG pile drivers. The salty air can also increase
TIME OUT FOR A SHIPWRECK In early October, EIC attracted national media attention by unearthing a 19th Century shipwreck while driving piles with an RTG piling rig. A cease and desist order was issued to allow archaeologists and shipwreck historians to determine the identity of the old wooden vessel. At the time of this writing, it is believed this could be a Scottish ship known as the Ayrshire, which was carrying Irish and English immigrants to America. Two-hundred passengers were on the ship and all but one were rescued. The investigation and further excavation on this portion of the jobsite continued alongside of the construction. corrosion. Another challenge is the constant clogging of air filters by airborne sand, which reduces the performance of the equipment. EIC’s full-time maintenance crew fought this battle by blowing them out biweekly. Mobility was the next challenge since wheels and tracks slide in soft sand. EIC increased traction along the work corridor with a geotextile fabric base topped off with crushed stone. “It’s an incredible amount of effort just to get the steel where you need to install it,” says Serpe of the sandy site. He attributes much of the credit to EIC’s skilled operators. The steel sheets – 45 feet long by 4.9 foot wide – tip the scales at 7,000 pounds. Each pile was dragged by a bulldozer from a nearby staging area to its final destination. The geotechnical aspect of this project is intriguing for anyone who has tried to drive a beach umbrella into soft sand. The surface layer is fine beach sand, but below is a layer of black sand, clay, and an additional layer of fine sand. Himborg explains the science as the operation unfolds. “It’s all about friction,” he explained, indicating that the high water table is helpful. “When you come to a water-saturated area, it acts like a lubricant and facilitates the penetration process.” The steel sheets essentially displace the sand as they are driven. The RTG pile drivers feature an active push system, according to Himborg, which allows the machine to plow through dense materials such as clay. The sand on this project was obviously no match for the RTGs. While EIC occasionally encountered clay at the tip elevation, the pile drivers were met with little resistance. Drive time hovered between two and three minutes 95 percent of the time. He describes the situation as “putting the brakes on the hammer” when the sheet breaks through the clay below and needs to be stopped by the rig. Serpe indicates that the power of the RTGs was the defining factor in punching through the heavy layer of clay beneath the beach. When all is said and done, Mantoloking will return to the bucolic island atmosphere that residents have traditionally enjoyed. But it will be stronger. This wall of steel will be a distant memory, disguised by dunes. “You’re never going to see this wall,” said Serpe as waves crash gently nearby, “and it’s the last line of defense if, God forbid, the big storm ever comes again.” It seems like a small price to pay. n
BRIAN FRALEY is the principal of AEC Solutions, LLC. He can be reached at bmfraley@fraleysolutions.com, 610-906-7275. 42 | www.cedmag.com | Construction Equipment Distribution | March 2015
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>> GOOD COMPANY
Robert Burn et t
JOANNE COSTIN
More ‘Plumbing’ On Demand HKX’s pre-assembled hydraulic excavator kits and quick delivery make things easy for dealers.
T
oday, an increasing number of attachments require additional hydraulics, or “plumbing,” as many dealers call it. When a customer walks into a dealership and wants to buy a machine with that additional plumbing, they have a couple of options. Depending on the requirements for the attachment and host machine, the dealer can turn to their OEM or seek out an aftermarket alternative. HKX has built a business around making it very easy for dealers to choose their hydraulic kits for excavators, selling more than 30,000 kits to date. Robert Burnett, sales manager at HKX, offers this analogy: “If excavator kits were ice cream, OEM manufacturers might be offering chocolate, vanilla and strawberry. HKX offers 31 flavors.” He believes manufacturers really aren’t in the customization business. “At the end of the day, we can help manufacturers sell more iron.” The proliferation of hydraulic attachments in the market has expanded the use of excavators to
where they are far more than digging machines. Hydraulic breakers, sheers, hydraulic thumbs, mowers, and screening buckets are just part of an ever growing list of attachments that require additional “plumbing.” According to Burnett, with so many manufacturers and models, spec’ing the right components or kit is no easy task. HKX takes that off the dealer’s plate by calling customers to verify the application, carrier machine and types of tools that will be operated. Their kits simplify installation. After more than 20 years in the business, HKX has built an extensive database of machine and attachment information, which enables them to respond quickly to support issues. HKX was born out of attachment manufacturer MAN-ACS, which built hydraulic thumbs for backhoes and excavators in the ’90s. When the owner ran into some issues finding machines with the plumbing to support the attachments, he developed his own solution out of need. In 1995, HKX was incorporated and the company got out HXK BENEFITS of the attachments market to n Pre-assembled components for faster installation focus on hydraun Bolt-on designs for solid structure lic excavator kits n Plug-in electrical components ensure proper connectivity exclusively. The n Pre-formed, powder-coated tubes means no paint Seattle-based required and fit is guaranteed company has n The smartest packaging in the business for faster grown from five shipping and easy install to 50 employees n Most standard kits ship within two to four days since that time. n Turn-key installation locations across the U.S. and “We like Canada with flat-rate install pricing the versatility
with the HKX kit,” said Paul Walters, a sales representative for Roland Machinery, a Komatsu dealer headquartered in Springfield, Ill. “They get the model and make sure everything fits precisely.”
“‘The value we add is the time we save the distributor’....from when an order is placed and the dealer begins sourcing components, all the way to the install” Time-Saving Installation
HKX has the installation down to a science, reducing the time dealer technicians spend on installation. According to Burnett, HKX was the first in the industry to design bolt-on kits, and the only one to preassemble the kits. “Instead of sending a box of parts, we take major portions of the kit and pre-assemble them,” said Burnett. “The clamps are already on it. The arm assembly can be taken out of the box and mounted. The installer does final torqueing, typically completing the installation of a standard kit anywhere from six to 50 hours,” he added. With a shortage of technicians and technician time costing dealers from $100 to $130 an hour, HKX can make good financial sense for a dealer. “Time is so valuable and expensive,” said Burnett. “The value we add is the time we save the distributor.” This includes time from when an order is
44 | www.cedmag.com | Construction Equipment Distribution | March 2015
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t
placed and the dealer begins sourcing components, all the way to the install. Color-coded kits are designed so dealers can utilize a lower level tech for the install. Burnett believes HKX kits can be installed at a faster rate than others on the market. To ensure they have the right solutions for newly introduced attachments and excavators, HKX works directly with manufacturers to stay on top of the market. “We can be nimbler than the OEMs,” said Burnett. For customers who want to operate specialized attachments, an OEM solution may not work. “We fill a void between the OEM offers and what the customer needs.” When purchasing a kit for a rental machine, where the market is especially competitive, Burnett suggests that OEM solutions might add unnecessary costs for the dealer. Service and Support
As with all construction equipment, dealers are concerned about a manufacturer’s ability to stock parts. More than 500 types of tubes are stocked for HKX, and if they don’t have it in stock, custom tubes can be created within minutes of receiving an order. The company claims that 99 percent of parts
are available to ship same or next day. Walters recalled a recent customer who didn’t have the serial number for a broken kit. “With just a part number from a valve, HKX was able to locate exactly what the customer needed,” he said. Service is another key consideration for any business in construction. Because HKX relies on folks they don’t employ, or even vet, to complete their product, Burnett believes service is essential. A single department completely devoted to service issues answers questions about parts, installation and provides general information to dealers. The company offers product support training to larger customers on a paid basis. If needed, HKX can also be on the jobsites to rectify an unforeseen situation. “Service is why HKX is successful,” said Burnett. While HKX can work with all manufacturers and dealers, some are taking advantage of turn-key installation at locations across the U.S. and Canada. Kits can be installed for a flat-rate install price, removing the headache of installation from the dealer altogether. Dealers can decide for themselves whether to count the revenue as parts or machine sales.
Current customers include Caterpillar John Deere, Hitachi, Komatsu and LBX dealers/distributors worldwide. Dealer Success
Burnett keyed in on what seems to be working best for dealers. “The folks that are really successful with HKX have made the decision to embrace HKX. They have decided to use us exclusively at some level, whether it is for a particular type of machine or in all situations,” he said. Many excavators don’t have a factory-install kit option, so HKX becomes a standardized solution for them. The kits are designed to mount in OEM locations so techs don’t need to relearn anything. According to Burnett, HKX kits are available, easy to install, competitively priced and in most cases available within two to five days. This makes HKX a great resource for a distributor wanting to win timecritical business. Walters concurs on the importance of timeliness. “They can meet our deadlines no matter what. That is huge for us,” he said. “They are extremely easy to work with.” To learn more, e-mail sales@HKX. com or call 800-493-5487. n
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.. March 2015 | Construction Equipment Distribution | www.cedmag.com | 45
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Make an Impact.
Dealer Enquiries Welcome
Dealer Inquiries Welcome, please contact scott.davison@sandvik.com, 404-345-3716 www.bretec.com -Ad_template.indd 2
2/25/2015 4:28:14 PM
>> CFO 411
RON HODGEMAN
Proper Fixed Asset Management Can Avert Tax Overpayment Three tips to stay on top of your numbers and stay out of trouble.
F
Effective management of a company’s fixed assets requires more than software. It requires the right people doing the right things up front.
ixed asset management is painful for most people. Spending hours upon hours every month trying to figure out why a book-to-tax reconciliation is off by millions of dollars is not fun! Failing to dedicate enough time or the right resources to your fixed assets can result in missed tax benefits, compliance risks, and disastrous audits. With hundreds, if not thousands, of fixed assets on the books it is often necessary to utilize fixed asset software to track assets and compute depreciation and gain or loss upon disposition. Software that is a black box cannot simply be trusted to produce correct results – it needs human oversight. Effective management of a company’s fixed assets requires more than software. It requires the right people doing the right things up front. To ensure that a company’s reports are accurate, there are several things that should be done at least annually. Prepare a Tax “Roll-Forward” Report
This type of a reconciliation report helps a company make sure that the prior-year figures it reported on its tax return are correctly “rolling forward” to the current year. There are several variations of this report, but most will be used to reconcile (1.) tax depreciable basis, (2.) accumulated depreciation, and (3.) asset counts. If Dealer ABC has 1,379 fixed assets on its books at the end of last year, then they should have 1,379 fixed assets on the books at the start of this year. Similarly, if the total accumulated depreciation for assets on hand at the end of last year was $8.5 million, the beginning-of-year balance in the current year should also be $8.5 million. If the beginning-of-year accumulated depreciation is instead showing as $9 million, Dealer ABC is at risk of under-reporting its tax depreciation expense by half a million dollars! A properly prepared tax roll-forward report will catch these errors and help a company avoid overpaying its taxes.
Book-to-Tax Reconciliation
Very few companies use their ERP or financial accounting systems to also satisfy their tax accounting and reporting needs. Instead, an external tax fixed asset management application is often employed. Although there are many advantages to using taxspecific software, one of the down sides is that data generally must be transferred from the ERP system to the tax software. Whether the data transfer is automatic or manually processed, it can lead to missing or incorrect data on the tax side. A book-to-tax reconciliation can help a company identify these data issues. For example, Dealer ABC acquires an excavator for its rental fleet. The purchase price of the excavator is originally entered into the ERP system as $250,000. After the purchase data is uploaded into the tax software, a mistake is identified and the purchase price is changed in the ERP system to $350,000. Depending on Dealer ABC’s process for transferring new or revised data to the tax software, the corrected purchase price might be overlooked and result in an overpayment of tax. By regularly performing a book-to-tax reconciliation, any differences can be identified and resolved or explained before they become problems. Bonus Depreciation Flag
Do you have a “bonus flag” in your data? Keep in mind that only purchases of new assets qualify for bonus depreciation. When equipment is acquired, it’s a good idea to indicate in the accounting system whether the asset is new or used. If you’re taking bonus depreciation on everything acquired during the tax year, it could raise concerns during an IRS audit. The fact is, many dealers are not following these steps on a regular basis. The extra effort can minimize your taxes and help to avoid future headaches. 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. March 2015 | Construction Equipment Distribution | www.cedmag.com | 47
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THE RIGHT ANSWERS INVOLVE MORE THAN MONEY GE Capital’s solutions help drive productivity, profitability and growth If your financing solutions don’t help you manage inventory and move equipment into customer hands faster, it’s time to talk with GE. We understand how important immediate, customized financing is to your bottom line and we’ll build a solution to match your growth plan. So whether it’s flexible floor planning, fast answers that move more product, or reliable rental resources, we can transform financing from a cost-of-doing-business to a competitive advantage. Together. What we know can help you grow. GECapital.com/construction
Nothing herein shall be construed as an approval or commitment to finance or provision of other service by GE to any person. All transactions are subject to final investment/credit approval by GE and the execution of mutually satisfactory definitive documentation.
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/ m o .c on l ita cti p a tru C s E G on c 1/30/2015 4:09:32 PM
>> IN THE MARKET
ELI S. LUSTGARTEN
Oil Price Decline Drips into U.S. Economy Consumer confidence climbs, capital spending will ease – although activity will prove less robust, U.S. remains an oasis in a struggling world.
2
The construction sector is still expected to be one of the key major drivers of economic growth in 2015.
015 has started off much like the way last year ended: improving economic conditions in the U.S. and increased economic concerns abroad. U.S. 4Q2014 GDP growth was viewed as a modest disappointment at 2.6 percent compared to the near 5 percent of the prior two quarters, though it did result in meeting our expectations for U.S. 2014 GDP growth of 2.4 percent. The January jobs report instilled new optimism for the outlook for the U.S. economy. The strong January jobs number of 257,000 and the significant revisions to the November and December reported data (additional 147,000 jobs) resulted in over 1 million jobs created in the past three months. U.S. jobs growth last year was the strongest since 1999. Moreover, the average hourly wage growth of 0.5 percent reversed the -0.2 percent decline in December and got the U.S. back on its threemonth trend line of 0.2 percent. While likely helped by the increase in minimum wage in 21 states in January, the gain did place a healthy glow on the U.S. economic outlook. With the tax cut from plummeting oil prices, it’s no wonder that the consumer confidence is the best in seven years. Global growth remains a continuing concern, with worry about its future impact on the U.S. recovery. This reflects plunging oil prices, a surging U.S. dollar, uncertainty on whether (more likely when) the U.S. Fed will increase rates, and lingering questions whether the European Union can hold together. At least the major Central Banks have implemented a form of quantitative easing: the European Central Bank ($1.6 trillion), Japan ($680 billion) and even a token reserve cut in China ($100 billion) likely followed by further multiple adjustments to spur economic growth. The construction sector is still expected to be one of the key major drivers of economic growth in 2015. The outlook for housing and many parts of nonresidential construction continues to improve at moderate rates. However, our recent forecast for construction equipment of mid- to
high-single-digit gains in 2015 has likely lost the top end of growth this year due to the dramatic oil price decline and the unfolding cutback in capital spending in that sector. A good example of the recent changes can be found in the housing sector as the NAHB recently reduced its projection for housing starts for 2015 to 1.169 million (was near 1.25M; 2014 was 1.004M), still up over 16 percent but clearly a more subdued increase. We believe this reflects the impact of plummeting oil prices on the 10 energy-producing states and likely modest interest rate increases from the U.S. Fed this year as sub-normal interest rate policy begins to catch-up with the current, more normal U.S. economic conditions. Nonresidential construction outlook continues to be positive but also modestly less robust than before. Private nonresidential spending in 2014 was up 11 percent, slightly below the 12 to 15 percent projected by the AGC of America, though public spending did manage a modest 1.8 percent gain last year compared to the -1 percent to +2 percent AGC projection. Expectations for declining economic activity in energy regions are behind the more modest mid-singledigit gains for equipment demand in 2015. The collapse of oil prices from over $100 to under $50 per barrel for WTI crude will no doubt translate into reduced energy-related capital spending and lower economic activity in those states’ previously robust construction markets. We’ve seen this before; in 2008, energy prices plummeted from $147 to $91, and after a short rebound nearly collapsed to $32 in the recession. Today, we have excess supply and demand both in the U.S. and globally (but likely no recession) which will translate into lower upstream spending unfolding in 1H2015 and delayed reduced downstream expenditures in 2H2015 – and more likely in 2016. The outlook for most construction markets, commodities, and energy remains bright for the next several years, which should drive at least a moderate increase in equipment demand. n
ELI LUSTGARTEN (elustgarten@aol.com) is president of ESL Consultants, an industrial consulting firm. March 2015 | Construction Equipment Distribution | www.cedmag.com | 49
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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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www.intermatconstruction.com BLOG
#intermatparis
Design: madmac - Š Lev Kropotov
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
>> PROBLEM SOLVED
TROY OTTMER
Avoid Talent Tunnel Vision Nothing wrong with college brains – but what dealers need is both the book smarts and customer-intuitive DNA. .
O You can teach a person about your operation and the products it represents; you cannot teach superior people skills.
ne of the biggest problems in business is the development of talent for your business operation. You must have a plan in place to bring a consistent flow of new employees into the company so that turnover has limited impact. But how do you find talented individuals who can help sustain your company? Should you place ads online on job search sites? Is a staffing service or headhunter the way to go? Does your company recruit at colleges and job fairs? There are myriad ways to find potential talent, but how do you decide who you should pursue and hire to supply the talent your business requires? Do you have a template you look for, and do candidates that do not fit that pattern get dismissed without consideration? Does your usual candidate have to be an MBA or no interview? If you recruit this way you are probably guilty of “Talent Tunnel Vision” and are likely missing out on hidden treasures in the talent pool. I have been recruiting new employees for eight-plus years and business school graduates are not my target recruits. It’s not that I won’t recruit a business graduate, but they are not my ideal candidate; I just haven’t had much luck with them as entry-level hires. They come out of school with degrees and believe they have all the answers. Many of them have high opinions of themselves, and it can be difficult to bring them back down to earth. Your ability to train them with this behavior can be severely hindered, and their behavior may not be limited to internal relationships – it could show up during interactions with your customers. And trust me, customers do not like dealing with people with a noticeably high opinion of themselves. If, on the other hand, a new recruit begins by asking questions, treats his education as a stepping stone, and understands he must
continue to grow, you’ll know you’ve found a keeper. When we recruit at colleges, the most common question they ask is, “What major are you looking for?” In truth, I’m not looking for majors; I’m looking for people that will bring talent to the company. What degree a person receives is of less interest to me than their willingness to learn the company’s culture. Challenge these recruits; give them a chance to show off their skills. Not only do you find out what they are capable of and what their limits are, they get to discover them as well. Treat missteps as a lesson to be learned, and let them discover the solution to the mistake and praise their efforts when they succeed. Doing this will allow you identify the future stars, who will also be loyalty to the company. I prefer to target people who worked service jobs while they were in college. Bartenders and restaurant servers are excellent candidates to consider. You can teach a person about your operation and the products it represents; you cannot teach superior people skills. This type of candidate is good at establishing connections with customers. People who are good at establishing this customer relationship usually provide excellent service and are willing to listen to the customer and the needs they have. This is a hard skill to develop, and finding someone for whom it comes naturally puts you ahead of the curve in training. Transacting business is about people creating relationships. People who do it well are an asset. Finding talent for your business is tough. Make it easier on yourself by focusing more on a person’s talents and less on what they majored in college. There are no grades in the real world. Every day is pass-fail, and the answers are not in a book. Ask yourself who you want representing your company. 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. Mitchell Ivey, Fixed Operations coordinator at Doggett, contributed to this article. March 2015 | Construction Equipment Distribution | www.cedmag.com | 51
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3/4/2015 11:20:27 AM
>> WASHINGTON INSIDER
CHRISTIAN A. KLEIN
Washington Gets to Work on Workforce Policy Government turns spotlight on the problem, but ultimately it’s up to all of us to tackle our industry’s skilled worker shortage.
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AED will be... working to identify opportunities for distributors to engage and help guide the development of state programs.
he nation is slowly waking up to something most AED members have understood for a long time: The skilled technical worker shortage threatens to undermine long-term economic growth in the U.S. and Canada. The White House thrust workforce development into the spotlight early this year, unveiling a proposal in January to make two years of community college free for many students. At the same time, President Obama called for the creation of a new American Technical Training Fund that would channel resources to community colleges and other institutions that have strong employer partnerships and include work-based learning opportunities. For better or worse, Obama’s proposals probably aren’t going anywhere fast. Given the federal budget situation, new program authorizations are a heavy lift on Capitol Hill, and there are considerable questions about whether making community college a new entitlement is the right thing to do. But the proposal has at least raised the visibility of technical training issues and helped AED start a dialogue with the administration. A more tangible opportunity on the workforce policy front is guiding implementation of the Workforce Innovation and Opportunity Act (WIOA), which President Obama signed into law last year. To be eligible for WIOA funding, states must implement a “unified state plan” that contains a four-year strategy for implementing core programs and ensuring that educational initiatives meet the needs of employers. Employer engagement is a critical component of the new initiatives and will help ensure that workers are trained in fields where jobs exist. That creates an important opportunity for dealers looking to guide local program implementation. Your state’s workforce agency officials want to hear from you. And the better they understand your local current and future workforce needs, the more likely they are to shift resources to training technicians. In the months
ahead, AED will be more closely tracking WIOA implementation and working to identify opportunities for distributors to engage and help guide the development of state programs. But WIOA is just one of many workforce policy issues on which AED will be focusing. Another top priority is reauthorizing the Perkins loan program, which will lapse later this year if Congress doesn’t act. The Perkins program provides about $1 billion in financial aid per year to students studying for technical careers. However, under the program’s established Pay-Go rules, Congress may find itself having to cut something in order to offset the cost, potentially pitting the Perkins program against other education priorities and making for a much more challenging reauthorization process. At the same time that we’re ramping up our lobbying activities, we’re also laying a solid foundation for long-term success by gathering data we’ll use to support and guide our advocacy. At its meeting in February, the AED Foundation Board approved funding for a major workforce study by researchers at the College of William & Mary’s public policy program, which has produced several highlyregarded economic reports for AED in recent years. The study will include a distributor survey to quantify the technician shortage, examine various federal and state programs to help determine which work best, and recommend possible policy improvements to grow the skilled workforce. Work on the project will start this summer and the final report will be unveiled early next year. AED’s involvement in workforce policy is important. Government funding, coordination, and best practices promotion are valuable, but we also know the government can’t solve every problem and won’t solve this one on its own. My colleagues at The AED Foundation are doing great work on all those fronts. Consider giving them a call, pledging your support toward their annual campaign, and getting involved. n
CHRISTIAN KLEIN (caklein@aednet.org) AED’s vice president of Government Affairs. He can be reached at 703-739-9513. March 2015 | Construction Equipment Distribution | www.cedmag.com | 53
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>> READY TO ORDER Loftness Offers New Kwik-Trim Mechanical Tree Trimmer Loftness Specialized Equipment has released a new version of its Kwik-Trim compact mechanical tree trimmer for right-of-way maintenance work. Featuring an upgraded chassis and powertrain, the new unit offers more horsepower, increased stability and easier maintenance than the previous model. Equipped with a turbocharged 47.6-horsepower diesel engine, the Kwik-Trim meets Tier-4 compliance, adding more power and fuel efficiency. The new unit is approximately 800 pounds heavier than previous models with an operating footprint that is 7 inches wider and 7 inches longer, helping to maximize stability on difficult terrain. However, the unit is still compact enough to access tight jobsites and light enough to be towed behind a pickup. A new hose reel mount eliminates the need for external boom support during transport. Other new features include easier access to hydraulic components and a more convenient location for the winch, which has its own hydraulic circuit. The Kwik-Trim has a fiberglassreinforced plastic (FRP) boom that telescopes to 53 feet, allowing the machine to handle the vast majority of trimming needs along right-of-ways. At the end of the boom is a 24-inch, carbide-tipped saw blade, which operates at 3,000 RPM For more information visit www.loftness.com
advertisers’ index Ajax Tool Works . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
LayMor Sweepers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Altus Global Trade Solutions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Liebherr Construction Equipment Co.. . . . . . . . . . . . . . . . . . . . . 1
BAIR Products, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Lowe Manufacturing Company, Inc.. . . . . . . . . . . . . . . . . . . . . . 19
BidSpotter.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Ritchie Bros. Auctioneers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
DIS Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Rototilt, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
eBS Mechdata, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Sandvik Mining & Construction LLC. . . . . . . . . . . . . . . . . . . . . . 46
e-Emphasys Technologies, Inc. . . . . . . . . . . . . . . . . . . . . . . 28-29
Screen Machine Industries, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . 39
EPG Insurance, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Sentry Insurance Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
GE Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Summit Supply LLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IFC
Glynn General Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Turtle Plastics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
IMEX Management, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Unified Purchasing Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . IBC
Infor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
XAPT Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OBC
As the official magazine of Associated Equipment Distributors, this publication carries authoritative notices and articles in regard to the activities of the association. In all other respects, the association cannot be responsible for the contents thereof or the opinions of contributors. Copyright © 2013 by Associated Equipment Distributors. Construction Equipment Distribution (ISSN0010-6755) is published monthly as the official journal of Associated Equipment Distributors. Subscription rate — $39 per year for members; $79 per year for nonmembers. Office of publication: 600 W. 22nd St., Suite 220, Oak Brook, Ill. Phone: 630-574-0650. Periodicals postage at Hinsdale, Ill. 60521 and other post offices. Additional entry, Pontiac, Ill. POSTMASTER: Send address changes to Construction Equipment Distribution, 600 W. 22nd St., Suite 220, Oak Brook, Ill. 60523
March 2015 | Construction Equipment Distribution | www.cedmag.com | 55
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3/9/15 1:03 PM
>> EASY WINS
STEVE CALECHMAN
Making Social Media Work for Your Company Being ‘out there’ is good, but it can be tough finding your groove, keeping your focus, and sustaining your presence. Follow these tips to get business social media right.
U
Only a few people and companies amass millions of followers based on their mere existence. Most of us have to be human, so be human.
sing social media isn’t particularly hard or expensive. Using it well is a different matter. It’s not enough to set up a Facebook page and constantly tweet and expect sales to explode. The first word in the outreach effort is “social” – you need to be that in order to get people to notice what you offer, share it and build your identity. And that requires patience, focus and restraint. Rich Brooks, president of Flyte New Media, an Internet marketing firm in Portland, Maine, offers some tips: Take a survey. Before you guess what you should be doing, e-mail your customers and clients, asking what platform they most use. Make it easier and more productive by going to wherever they already are, not trying to entice them to a new venue. Once you know their location, hone in instead of trying to hit every possible medium. “Go deep rather than shallow.”
Shore up your website. It isn’t classically social media, but it’s a fundamental element, since you want get people back to your property. And when they get there, your site needs to be current, easily navigated, and, most importantly, mobile-friendly. If any of those are off, the bad taste lingers. Once they visit, you want to sign them up for your e-mail list. You’ll have it forever and you can always get in front of them. Regardless of what’s said, e-mail is still read – companies send alerts that way because it reaches the person. Start blogging. It’s a solid way to be able to express yourself. There’s no magic word count, but 300-700 might be considered a sweet spot. Start slow – better to be consistent with new entries, even if it’s once a month – and send posts directly to customers, since you have their e-mail addresses. Your guiding principle for whatever you write is to answer questions that help people do their jobs better. Don’t worry about giving away information for free. The material exists and is searchable. You rarely lose by sharing expertise. When you do it willingly, you send the message that you put a premium on being helpful and that helps you attract your ideal kind of customer. “If you stress value, that’s who you’ll get.” Go easy with self-promotion. You can’t treat Facebook, Twitter, Instagram or any other social media site like advertising with an immediate return. Your goal is to slowly build relationships. In your profile, include a photo and a brief personal description, along with your location. While social media is without borders, you want to engage with local people. Offer your professional take but also share articles and post photographs of your customers. Promote them and they’re more likely to do the same for you. Mix in comments about the upcoming big game and your innocuous interests and hobbies. Only a few people and companies amass millions of followers based on their mere existence. “Most of us have to be human, so be human.” 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. 56 | www.cedmag.com | Construction Equipment Distribution | March 2015
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3/9/15 12:45 PM
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