December 2012
www.cedmag.com
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Plus: Summit heads to Vegas – local dealers talk about market conditions How to decide what your service trucks should look like Selling used parts and equipment around the world Since 1920 2IÀFLDO 3XEOLFDWLRQ RI
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Please visit us in CONDEX Booth 207.
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Contents
Winner 2012 Journalism Award Construction Writers Association
DECEMBER 2012 Vol. 78, No. 12
Editorial Team Executive Editor and Director of Programs KIM PHELAN kphelan@aednet.org
FEATURES
COLUMNS
From the Chairman 5 Looking back, business would have been a lot tougher without AED.
Contributing Editor JOANNE COSTIN pr@aednet.org
Editor’s Note 7
Graphic Production EVA BELMONTE design@aednet.org eva@neggie.net
’Twas the month before Summit
On the Numbers 63 What to do if you want public rental company-type results
Columnists GARRY BARTECKI AED Vice President of Finance CHRISTIAN KLEIN AED Vice President of Government Affairs and Washington Counsel ELI LUSTGARTEN ESL Consultants
Don’t Spec Till You 5HÁHFW 28
Las Vegas Revs Up for a Comeback 30
Business objectives for the service department should drive the details for your service vehicles.
AED Summit is coming to town – have conditions been naughty or nice to the area’s local distributors?
JERRY RANDECKER & CHRIS SITTER Jordan-Sitter Associates RON SLEE R.J. Slee & Associates
AED is aggressive on passive loss income issues.
Inside AED Groundwork Industry Beat Play It Safe Advertisers’ Index Dealer Data
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
600 22nd Street, Suite 220 Oak Brook, IL 60523 630-574-0650 fax 630-574-0132 www.aednet.org
Washington Insider 67
DEPARTMENTS FROM THE COVER
Advertising Contacts
Production Manager MARTIN CABRAL 800-388-0650 ext. 313 mcabral@aednet.org
Aftermarket 65 You’ve got the value; make sure customers know it.
An Indelible Mark 38 The presidential candidate most aligned with AED legislative priorities did not win, but AED made great strides as an influential force in Washington.
Window to CONDEX 44 Part 2 of our glimpse at some of the products and services you’ll see at the 2013 CONDEX show at Summit next month
8 13 14 24 71 72
Plus: Blown Away: Dealers Dive In To Help SandyStruck Region 26 Watch Out for Another Legal Gotcha – Fiduciary and Cyber/ Privacy Liability 56
December 2012 | Construction Equipment Distribution | www.cedmag.com | 3
From the Chairman President & CEO TOBY MACK Associated Equipment Distributors Oak Brook, Ill.
A Unique Association, With the Best ROI
Executive Vice President & COO ROBERT HENDERSON Associated Equipment Distributors Oak Brook, Ill.
OFFICERS
Nothing compares to the opportunities we get from AED – including the big one next month.
Chairman LAWRENCE F. GLYNN CMW Equipment, St. Louis, Mo.
Vice Chairman MIKE QUIRK Wagner Equipment Co., Aurora, Colo. Sr. Vice President TIMOTHY J. WATTERS Hoffman Equipment Co., Piscataway, N.J. Vice President GARRY FRELICK Douglas Lake Equipment, Langley, BC Vice President DON SHILLING General Equipment & Supplies, Inc. Fargo, N.D. Vice President of Finance MICHAEL D. BRENNAN Brandeis Machinery & Supply Co., Louisville, Ky. Past Chairman DENNIS E. KRUEPKE McCann Industries, Inc., Addison, Ill.
AT-LARGE DIRECTORS PAULA BENARD C.N. Wood Co., Inc. Woburn, Mass. RICK DAHL Metrolift, Inc. Sugar Grove, Ill. GREGG R. ERB Erb Equipment Company, Inc. Fenton, Mo. DENNIS J. HELLER Stephenson Equipment Inc. Harrisburg, Pa. MIKE ROONEY Thompson Tractor Co., Inc. Tarrant, Ala. MICHAEL J. SAVASTIO Groff Tractor & Equipment, Inc. Mechanicsburg, Pa.
REGIONAL DIRECTORS BRUCE A. BOWMAN, Upper Midwest Reg. Star Equipment, Ltd Des Moines, Iowa
RICK VAN EXAN, Eastern Canada Reg. Toromont Industries Ltd. Concord, ON PATRICK MCCONNELL, West Reg. Clyde/West, Inc. Portland, Ore. MARK ROMER, Southeast Reg. James River Equipment, Inc. Ashland, Va. JEFFREY SCOTT, Rocky Mountain Reg. Intermountain Bobcat Salt Lake City, Utah GERALD W. TRACEY, Northeast Reg. Tracey Road Equipment Inc. East Syracuse, N.J. GARY D. VAUGHN, South Central Reg. OCT Equipment, Inc. Oklahoma City, Okla.
BY LARRY GLYNN
Early in my career the management of CMW sent me to my first AED training seminar for dealer salesmen in Denver, Colo. The original owners of the company had joined AED soon after they had formed the company, and as they attended the annual conventions they quickly became believers and supporters. I joined the company as a field salesman in March of 1977. I was lucky and successful in my territory. So in 1981, when two of the original four owners decided to give up control to the younger guys, I was invited to be one of the three future owners of the company. Realize that in 1981 the prime rate was 21 percent, historical margins of the equipment sales were slipping and the country was in a recession – but we didn’t care. We were being given our chance, even if it meant going unbelievably into debt and basically not really knowing what we were doing. We began having weekly 5 o’clock Monday night management meetings, which would often last till 9 or 10. A 12-pack of beer, pretzels and nuts were usually dinner for the three of us. Daytime meetings took away from selling time and we could not afford that. One Monday morning in June 1982, we had our weekly sales meeting at 7 a.m., worked all day and then had our management meeting until 10 p.m. When I got home that night my wife, Tonya, who was nine months pregnant, told me it was time to go to the hospital. The next morning at 10 my son, Nicholas, was born. I was so happy and proud it didn’t matter that I had been up for thirty hours. It was fun to be young and aggressive. During that first year we decided we did not have the money between us to be everything to everybody and decided to focus our little company on asphalt and concrete equipment, basically the equipment to build roads. Tom McGowan, one the founders who had not yet retired, took me to my first AED convention to show me the ropes. It was fun and exciting.
We visited lots of booths and suites and also attended the manufacturer meetings, where Tom would explain that we were buying the company and had taken control. At many of those same meetings I thanked the manufacturer for past support but explained we were no longer going to sell their product. Without fail they turned to Mr. McGowan for validation. I probably set a record for dropping lines at my first convention. Most of the structure and big management decisions for our company came out of ideas we learned from AED meetings, publications or the bar talk at AED functions. When we decided to write our employee manual, we used the template from AED. When I started to attend the Young Executives conferences every summer I met some great friends that I still have today. We talked then and still talk about everything there is to talk about construction equipment distribution. We compare notes on how manufacturers treat their dealers, which ones are profitable and truly provide product support. We talk about the other manufacturers, too. During the 1990s I was invited onto several AED committees, adding more names to my phone book. I began attending the Government Affairs meetings, and from 2002-2004 I was on the board for the first time. My participation was limited due to my first wife’s battle with terminal cancer, but during the meetings I could attend I learned how similar all dealers’ problems are. AED has provided for us all the tools we have needed to operate the company throughout the years. CMW belongs to about 20 trade associations, but none comes close to giving us the return on investment we get with AED.
LARRY GLYNN (larryg@cmw-equip.com) is President of CMW Equipment in St. Louis, Mo.
December 2012 | Construction Equipment Distribution | www.cedmag.com | 5
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Please visit us in CONDEX Booth 709.
Editor’s Note
’Tis December Already – St. Nick Can’t Believe It Either Swap economic trepidation for some Summit elation, I mean education. BY KIM PHELAN
I probably say this every year, but I simply cannot believe that it’s December already. Where did the year go? Actually, at this moment, it’s early Thanksgiving morning as I dot the final “i’s” on the following little poetic spoof I’ve created for your amusement. I’ve just glanced at the news on my computer and am quickly reminded how troubled and troubling our world is. Of course, it’s always been that way, right? I’m a product of the ‘60s, and things weren’t all that tame in that decade either. And while our industry
has certainly had some spoon-fed, chubby years, you guys and girls in the equipment distribution business have always had to work pretty hard for your well-deserved profits. I have to say, I admire your pluck today, when so many forces seem to be working against the construction industry and the equipment responsible for our amazing built environment. But I realize there’s so much to be thankful for as I reflect over the year we’re closing. Maybe it’s the holidays that stir up the “mush” for me, but it’s refreshing to take a break from the disappointments and instead count
‘Twas the month before Summit and all through the land Not a dealer was whining, no matter what brand – Entre-pre-neurs right down to their stockings Despite world events becoming so shocking! Politicians were tucked quite soundly we see In status quo friction back in DC, While visions of taxes that businessmen dread Danced wildly inside Mr. Obama’s head. For only a night’s dream could give such enjoyment Of policy sure to boost unemployment. Families nestl’d at home behold the dramas Of Petraeus explaining, and cease-fires with Hamas – (Yes, that rhyme was a stretch, but in our defense Haven’t you heard of poetic license?) – While union officials kill off the last Twinkie And Congress scoots fiscally close to the brinky. Meanwhile, Sandy’s winds have caused such a mess And Europe’s economy is sunk, more or less. But the EPA’s Lisa won’t be deterred From battling shale fracking – and coal, be assured.
the blessings. I’ve never enjoyed a job more than the one I have today, and I owe much of that contentment to all you folks. Now, I’ll get out of the way and let you get to this industry version of the highly parodied “Night Before Christmas.” Have a wonderful holiday season and I look forward to seeing you at Summit next month. Thanks for reading! KIM PHELAN (kphelan@aednet.org) is the executive editor of Construction Equipment Distribution and director of programs for AED.
Yet what if the government’s eyes saw the facts That highways and bridges need more than gas tax! If they drew in their large heads and perhaps got a clue They might see that water needs funding too. Employment’s a problem, you know that it’s true, With more Baby Boomers saying ‘bye-bye, we’re through.’ And far fewer Gen Xers tending to quench The industry’s thirst for a smart, high-tech wrench. For those who’ve been lucky enough to find hires They’re in for a problem when cheeks burn like fires. For whenever it’s plain that a doctor they’re needing, Obamacare promises that everyone’s bleeding. Recovery seems distant and markets are soft, Plus Tier-4 is scaring our customers off. There are no simple answers for your anxiety, But thank goodness at least you’ve got AED. It’s good and it’s healthy to come learn together. Soon sad spirits will feel light as a feather. Learn to be profitable, learn to keep wealth; Learn how to laugh in spite of yourself. Till we meet in Las Vegas my wish, till we’re near: Happy Christmas to all and a Happy New Year!
December 2012 | Construction Equipment Distribution | www.cedmag.com | 7
Inside AED
/HVVRQV LQ 3URÀWDELOLW\ AED Summit sessions provide you with step-by-step instructions. According to Langdon, the goal is to compete on factors Competition is nothing new, but have you other than price. “Even if you are selling the same product wondered if some customers are worth winning over? Bob as another dealer, there are so many more components Langdon can help you decide. Langdon offers a systematic that go into a decision about where you buy the product,” and proven approach to improving profitability and one said Langdon. “The key is to identify of the first steps is finding something that is more important than out who your most profitable price, so that price can move down the customers are. Bob Langdon, consultant, decision-ladder.” “Most dealers fall into the trap speaker and author of Immediately following, in a second of treating all customers the Managing Your Business for same,” said Langdon. “Instead, Profit, has been helping busi- Summit session titled, “Three Routes to Increased Profitability,” Langdon guides they should be offering differnesses learn how to achieve dealers in the process of evaluating their ent levels of service based their sales, marketing and profit potential and exploring three on the profitability of financial goals since 1981. different ways to increase profitability. the customer.” A sought-after speaker among dealer groups, Langdon In “Seven Steps to Closing a Profitable Sale,” Langdon promises to add understanding to profitability concepts offers practical step-by-step instructions to guide dealers with real-life examples based on more than 30 years in the process of identifying and selling to the upscale, consulting with manufacturers, dealers and contractors. service-driven customer, and closing a profitable sale. Attend Langdon’s sessions at AED Summit to discover Understanding how to differentiate your dealership is a key focus because most dealers can’t afford to be the lowest what differentiates your business, and then follow the steps to greater profit margins, more working capital and cost provider. “It’s about identifying ways to compete, finding a niche and being profitable,” explained Langdon. loyal customers.
The Power of Sharing
Performance Group meetings prove to be the easiest way to make more money. Performance Groups, a type of Dealer 20 Group program created last year by AED and ADP Performance, is a powerful and growing new member benefit for AED dealers. Participants in the newly formed groups – never comprised of competitors – are realizing tangible applications from the best practices shared among group members, as well as shared monthly financial reporting, and even accountability to complete “homework” between meetings. “The real benefit is from attending the meetings and exchanging ideas, practices and information,” Dennis Heller, president of Stephenson Equipment based in Harrisburg, Pa. “I do not understand how anyone could afford to not engage in a Performance Group. “It’s not a cure-all, but it is one of the many Dennis Heller things a dealer needs to do today to make money.” Enrollment is open to all AED dealers, and a new rental-focused group is currently in development, which is open to members whose business models range from traditional dealer with RPO-style rental practices to 100-percent rent-torent operations. Some five years ago, Don Shilling, president of General Equipment in Fargo, N.D., had helped AED identify the need (continued on page 10)
Proposed New Members CWS Industries (Mfg) Corp. Surrey, British Columbia
Winkle Industries Alliance, Ohio
Trekker Tractor, LLC Miami, Fla.
Proxibid Inc. - Omaha, Neb.
Cumberland Tractor & Equipment, LLC Nashville, Tenn.
Pettibone - Baraga, Mich. Noble Iron - Houston, Texas
This list is published each month as required by AED bylaws. Comments on the applicants should be directed to AED President Toby Mack at 800-388-0650 ext. 326 or jtm@aednet.org. 8 | www.cedmag.com | Construction Equipment Distribution | December 2012
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Please visit us in Suite 18121 North Tower.
Inside AED (“The Power of Sharing” continued from page 8)
for 20 Groups during his tenure as chairman of The AED Foundation. At the time, however, AED was not able to find the right consultant or program to fit the specific needs of equipment dealers. “When I was approached a little over a year ago about joining a potential AED 20 Group, I jumped at the chance,” Shilling said. “I didn’t know much about the Performance Group, but I knew no matter who the facilitator was, it is the dealers involved that Don Shilling give the group its power and benefit.” Shilling opened up to CED about what happens at his group’s meetings, which the participants determined would convene three times per year. “We talk about our financials, in fact we share our detailed financials and discuss how we can make changes in our business to align our companies with the positive financial performance that our group’s top performers attain. This is finally coming into its own. We asked the Performance Group to make some major changes in the financial reporting to make it better and they did so with
little or no resistance. We now get monthly financial comparison, based on a rolling 12-month reporting that gives us excellent, timely feedback.” “Bigger than that, we each share a ‘dollar time’ – moneymaking or cost-saving actions we have implemented at our dealerships. We each share the ideas and the best idea wins. But every idea is good and gives you something to think about and how you can do it better at your dealership.” “We also share experiences in HR, sales compensation, computer systems, banking, etc. It becomes a sounding board for new ideas we have at each of our businesses. Whereas some dealers might view “sharing” as risky, fearing their competitive secrets might seep into competitors’ hands, those involved in Performance Groups report none of that. Shilling says he wants his dealer friends to understand that, “We need to talk together with fellow dealers about business issues to improve or save our business. We need to spot financial trends starting across the country so we know they are not isolated to our territory. And of course it never hurts to make new friends in the business.”
MARK YOUR
CALENDAR
For information on any upcoming AED events, visit www.aednet.org or call 800-388-0650. Dec. 6 - Webinar: Industry Financial Updates for CEOs/CFOs 2 p.m. CST | Presented by Industry Financial Experts Dec. 10 - Webinar: Service 0DQDJHPHQW /DERU (IÀFLHQF\ 11-Noon CST | Presented by Ron Slee
Feb. 12 Webinar: Basic Inventory Control 2-3 p.m. CST | Presented by Ron Slee Feb. 13 - Webinar: Warehousing 11-Noon CST | Presented by Ron Slee Feb. 13 - Webinar: Pricing 2-3 p.m. CST | Presented by Ron Slee
Dec. 10 - Webinar: Service Management - Flat Rating/Standard Jobs 2-3 p.m. CST | Presented by Ron Slee
Feb. 19 - Webinar: Inspection 11-Noon CST | Presented by Ron Slee
Dec. 11 - Webinar: Service Management - Shop Floor Scheduling 11-Noon CST | Presented by Ron Slee
Feb. 19 Webinar: Work Order Processing 2-3 p.m. CST | Presented by Ron Slee
Dec. 11 - Webinar: Service Management - Standard of Performance 2-3 p.m. CST | Presented by Ron Slee
Feb. 20 - Webinar: Labor Rates 11-Noon CST | Presented by Ron Slee
Jan. 15-17, 2013 - AED Summit & CONDEX | Las Vegas, Nev. Feb. 12 - Webinar: Tele-Selling 11-Noon CST | Presented by Ron Slee
Feb. 20 Webinar: Service Organization 2-3 p.m. CST | Presented by Ron Slee Feb. 21 - Webinar: Are You a Boss or a Leader? | 10-11:30 a.m. CST Presented by Christine Corelli
10 | www.cedmag.com | Construction Equipment Distribution | December 2012
Feb. 22 - Webinar: Industry Financial Updates for CEOs/CFOs 10 a.m. CST | Presented by Industry Financial Experts Mar. 5 - Webinar: SELL Process – Your Offense | 10-11:30 a.m. CST Presented by Don Buttrey Mar. 6 - Webinar: ‘Expose Yourself’ – Aftermarket Marketing and Sales (Part 1) | 10-11 a.m. CST Presented by Rich Jilek Mar. 11-12 - Seminar: Parts Management Unit I: When It’s Right Presented by Ron Slee |Dallas, Texas Mar. 13-14 - Seminar: Service Management Unit I: When It’s Right Presented by Ron Slee |Dallas, Texas
Please visit us in CONDEX Booth 621.
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Groundwork OFFICERS Chairman CHRIS PERA Eastern HighReach Company, Inc. Horsham, Pa. Vice Chairman A. ROY KERN Equipment Corporation of America Coraopolis, Pa. President BOB HENDERSON The AED Foundation Oak Brook, Ill. JOHN CRUM Treasurer Wells Fargo Equipment Finance, Inc. Pittsburgh, Pa. Immediate Past Chairman WALTER BERRY Berry Companies, Inc. Wichita, Kan. AED Board Representative DON SHILLING General Equipment & Supplies Inc. Fargo, N.D. Executive Director STEVE JOHNSON The AED Foundation Oak Brook Ill.
DIRECTORS GARY BRIDWELL Ditch Witch of Oklahoma Edmond, Okla. MIKE FESTING-SMITH NORTRAX, Inc. Tampa, Fla. MIKE HAYES Komatsu America Corporation Rolling Meadows, Ill. MICHAEL HINRICHSEN Caterpillar, Inc. Peoria, Ill. TIMOTHY KRAMER Kramer Ltd. Regina, SK DR. WAYNE LONGBRAKE Former Dean, Penn. College of Technology Williamsport, Pa. SONJA METZLER Ohio CAT Broadview Heights, Ohio KENNETH SILVERMAN Volvo Construction Equipment Shippensburg, PA KEITH TIPPETT Kirby-Smith Machinery, Inc. Oklahoma City, Okla. DUANE WILDER Liebherr Construction Equipment Co. Newport News, Va.
Introducing the New Web-Based Technical Assessments for Dealer Service Techs Use this tool to evaluate service technicians – both job applicants and existing employees. A new online Dealer Technician Technical Assessment is now available through The AED Foundation. This valuable employment tool can be used to quickly evaluate applicants’ technical knowledge as part of the pre-hire process, or to assess currently employed technicians. Assessments can also be used to measure employee strengths and weaknesses before and after technical training. Individual assessments are priced at $50 each for AED members and $150 each for nonmembers. The test is available in both English and Spanish versions and can be ordered online with a credit card. Dealers will have the ability to manage all processes related to AED Technical Assessments activities online through a password-protected admin login area. Here, the dealer account manager can: Order assessments Receive and assign test-taker logins and passwords Receive assessment results Create benchmarking reports Test-takers access the site with an assigned username/login and password. Once assessments are completed, results are immediately available to managers in the admin area. Created by Industry Taskforce The technical assessment was two years in the making, representing the work of a taskforce comprised of 24 equipment technical
experts representing AED dealers, equipment manufacturers and AED Accredited technical colleges with equipment programs. It is aligned with AED National Construction Equipment Technical Standards that are now in their seventh edition. The 160 questions evaluate technician knowledge in the areas of diesel engines, powertrains, electric/electronics, A/C and heating, hydraulics/ hydrostatics, and safety/administration. After completing the 120-minute timed assessment, each test-taker receives a “percentcorrect” score for each of the six areas, as well as an overall score. The AED Foundation has not established a “passing” score for the assessment. However, benchmarking data is conveniently available with user selected “data buckets” and “date parameters.” Using that benchmark data, individual dealerships can determine their own test performance parameters. The benchmarking data available will expand as more AED dealers utilize the Technician Technical Assessment. AED encourages dealers to improve their employee evaluation process both before hiring technicians and afterwards with AED Technical Assessments. Unlike a one-size fits all approach to training, the AED Technical Assessments allow you to pinpoint areas where additional training is needed. For more information, contact Pat Novak at 630-4685135, pnovak@aednet.org.
Congratulations to Newly AED Accredited and Re-Accredited Technical School Programs AED Accreditation is based on achieving rigorous equipment industry national technical standards created and are updated every three years by AED taskforces comprising equipment dealers, manufacturers and technical colleges. -Central Arizona College, Coolidge, Diesel and Heavy Equipment Technology Program (Accred.) -North Dakota State College of Science, Diesel Technology and Caterpillar ThinkBIG Dealer Service Technology Programs -Linn-Benton Community College, Heavy Equipment / Diesel Technology and Deere Construction & Forestry Equipment Tech Programs -White Mountains Community College, Mobile Equipment Technology Program -Parkland College, Diesel Power Equipment Technology and CNH Service Technician Programs -Linn State Technical College, Heavy Equipment Technology and CAT ThinkBIG Dealer Service Technician Programs -Lansing Community College, Heavy Equipment Repair Program
December 2012 | Construction Equipment Distribution | www.cedmag.com | 13
Industry Beat
ROMCO Acquires Conley Lott Nichols New paving and ag divisions created. Dallas-based ROMCO Equipment Company has acquired Conley Lott Nichols (CLN), purchasing all assets of CLN and retaining almost the entire operations staff. To integrate this acquisition, ROMCO announced the creation of new paving and aggregate divisions. The paving division is headed by Guy Brown, formerly general manager of CLN’s Road Building Division. The MPS Aggregate Division is led by Donna Bossert (also formerly with CLN). ROMCO carries the full line of Volvo Construction Equipment, Hitachi Construction and Mining Equipment, Blaw-Knox Road Equipment, Eagle Iron Works Aggregate Equipment and GOMACO Concrete Pavers.
Pictured from left to right: Charlie Clarkson, president of ROMCO Equipment Co.; Bob Mullins, founder and chairman of ROMCO Equipment Co.; Robert Nichols, CEO of Conley Lott Nichols; Robert Mullins, CEO of ROMCO Equipment Co.
MacAllister Announces $8.9 Million Expansion Caterpillar distributor MacAllister Machinery Company, Indianapolis, Ind., announced plans to invest $8.9 million to equip and expand its existing 38,740 square-foot Washington facility by more than 50,000 additional square feet. The expansion, which is expected to be completed in fall of 2013, will house sales, parts and services for MacAllister’s inventory of Caterpillar heavy and compact equipment as well as MacAllister Power Systems including Caterpillar generators. “MacAllister was founded in 1945 in Indiana and has deep roots in the Hoosier state, with 20 locations,” said President Chris MacAllister. “We continue to grow, and our presence in Washington for 28 years is based on the excellent local workforce that serves our mining customers
24/7. Centralizing component rebuild work from around the state in Washington leverages that excellent workforce and creates economies of scale.” MacAllister, which currently employs nearly 100 associates in Daviess County, plans to begin hiring additional management, service and customer service personnel to coincide with the completion of the expansion, and plans to add up to 61 new jobs by 2016. The Indiana Economic Development Corporation offered MacAllister Machinery Company, Inc. up to $700,000 in conditional tax credits and up to $100,000 in training grants based on the company’s job creation plans. Daviess County will consider additional property tax abatement at the request of the Daviess County Economic Development Corporation.
Study Highlights Enormous Economic Impact of Unconventional Oil and Gas A new study by IHS Global Insight, a leading research company, finds that unconventional oil and natural gas activity (horizontal drilling and hydraulic fracturing) in the United States will spur more than $5.1 trillion in capital expenditures between 2012 and 2035. Over the next 23 years, these activities are expected to contribute enormously toward the U.S. economy – and the equipment industry. The extraction methods analyzed are capital intensive. The survey finds that equipment accounts for 24 percent of well site infrastructure capital expenditures and nearly 50 percent of revenues generated from the oil production are spent on construction, fabricated materials, and heavy equipment. The report notes that, as the amount of oil produced through conventional and deep-water methods of extracting oil decreases over the next 23 years, unconventionally extracted oil production will continue to grow, becoming the most productive method by 2015. Year
2012
Capital expenditures (billions) $87.3
Employment Impact (direct, indirect, and induced) (millions of jobs) 1.7
Total economic contribution (billions) $237.7
Tax revenues generated (state & federal) (billions) $61.8
2020
$172.5
3
$416.5
$111.2
2035
$353
3.5
$475
$124.4
14 | www.cedmag.com | Construction Equipment Distribution | December 2012
Join our HYDREMA family!
The driving force behind our success is our DEALERS!
www.hydrema.us
Please visit us in CONDEX Booth 401.
Industry Beat
IN THE NEWS
Kirby Smith Opens Odessa, Texas Branch Kirby-Smith Machinery, Inc. held a grand opening celebration Oct. 16-17 for its newest branch location off of I-20 and Loop 338 in Odessa, Texas. The Odessa Chamber of Commerce and Midland Hispanic Chamber of Commerce both performed ribboncutting events, welcoming Kirby-Smith Machinery to the Permian Basin area. Over 300 attendees participated in the grand opening.
Pictured from left to right : Glen Townsend vice president/general manager, Kirby-Smith Machinery, Inc.; Chuck Thompson, area manager, Kirby-Smith Machinery, Inc.; Ed Kirby, president, Kirby-Smith Machinery, Inc.; Wayne Boring, Odessa Chamber of Commerce Linda Terrell, Odessa Chamber; Peggy Shumard, Odessa Chamber; Kevin Demel, territory manager, Kirby-Smith Machinery, Inc. (Background) Wayne Boring, Odessa Chamber.
Company, and Cecil I. Walker Machinery Co. recently announced that Whayne Supply and Walker Machinery have acquired from Caterpillar Global Mining LLC the Bucyrus equipment distribution and support business for their territories. Whayne Supply and Walker Machinery are authorized Cat dealers in Kentucky, southern Indiana, southeastern Ohio and portions of West Virginia. Boyd Company LLC has established Whayne-Walker Underground Mining as the business unit to meet the distribution and support needs for these new products. Titan Machinery Inc. has completed the acquisition of Falcon Power Inc., which consists of two Case construction equipment dealerships located in Phoenix and Flagstaff, Ariz. Falcon Power Inc. reported revenues of approximately $5.5 million.
Alta Equipment Company acquired Northern Michigan Equipment Company, a Case construction equipment dealer located in Traverse City, Mich. Employees of Northern Michigan Equipment will be retained, including Jeff Dohm, former owner, who will serve as Alta Equipment’s branch manager in Traverse City. The Traverse City location will be an authorized Volvo service and parts center, but parts and service will still be available for Case equipment.
Astec Industries, Inc. entered into agreements to sell its American Augers, Inc. subsidiary as well as certain assets related to the Trencor large trencher product line of Astec Underground, Inc. to The Charles Machine Works, Inc. of Perry, Okla. for approximately $55 million in cash. Not included in the sale are the American Augers vertical oil and gas drilling rig product line and the four-track surface miner product line manufactured at Astec Underground. The vertical oil and gas drill rig product line will be relocated to GEFCO, Inc., a subsidiary of Astec Industries, Inc. located in Enid, Okla. The company will continue to manufacture and expand the surface miner product line at its Astec Underground facility where it will also continue to manufacture its newly developed line of high pressure pump trailers used for fracking and well servicing.
Caterpillar Inc., Boyd Company LLC, owner of Whayne Supply
Xylem Inc., a global water technology company, has acquired
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privately held Heartland Pump Rental and Sales, Inc., headquartered in Carterville, Ill. Heartland has been a strong business partner with Godwin in dewatering pump rental, services and systems design since 1995. Godwin is part of the Xylem portfolio. Terex Construction, a business segment of Terex Corp., announced it will supply Takeuchi Manufacturing (U.S.), Ltd. with eight new models of Takeuchi branded skid-steer loaders. This agreement will provide Takeuchi with a comprehensive range of high-specification, highperformance, vertical and radial lift skid-steer loaders to complement their existing line of compact equipment. Doosan-Bobcat has selected Charter Software as one of its two preferred business system vendors for its Bobcat dealers as Navision, the software long-used by Bobcat dealers, is being phased out. Charter Software will work with Doosan-Bobcat on new e-commerce integration as well as enhancements to existing integration between the ASPEN system and Bobcat. Bobcat Company has introduced a plan for Tier 4 solutions that includes a Doosan-built non-DPF (diesel particulate filter) engine to be added to some of its equipment lineup for 2014. Development of the new Tier 4-compliant engine was a collaboration between Bobcat, Doosan and some of the world’s top engineering consultants and engine design firms — Ricardo, FEV and others. John Deere Electronic Solutions has completed construction of a 90,000 square-foot building that will provide additional office space for its growing engineering staff, test labs and enable the company to expand its power electronics capabilities.
Industry Beat
The new building will increase the company’s Fargo, N.D., footprint to more than 300,000 square feet. Constellation Software Inc. announced that Wynne Systems, Inc., a subsidiary of its wholly-owned division Volaris Group, has signed a significant contract with Volvo Rents for implementation of its RentalMan solution throughout North America. RentalMan is a fully integrated ERP solution to help manage the full lifecycle of rental management. Deere-Hitachi Construction Machinery Corporation will invest $97 million to expand manufacturing capacity at its Kernersville, N.C., operations. Deere-Hitachi expects to hire an additional 340 full-time employees over the next four years to support the expansion.
The Delaware Valley Associated Equipment Distributors (DVAED) Holds Fall Meeting
Members of the Delaware Valley Associated Equipment Distributors gathered for a fall meeting and open house at Norris Sales Company in Plymouth Meeting, Pa. on Oct. 15. Guest speaker Mark Skuby, director of risk control services for Safeguard Group, explained how to improve current safety committees, how to form a Pennsylvania safety committee and earn a 5 percent reduction in worker’s compensation costs.
Doosan Portable Power has named Roland Machinery Company, headquartered in Springfield, Ill., an authorized dealer. Roland will distribute Doosan portable and utility-mount air compressors, generators, lighting systems and light compaction equipment across a territory that includes 58 counties in Central and Eastern Missouri and 24 Southern Illinois counties. The company is also authorized to distribute Doosan portable air compressors, lighting systems, utility mount air compressors and light compaction equipment throughout the entire state of Wisconsin and 15 counties within the Upper Peninsula region of Michigan. CERF Incorporated has entered into an agreement to purchase 100 percent of the issued and outstanding shares of TRAC Energy Services Ltd., a private oilfield equipment rental company based in Nisku, Alberta. Cameron Miller and Travis Porter of Trac will continue as president and vice president Sales and Marketing, respectively. Iowa Mold Tooling Co. Inc., an Oshkosh Corporation company, has hired Glen Ashdown as the company’s new Glen Ashdown senior chief engineer. In addition, the company promoted Tim Worman to business development manager and Terry Cook to product manager of commercial products.
Tim Worman
Terry Cook
AED and the Industry Will Miss EPG’s Charlie Glass Charles Edmond Glass, born March 31, 1948, in Covington Tenn., passed away on the morning of Nov. 26 after a long battle with sarcoma cancer. He was a founding principal of EPG Insurance in Memphis in 1987. Charlie was very active in many organizations throughout his professional career and served on many boards for AED over the years. He served in the U.S. Navy and was a member of Bellevue Baptist Church in Memphis. Charlie is survived by his wife, Judy M. Glass; sons, Jason Charles (Suzanne) Glass and Justin Willis (Janna) Glass; daughter, Kathleen Glass (Bo) Burk; mother, Ruth Eubanks Glass; sister, Martha Glass Smith; and four grandchildren. The family asks that memorials may be sent in lieu of flowers to the Sarcoma Foundation of America. Helac Corporation, a manufacturer of construction equipment attachments, opened their new Eastern Region Manufacturing and Customer Service Center located in Greeneville, Tenn. Gary Anderson, manager of the new facility, will be responsible for overseeing manufacturing and operations. The new facility will reduce both manufacturing lead-time and transit time to customers. G.W. Van Keppel Company, a supplier of equipment solutions for customers in earthmoving, roadbuilding, quarrying, scrap processing and forestry, has been named a SANY hydraulic excavator dealer covering central and western Arkansas. G.W. Van Keppel Company serves equipment customers through 15 locations in five states. SANY America also named Binder Machinery Company of (continued on next page)
December 2012 | Construction Equipment Distribution | www.cedmag.com | 17
Industry Beat
South Plainfield, N.J., and Atlantic Machinery of Richmond, Va., as its first port equipment dealers. The company recently introduced container reach stackers and emptycontainer handlers for port, rail and intermodal cargo use.
Titan Machinery now offers Terex articulated and rigid trucks in its 40-plus construction equipment locations in Colorado, Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Wisconsin and Wyoming.
Tractor Service, headquartered in Albuquerque, N.M., now offers the full line of Terex compact construction equipment, including skid steers, compact track loaders, wheel loaders, excavators and loader backhoes, to professional contractors in New Mexico. Paul Farrell has been named president and chief operating officer and a director of the Modern Group. Prior to his promotion, Paul Farrell was chief Paul Farrell operating officer and previously was president of Modern Power Systems. Murphy Tractor & Equipment Co., Inc., the Deere dealer headquartered in Park City, Kan., has appointed Travis Clinesmith and
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Jason Reardon as territory sales managers. Clinesmith will be responsible for new and used heavy equipment, attachments and trailer sales in Southeast Kansas. Reardon will primarily be calling on accounts in the Wichita Metro Area, Sedgwick and surrounding counties. Chris Davis joined the company’s Omaha, Neb., branch as service manager. Fiat Industrial and CNH Global Announce Definitive Agreement to Combine Businesses Fiat Industrial S.p.A. and CNH Global N.V. announced they have entered into a definitive merger agreement to combine the businesses of Fiat Industrial and CNH. The terms provide that Fiat Industrial and CNH will each merge into a newly-formed company organized under the laws of the Netherlands (NewCo).
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Industry Beat
5HÁHFWLQJ RQ WKH %XVLQHVV Tom Lamberg (left) turned over his duties to Randy Manteufel as of Nov. 30 and will officially retire Dec. 31.
Tom Lamberg has been adapting to changing market conditions and turbulent cycles, as well as embracing innovation for more than a quarter of a century – and at the end of December he’ll transition into a new chapter: retirement. As division manager for American State Equipment’s Crushing and Screening Division Lamberg has helped make the company one of KPI-JCI and Astec Mobile Screens’ best distributors. At the end of the dealership’s fiscal year, Nov. 30, Lamberg will turn over his management duties to Randy Manteufel, who has been the aggregate specialist for American State. Lamberg will remain on till the year’s end to work closely with his successor and ensure a smooth transition. As the official retirement date of Dec. 31 draws near, Lamberg took a little time to reflect on his career, the industry, and the future. The Beginnings of a Business Born and raised in the Green Bay, Wis., area, Lamberg started his career in the parts department at Baur Truck and Equipment, an international truck dealership. As the truck market began to turn south, Lamberg felt he was “on a sinking ship” and began looking for other opportunities. At 44 years old, he switched careers and became parts manager for American State Equipment in 1986, which was looking to diversify its products and enter the crushing and screening market. In 1989, the crushing and screening division was launched, although initially there were only three people selling the Pioneer product line. In 1997, Lamberg became a division manager at American State for the business unit selling aggregate equipment in Wisconsin and the upper peninsula of Michigan. By 2003, the company had added the Johnson Crushers International (KPI-JCI) product line, and by 2008 American
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Retiring division manager at American State Equipment talks about what he’s seen and where he thinks things are going.
State was selling the entire KPI-JCI and Astec Mobile Screens product line. A Changing Market Throughout his tenure at American State, Lamberg has seen the landscape of the aggregates industry change greatly, particularly in the size of companies for producers. “When I started, there were large producers, medium producers, and the small mom-and-pop producers,” he said. “Due to regulations by the state and federal government, the small producers went by the wayside, and now it’s getting to the point where there are only large producers.” This came as a blow to distributors and the used equipment market, Lamberg said. “Before regulations forced smaller producers out of business, the large producers would buy the new equipment, and we would sell their used equipment to medium and smaller producers,” he said. “Now, you either have to go to auction or you refuse to take a trade that is too old to sell, when you used to be able to take it because you knew you could go to the small mom-and-pop producers. It has affected our business tremendously.” The effects of the regulations also spurred changes in American State’s business practices, like stocking inventory. When Lamberg started at the company, it typically invested $1.1 million in parts and inventory, and the only equipment stocked were conveyors for rental units. Today, it’s more than $10 million. “You just didn’t stock a lot of equipment on speculation because everyone bought,” Lamberg said. “But as the smaller producers went by the wayside and you had fewer customers, the market got more competitive. Our profit margins dropped from 12-15 percent to 10 percent.” (continued on page 22)
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(“Reflecting on the Business” continued from page 20)
This change, coupled with dramatic economic hits in 2001 and 2009, caused American State to adapt their business model to the changing market conditions. When the crushing and screening division was launched in 1989, 10 percent of profits came from the rental market. Today, it’s up to almost 50 percent. “In 2001, more people began renting equipment instead of buying it. That’s when our inventory really started to increase,” Lamberg said. “You were required to inventory more so you could have equipment to rent to sell. In the 2009 recession, an even bigger portion of our sales were rentals, and not necessarily rent to purchase because the banks were loaning out less money.” The increase in available rental units, particularly mobile track units, ended up being helpful to smaller contractors, who could no longer afford to purchase equipment, as well as lucrative to distributors like American State, so long as the dealership invested in maintaining the equipment, Lamberg said. “If you sell a $600,000 crusher today, we’re fighting to get 10 percent, or about $60,000,” Lamberg said. “If you take the same $600,000 piece of equipment and rent it for $25,000 a month and you can rent it for six months, then you still own the equipment and can sell it as used and you have made a lot of profit. Naturally, as a dealer we would prefer to sell it because there are costs of maintaining the equipment, but when you look at it long-term there’s enormous profit potential. The key to have a successful rental business is to maintain the equipment properly, because you’re not going to get paid if the uptime isn’t there.” Facing Challenges Just as the composition of consumers has changed, so have their expectations. Lamberg, who started his career in the pre-Internet era, said the wealth of knowledge available at the consumer’s fingertips has made for a more intensive sales process. “The Internet has made the customer smarter because he goes out and finds out all the data from every competitor, so he knows a lot more about what he’s buying, not just what the few people who are talking to him have said,” Lamberg said. Another challenge that’s developed during Lamberg’s tenure is finding ways to retain employees at the company after they had been trained. “The toughest part of managing this business is finding quality service people who want to do hard work, because believe me, working on crushers is hard work,” Lamberg said. “We rely on local technical colleges and hire
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graduates and do our own training, which is more costly,” he said, “and you always have the fear that you will get them trained and they will go elsewhere. Fortunately our company has a history of not losing people.” Indeed, American State’s employee track record is impressive. With the exception of one new mechanic, his 11-person aggregates staff has stayed with the company for at least 12 years, and some as long as 22 years. “These people have been like family to me,” he said. “I’ve had the pleasure of managing some of the best, most loyal employees. It’s been a wonderful journey.” Lamberg attributes their retention success partially to a good benefits program, but there’s more to it than that. “I think we have retained our employees because the owner has allowed me to do what I need to do to keep our people. He allows me to run this division like I own it. That’s been hugely beneficial to me.” Forecasting the Future After 26 years in the industry and serving on the KPI-JCI and Astec Mobile Screens Dealer Advisory Council from 2003-2009, Lamberg has developed a keen sense of where the future of the industry lies. He predicts equipment sales will be more competitive with more specialty product development in the next few years. “There are going to be fewer and fewer customers because of mergers and buyouts, which is going to make the market even more competitive,” he said. “We’re also going to see more specialty products developed to accommodate specialized markets like the fractionated sand industry, just like we saw with RAP (reclaimed asphalt pavement) a few years ago.” Lamberg says from his perspective in the Wisconisn aggregates machinery business, the election results were “a major disappointment,” and expressed his concerns about near-term business decline and possible further bank restrictions that will curtail customers’ ability to borrow for equipment purchasing. And then there’s the uncertainty about federal highway funding. “I really hope that a multiyear federal highway bill gets passed, one that is longer than the current MAP-21,” he continued. “It’s critical. The extensions put customers in a situation where they can’t predict their future, and they’re less likely to buy products that are going to last them 10 to 15 years. If we see a four or five-year highway bill passed, we are going to see the customers who have been making a good profit buy more equipment, because they know the money is going to be there. Sooner or later, our politicians are going to have to realize that if they don’t do something with the infrastructure in this country, the future of the country isn’t going to go anywhere.”
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Play It Safe
Raise the Standard of Your Forklift Safety and Compliance Program What your employees don’t know could really hurt them. BY RANDY DOMBROWSKI
Forklifts (or “powered industrial trucks” as described by OSHA) come in a variety of styles depending on intended purpose and operating environment. What is consistent across all uses is the need for a clear understanding of forklift capabilities and safety training for operators. Far too many operators are killed or seriously injured annually from forklift-related accidents. Although many factors contribute to these mishaps, two of the most common are inadequate operator training and improperly modified forklifts. So why are these preventable issues resulting in fatal accidents? Let’s review the following scenario that is based on an actual event: A salesperson was using a sitdown-type forklift to move equipment attachments on display outside to a storage warehouse. While navigating an inclined ramp to enter the
warehouse, the load shifted, causing the forklift to begin tipping to its side. The salesperson attempted to jump from the tipping forklift and was killed when the overhead guard pinned him to the ground. He was not wearing the seat belt and was previously trained but inexperienced. A follow-up investigation by state officials determined the forklift had illegally modified forks and overall was in need of repair. A subsequent lawsuit by the estate of the salesperson was settled for $2.5 million. Issues and Risks The investigation into this case identified several issues. Service personnel modified the fork ends by drilling holes so a hitch-ball assembly could be used as well as steel pins for “hoisting” items with chains. Use of this modification caused one of the forks to bend downward over
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time and slightly offset the balance of the load’s center of gravity. Also, training deficiencies were found – the salesperson did complete initial operator training during his new hire orientation five years prior but received no refresher training. He was an infrequent user of the forklift and his inexperience and lack of ongoing training were contributors to the accident. Prevention Strategies To help prevent accidents similar to this scenario, your dealership should implement the following practices when establishing forklift operation guidelines: Ensure that appropriate operator training is provided before an employee is allowed to operate. Specific training needs to include loading, seatbelt use, handling/ operation principles of the specific
Play It Safe
types of forklifts used, alarms, maintenance, etc. Also, refresher training is needed for all operators at least every three years. Last, you should document a performance skills evaluation including your observations that the operator can safely apply the classroom principles for safe operation. Do not allow makeshift attachments or modifications on forklifts without first receiving written authorization from the manufacturer or a qualified engineer. Often, there are approved attachments (i.e. hoisting and hitch clamps) for sale that slide onto the forks and can correctly and safely distribute the load, reducing accident potential. Management staff should be held accountable for active enforcement of the dealership’s forklift safety guidelines. These guidelines should include only allowing authorized employees to operate the forklifts,
conducting daily inspections of each device and determine equipment condition/suitability. Last, employees observed operating a forklift in an unsafe manner should be reprimanded and retrained prior to being allowed to operate again. Forklifts are so common in the workplace that their complexity of operation is often disregarded – a crucial mistake. You need a safety training program in place that provides the critical knowledge of safe operation and best practices, along with keeping your dealership in compliance with regulatory standards. Today, there is an abundance of resources available to train your operators, including online safety training, PowerPoint presentations for purchase, and other Internet resources, which in many cases are free of charge. Be sure you review all content for accuracy and that they meet the needs of your operators.
Also, many of these resources are available in other languages to ensure any operator fully understands the content and safety principles. This document is made available by Sentry Insurance a Mutual Company and its subsidiaries and affiliates (collectively “SIAMCO”) with the understanding that SIAMCO is not engaged in the practice of law, nor is it rendering legal advice. The information contained in this document is of a general nature and is not intended to address the circumstances of any particular individual or entity, nor the best practices applicable to any particular individual or entity. Legal obligations may vary by state and locality, and best practices are unique to specific items and situations. No one should act on the information contained in this document without advice from a local professional with relevant expertise. As the endorsed P&C carrier for the AED, Sentry Insurance offers superior coverage options and services to meet your dealership needs. Randy Dombrowski is Sentry’s lead account executive responsible for maintaining the AED/Sentry relationship.
RANDY DOMBROWSKI is an account executive for Sentry Insurance – a provider of Property & Casualty coverages for the dealership industry. You can reach Randy at randy.dombrowski@ sentry.com with any questions.
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Current Events
Dealers Dive In To Help Sandy-Struck Region Short-term, Huber-charged rental and sales activity could settle in to a long-term negative for the industry. BY KIM PHELAN
Mobilizing resources to help customers and communities in a crisis is something dealers do best – which is why one of the most frustrating immediate outcomes of Hurricane/Superstorm Sandy were, for some New York- and New Jersey-area dealers, the debilitating challenges of communication disruptions and fuel shortages. For example, at Tim Watters’ Hoffman Equipment, a multiline crane and heavy equipment distributor headquartered in Piscataway, N.J., running out of diesel fuel for service trucks had the company resorting to siphoning fuel out of machines in order to keep service vehicles dispatched. “That’s when we really started begging for [our fuel provider] to come by,” said Watters, an AED officer slated to be chairman in 2014. “Finally after four phone calls of begging he brought fuel to us. The bigger problem was our employees trying to get to work who had no fuel in their cars. Our fuel provider felt so bad for delaying our diesel delivery that one day he send a gas truck in here loaded with fuel and he let all our employees fill up their cars – and that was a relief for everybody! It was probably the best perk everyone got all year.” Damage at Hoffman Equipment’s main office was minor, says Watters; not exceeding $10,000 he estimates, caused by a tree blown down on a fence. And with the exception of his Marlboro, N.Y., branch, his facilities all retained power and reopened Tuesday morning at 7 after the storm passed through the previous night. “There were pockets of neighborhoods that had power and by some stroke of good fortune our company [headquarters] was in one of those pockets,” said Watters. “But four hours 26 | www.cedmag.com | Construction Equipment Distribution | December 2012
from where the storm came ashore people were still losing power – it shows you the extent and range of the storm.” Loss of Internet and e-mail access was the more crippling issue during the first week following Sandy. For Hoffman Equipment, Internet comes through cable, Watters said, so the company was without it till Friday that week. Thanks to good fortune and good emergency backup planning, the lights and Internet were on for all 10 of Modern Group’s locations across eastern Pennsylvania, New Jersey and Delaware, but Chairman Dave Griffith says that cellular communication was the biggest challenge with which the company wrestled in the storm’s aftermath. A forklift, power and equipment dealership based in Bristol, Pa., Modern Group runs on MobileFrame, says Griffith, which is dependent on an Internet wireless solution; Modern patched their problem by distributing mobile hot cards to staff, but the company will be evaluating how to solve the issue longterm, perhaps with radio backup. “We don’t have an answer yet, “ said Griffith. Help Thy Neighbor Extensive as Modern’s inventory is, the needs have been great and unceasing. Griffith says the company has experienced an outpouring of equipment-to-the rescue from other dealers to the tune of 180 forklifts. “Literally I was able to call down and overnight had rental trucks coming at me from Ohio, from New England, from Virginia; they literally rolled in overnight,” said Griffith. He added that Modern has been dropping generators to competitors, as well, and sent fleet to other regions
Photo courtesy of H.O Penn.
Blown Away:
Current Events
during times of emergency. As you’d expect, the products in greatest demand are generators, chippers, forklifts, skid-steers and loaders. The rental business for anyone near the scene is at euphoria levels, not that anyone’s gloating about it. Hoffman Equipment is tracking at 35-40 percent for rentals attributed to cleanup; Modern was going 24/7 round the clock on rental and sold two million portable power units in a week. Some 1,700 miles away in San Antonio, Holt Cat was among numerous Cat dealers around the U.S. that mobilized to help provide power to Sandy-struck regions. Holt’s national response team deployed power generators and service technicians to New York and New Jersey, restoring temporary and permanent power in the areas. The company has also sold and rented more than 40 dewatering pumps and 100 light towers. Closer to the devastation, H.O. Penn, the Cat dealer based in Poughkeepsie, N.Y., kept its rental operation working through the weekend to get generator sets out to customers, reporting its entire inventory of 145 gen sets all on rent as of Oct. 30. The company deployed technicians onsite at 23 customer locations to provide round-the-clock support, as well. “The demand for rental of heavy Caterpillar equipment has also increased as the cleanup and the infrastructure restoration process begins,” said President of H.O. Penn Jeff Mitchell. “Impacts were pretty widespread,” he added. “A number of our employees had damage to homes, in varying degrees. Due to flooding in lower Manhattan, our phone service was
Creative Kindness While donations of money are vital to meet the widest swath of need in a crisis, the management of Modern Group understands that people also like to give tangible, more personal things to help victims of disasters. And so, in cooperation with its manufacturing partners Bandit, Hyster, Generac and Terex, the company launched its “Sock It To Sandy” campaign to collect new socks, new hats and new gloves, which will be distributed quickly to those in need by The Salvation Army. The Modern Group Edison, N.J. branch, which is nearby the New Jersey Shore, one of the hardest hit regions, will serve as its “Sock It To Sandy” headquarters. In a letter to customers, employees and suppliers, Modern Group President Paul Ferrell said, “As the weather turns colder and the days since the storm increase, the devastation of the impact of Sandy multiplies. The outpouring of kindness has been phenomenal. Relief efforts from throughout the nation are helping restore power little by little, but the cleanup will take months and years. In the meanwhile, thousands are still without basic electricity and heat.” The company collected donations through Nov. 26 as CED was going to press.
disrupted in two of our branches. We had to quickly develop work-arounds to overcome the problem it created so we could continue to take care of our customers.” Wind-related tree damage has been “unbelievable,” says Griffith. And the lingering, debilitating loss of power on residents and businesses could continue till mid-December, he said. “The generator business is going to be white hot for months.” Equipment replacement is kicking in, as dealers are witnessing just how many customers suffered damage or total loss to machinery left too close to the shores. “I’m a little surprised customers didn’t pull equipment back from the water, but I think it caught a lot of people by surprise,” Griffith added. Sad Truths Watters relayed that a customer in Breezy Point, N.Y., a particularly devastated neighborhood in Queens, lost his home, as did his son who works with him and another employee; nevertheless they purchased four machines to do storm cleanup work in their community. “There are a lot of homes that will need to be taken down,” said Watters. “There’s some demolition work for sure that’s going to happen, but the flip side of that story is all the people in those homes that are going to be displaced, all the low-lying areas of New Jersey, where hundreds of thousands of people live right near the water. I don’t know what the numbers are, but there are thousands of homes that are destroyed. “It’s not like the kinds of dramatic things that are good for a picture, but they’ve all had four or five feet of water in them, and even more, on the first floor, so they’re just destroyed. They think they’re drying them out but they’re all being condemned; they have to come down,” Watters said. Griffith estimates the demolition work alone could go on for six months to a year. “Was it flood? Was it wind? We’re going to learn a lot about flood insurance,” he predicted grimly. “I’m concerned that some companies won’t open.” Ken Simonson, chief economist at Associated General Contractors of America (AGC), echoed that probability, adding that it will also take time for insurance proceeds to be parlayed into construction. “A number of businesses will not reopen,” Simonson said, “and other businesses that were ready to expand or occupy new space and trigger investment by developers, they’re going to postpone or cancel those plans. “And similarly with homeowners – while it is relatively easy to count the number of homes that were destroyed or will have to be demolished, that doesn’t necessarily translate into one-for-one replacement,” Simonson continued. “The net impact, therefore, on the construction industry, even within the region, will be small, and measured over a longer period of time, negative. I think any time you get massive destruction of wealth of any type you’re going to be slowing down economic activity – and with that, construction activity.” December 2012 | Construction Equipment Distribution | www.cedmag.com | 27
Business Considerations of Field Service Trucks
Service ROI
Don’t Spec Till <RX 5HÁHFW
Like you would do with any well-planned investment, identify your business objectives first, then choose the size and features that match your plan and service environments. BY BRUCE BUNTING
What is your personal view point of field service? Do you see it a necessary evil or as a strategic asset that projects your dealership’s brand image? The field service department should be providing a vital revenue stream to the bottom line of a modern heavy equipment dealership. In today’s heavy equipment operating environment, customers demand an ever-increasing level of machine uptime, and because of this it is vital that a dealer’s field service department be able to respond quickly. In order to meet these demands head on, an effective and efficient field service fleet is required. The Dynamics of Change Keeping your field service trucks efficient and profitable is a moving target. Reviewing and monitoring the specifications of these trucks has to be an ongoing process – just like a successful investor has to continually review and track his or her investments within a portfolio in order to achieve a set of financial goals. Today, most dealers are being required by their customers to provide products and services that were unheard of less than a decade ago. Some dealers are already ahead of the curve by either taking on additional product lines or acquiring a “bolt on” company that potentially has customers in common within the existing dealership. In either case, this should create new field service revenue-generating opportunities, but it can also provide a way to extend the useful life of existing late model field service trucks that are in your fleet. In addition to changing business models, we as an industry, are faced with end-user consolidation, which has 28 | www.cedmag.com | Construction Equipment Distribution | December 2012
seemingly overnight increased the territory coverage size the dealers have to cover. What is your strategy to turn this challenge into a profitable opportunity? The caretakers that have spec’d and purchased your field service trucks for the past 25 to 30 years are retiring at a very high rate and leaving in their departing wake a knowledge and experience vacuum. This is happening across the country every day, and if you are not currently dealing with it you will be. Even in the recent past, replacing this position was fairly simple – everyone just rotated a senior field mechanic into this position and they brought with them the vast years of field experience and insight as to what and how a field service truck should be spec’d and operated. This process is no longer working due to the increasing shortage of qualified field service mechanics. As a result, there are very intelligent young men and women being recruited into these positions with strong academic skills and a higher level of comfort with technology than their predecessors. However, what they typically don’t possess is the application knowledge of what field service trucks do and what size truck is suited for which task. More and more I am encountering situations where I am doing a lot of explaining about how or why a specific size air compressor or crane is required for some applications. I believe that is my job to know my customers’ field service needs inside and out, so that I can provide an accurate and updated specification. No Such Thing as ‘One Size Fits All’ One the most frequent questions that I have been asked over
Service ROI
the years is “can you build me a truck that covers everything I need?” The answer is unfortunately a resounding no, but this is a great place to apply the 80/20 rule. I do believe that if we focus the efforts to become as productive as possible on the primary work that is performed most often in the field each and every day, the overall productivity of the field service truck will improve or at the very least remain constant. So even though there isn’t a one-size-fits-all design, I firmly believe that with performance measuring and consistent reviews you can improve the overall efficiency of service trucks. How many times are you, as an owner or decision making principal, reviewing things like: health insurance, phone plans or uniform cost? Are you reviewing your field service fleet performance with the same level of attention? Complaining when it is budget time once a year that field service trucks are too expense does not constitute a review. So Why All The Questions? When I meet with a heavy equipment dealer customer I ask a lot of questions, regardless if it is a new client or an existing one. Here are things that I frequently ask: What is your cost structure for field service trucks? Are you setting realistic goals and expectations for the field service trucks? Are you setting realistic goals and expectations for the field service department? What is the current expected life of your field service trucks? What method is applied as the guideline to determine when trucks get replaced? Unlike other commercial vehicles, field service trucks are unique, such that a truck might only have 90,000 miles in seven years but has 22,000 hours of engine time. All field service trucks will reach a point when they are “consuming” a higher percentage of the profit to the point that it is no longer feasible to operate them. Remember, the field service trucks have to be a profit center. Do not view your trucks the same way that some of your end-users do. To an end-user, the field service truck is a dead cost item so they are looking to keep it for a much longer period of time. The factors that determine where this point is for a company will vary slightly based on truck size and the severity of the terrain in which the service truck operates. If you are not tracking and reviewing your operational cost, either per mile or per hour and monitoring the trends, you will never know accurately when the replacement needs to occur. By carefully tracking this information you should be able to make scheduled replacements of the field service trucks rather than waiting until a truck has failed and then having to make an unplanned, last-minute purchase. Keep in mind that what is really happening here is that you, the dealer, are putting out investment capital, which in turn has to provide you with an ROI, and just like any successful financial advisor, field service truck sales people like me need all your goals and objectives in order to provide
you with the maximum return on your truck investment. The process of purchasing field service trucks is no longer just about “bigger and faster” field service trucks – it is about integrating technology and systems that provide information back to a dealer in real time. I recommend careful consideration of the many aspects of your field service business and the goals you have for the coming year. From there, you and your manufacturer can custom spec the trucks for the correct applications, so they can work hard for your money. $GGLWLRQDO 7KRXJKWV $ERXW 3URÀWDEOH )LHOG 6HUYLFH Do you incentivize the economical operation of your field service truck, for example, to achieve lower idle times? I know of one dealer location that provided additional tool allowances to technicians for lowered idle times, and it has been a great success. It is without a doubt more effective than simply imposing a zero-idle rule that can have a very negative impact on your retention rate for field service mechanics. My experience has been that when you engage field personnel in the field service truck specifications process it will greatly increase the success of your end result – whether it is inviting and incorporating their new ideas or simply changing an existing component on their recommendation. Over the years, I have found that field personnel can often times point out an issue that is causing them lost time, and it can be as simple as moving a bolt bin into a different compartment. Field mechanics spend so much time with their truck that they surely know the strengths and weaknesses of the field service truck better than anyone else. Also, I believe that your field service mechanics’ personal safety is of the utmost concern, and so I’m convinced that productivity and safety go hand in hand. As your business grows shouldn’t your field service trucks evolve and be a reflection of that growth? Lastly, always remember that your field service fleet functions as a rolling bill board. So ask yourself, “Are my trucks an accurate and positive reflection of my dealership? Do my trucks look like well-organized and productive units or do they look like chaos on wheels? Sometimes, just increasing side height of a service truck will provide internal storage required to eliminate the topside “gypsy wagon” look that detracts from a positive image. A lot should go into the design of an optimally functioning service truck – I hope I’ve give you some good food for thought. BRUCE BUNTING grew up in a family business that sold, serviced and operated heavy equipment. He learned firsthand about the business side of heavy equipment field service and how important it is to the dealer and their customers. Today he is the Knapheide Manufacturing Industrial Products Specialist. December 2012 | Construction Equipment Distribution | www.cedmag.com | 29
Las Vegas Revs Up for a Comeback A snapshot of market conditions in the host city of the AED Summit next month: With the Great Recession fresh in their memory, local dealers adjust to a new economy. BY JOANNE COSTIN
Demolition work on the I-15 West Mesquite Interchange project in Mequite, Nev. about 30 minutes northeast of Las Vegas. With accelerated bridge construction the project was completed in 56 hours.
The bigger they are, the harder they fall. This proved true for the modern boom town of Las Vegas, Nev. Once the fastest growing metro area in the country, the Great Recession hit Vegas with hurricane force, taking tourism, construction, and housing down, along with many other businesses. Seemingly overnight, the city went from leading the nation in population growth and construction spending, to leading in unemployment and foreclosures. Attracted by good weather, low taxes, inexpensive housing and a growing economy, Nevada’s population grew by more than 36 percent from 2000-2011, during which time the state added more than a million new residents. At its peak, construction spending in Las Vegas was $16 billion, fueled by the huge casino construction projects and residential construction. The state has lost nearly 100,000 construction jobs since 2006, with only 48,200 construction jobs remaining as of September 2012, according to the Associated General Contractors of America (AGC). With the state in a budget crunch, public construction spending has also slowed and planned projects such as a new airport have been postponed. According to a 2011 report, Nevada Industry and Competitiveness Analysis – Identification of Industry Opportunities, by SRI International, while Nevada’s dependence on consumption-based industries (primarily tourism/ gaming, construction, and retail) served the state well 30 | www.cedmag.com | Construction Equipment Distribution | December 2012
during an economic boom, it also contributed to excessive volatility and devastating job losses. Gaming taxes account for 34 percent of general fund tax revenues and the service sector employs about half of Nevada’s workers. Visitor traffic bottomed in 2009 at 36 million, off a peak of 39.2 million in 2007. While the total number of visitors bounced back to near the peak numbers in 2011, gaming revenues are still far down off their high. And the convention business has struggled to come back – in 2011, the number of convention delegates was still down more by more than 1.4 million off of its peak. Meanwhile, hotel room capacity has continued to expand, keeping hotel room occupancy levels well below the peak levels of 2007. Diversity Helps Dealers Weather the Recession Fortunately for many Las Vegas construction equipment dealers, activity in the mining sector has helped offset the decline in general construction activity. Nevada is the nation’s leading producer of gold, barite, and lithium. Copper, diatomite, dolomite, and other minerals are also extracted. According to Mike Pack, president and COO of Cashman Equipment, Nevada’s Caterpillar dealer, the base of their business has completely shifted since the recession began. “If you wind back the clock to 2006, about 50 (continued on page 32)
Photo Credit: Julie Duewel, NDOT photographer
Markets
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Markets
(“Las Vegas Revs Up for a Comeback” continued from page 30)
percent of our business was construction and 50 percent mining,” he said. “That has completely changed. Today, a significant part of our business is mining related, while construction is making a slow, but steady increase.” As gold prices have risen, so too has the activity in the mining sector. Pack expects construction spending within the mines to top $500 million this year as companies such as Newmont Mining and Barrick Gold build leach pads, dams, tailings, roads, and other infrastructure. “That’s bigger than our highway program,” said Pack. “Many of the guys that used to build highways are working in the mines.” Mining machines are big ticket items. Cashman Equipment and Caterpillar recently sold three rope shovels to Allied Nevada Gold Corp. that can cost upward of $30 million each. To better serve its mining customers, Cashman Equipment invested in a $20 million expansion of its Elko, Nev., service facilities, which will be open by the end of the year. Other dealers haven’t had the luxury of a diversified customer base – an alternative is to diversify geographically. For example, APCO Equipment, a single-location dealer in North Las Vegas that represents Link-Belt, Kubota, Kawasaki, and Wacker among others, has its fortunes tied to the local construction market, in particular highways and housing. After dropping from 65 employees to 19 since the peak, the company’s president, Dallas Moyer, says they’re ready to expand again; but not in Las Vegas yet. The company will soon be opening a second branch, 1,300 miles away, in Willingston, N.D., where the oil and gas boom promises opportunity. Lessons Learned from the Great Recession APCO Equipment and Cashman Equipment survived because they did what they had to do. They cut to where the business could support itself. “I have been doing this for 32 years and I have never experienced anything like the recession we had here in Vegas,” said Moyer. “We had to
A Cat 795F AC Electric Drive Haul Truck works in Northern Nevada. Mining accounts for a growing portion of Cashman Equipment’s business.
32 | www.cedmag.com | Construction Equipment Distribution | December 2012
lay off a lot of people, and it hurt.” Early action helped dealers weather the storm. “We were very aggressive with cost control structure when we first saw signs that the market was dipping,” said Pack. “We shed inventory quicker than most and streamlined every department.” “We are careful to run a diversified business,” Pack added. “Even within mining, we like to be diversified. Even if gold takes a major dive, we still have a mining business in place.” Cashman Equipment stresses the cyclical nature of their business to all of its employees. “We want to run this business, whether we are on the uptick or the downtick, the same way,” said Pack. “We know a recession is coming, we just don’t know when.” The New Economy “I think we finally hit bottom,” said Moyer, “but I feel what we see here in Vegas is what we’ve got.” He’s not expecting any kind of boom. While things may not come roaring back, Las Vegas dealers are seeing improvements. Leading the way is the housing market. “It is true we are building houses now in Las Vegas,” said Pack. “There are new subdivisions going in. There are subdivisions that were on hold that are now returning.” AGC statistics back up dealer observations. Through September, building permits for single-family homes are up 56 percent versus 2011. Annual new home starts are up 46 percent over Q3 2011. Positive annual job growth is one reason for the uptick. From January to September 2012, 5,100 jobs were added to the Las Vegas economy. According to Metrostudy.com, big gains in leisure services, education, health, and retail trade have offset losses in construction, real estate and government. Overall employment is up nearly 2 percent from January. Pack explained how cash investors are making it impossible for people to purchase a short sale, a lenderapproved sale for less than the principal balance. A recent article in the Las Vegas Journal reported that cash buyers accounted for 54.1 percent of October home sales. Real (continued on page 34)
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Markets
(“Las Vegas Revs Up for a Comeback” continued from page 32)
estate-owned (REO), or bank-owned sales dropped to 11.6 percent of the market. Just a couple of years ago, REOs were nearly half of all sales. “Fewer foreclosures and an influx of cash buyers for short sale properties are driving new construction,” said Pack. On the public construction front, Nevada’s state government has had to contend with declining tax revenues and a huge budget deficit. The Center on Budget and State Policy Priorities estimated Nevada’s deficit at 1.2 billion or 37 percent of the fiscal 2012 budget. The public sector market has also slowed down. Scheduled to begin in 2013 is the $55-$75 million second phase of improvements to the I-15 North Corridor between US 95 and Apex Interchange. Many projects listed on the DOT website have been delayed or are underfunded. For example, a $493 million, 12-mile, U.S. 92/U.S. 95 Boulder Bypass project requires additional federal, state and local
312 Out of 337
Las Vegas ranked 312 out of 337 metro markets in construction employment growth. As of September 2012, it had lost 3,400 jobs in the past 12 months, down 9 percent for the year.
funding to proceed. By 2016, the DOT expects to have a $5.3- $6.2 billion shortfall of funds to complete projects. Las Vegas dealers agree that the lack of a long-term (five-year) highway bill will keep contractors renting more and purchasing less. “Those that lived through the recession aren’t going to forget it,” said Pack. “Until you get into five-year bills where contractors can see a future, they are not buying. They will rent.” The Rental Trend Cost to own equipment is risky when the project horizon is unclear. “When there is no continuity of work, you almost have to look to rental,” said Pack. One customer of Cashman Equipment is looking at moving completely to rental. Moyer, too, has seen rental rates rise and utilization pick up recently. He plans to buy more equipment after the first of the year. While Cashman’s rental business has also increased, it is very cautious about adding to the rental fleet. “Our utilization is high, but cautious optimism doesn’t lead us to want to buy more,” said Pack. While the recession led APCO to expand geographically, Cashman Equipment’s strategy is to focus tightly on what it knows best. As a result, it is in the process of liquidating their investment in a line of trenching equipment. “We are making sure we are giving as much value as we can to
Please visit us in CONDEX Booth 714. 34 | www.cedmag.com | Construction Equipment Distribution | December 2012
Markets
those customers we have and earning as much business as we can,” explained Pack. As the market returns, Moyer is concerned about getting customers financed. “Financials aren’t going to be strong. Finding lenders is going to be a challenge,” said Moyer. In the long term, dealers are optimistic that Vegas will come back, while recognizing that it won’t be swift. “We have fallen so far,” said Moyer. “I think it’s going to take us a while to climb out of this.” Keys to Long-Term Growth Looking back on the factors that drove Vegas growth in the past provides reason for optimism for Pack. The weather, the taxes, no state income tax, low-cost housing, and economical entertainment brought continued population growth in previous decades. “We now have all those factors back in play,” he said. However, AGC economist Ken Simonson recently called the Las Vegas recovery “fragmented and fragile” when speaking at the Construction Financial Management Conference held in Las Vegas this past October. Like the SRI International report, Simonson said it was imperative for Las Vegas to broaden its economic base, even if people return to gambling at levels prior to the recession. He cited increasing competition within the gambling industry, as
more states approve legalized gambling. “Job gains in the coming years are likely to come from a broad cross-section of industries, and Nevada needs to think strategically about how it can cultivate these new industries – simultaneously building off of its traditional economic strengths and pivoting toward new highpotential drivers of growth,” said the report. New target areas for growth include health and medical services; business IT ecosystems; clean energy opportunities such as solar and geothermal development; mining, materials and manufacturing; logistics and operations; as well as aerospace and defense. With a pro-business environment, low taxes, proximity to West Coast population centers and rich natural resources, one probably shouldn’t bet against a Vegas comeback. The city and in particular its construction-related businesses, have shown great determination and resilience in the face of a disastrous downturn. And from what these Las Vegas construction equipment dealers have told us, they’re all in. JOANNE COSTIN is a freelance writer and marketing consultant focusing on the construction industry. She can be reached at (847) 358-1413 or jcostin@costincustom.com.
December 2012 | Construction Equipment Distribution | www.cedmag.com | 35
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Join us at AED for a toast to future success. Make your appointment to meet with us at AED 2013 and enjoy a single-malt scotch tasting. You’ll learn more about our recent joint ventures with Cummins and ZF; our heritage of providing quality, cost-efficient machines since 1958; and how our $3 billion company is ready to support qualified dealers interested in profitably growing their business. Suite 2872 of the Las Vegas Hotel & Casino. Call 908-459-0101 x.12 to make your appointment. Please visit us in Suite 2872 East Tower.
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Poli Po Politics liitiics cs
AED’s fingerprints were evident all over this year’s hard-fought election, and the impact of the association’s efforts will prove far from futile. In fact, a record-breaking year for AED PAC has further enhanced the equipment industry’s political profile, positioning us for both immediate influence – and in 2014. BY CHRISTIAN A. KLEIN
By now, almost everything that can be said about the 2012 elections has been. The results maintained the status quo: Obama’s still in the White House, Democrats are still running the Senate (with a couple extra seats), and Republicans are still in control of the House of Representatives (with a handful fewer seats). But the story you might not have heard is the role AED’s political action committee (AED PAC) played during this election cycle. Thanks to the participation and support from equipment leaders around the country, we broke all prior records for AED’s political program. In addition to supporting House candidates from around the country,
AED played a more visible role than ever before in several of the most competitive Senate races and, for the first time, was intimately involved in the presidential race. Not every race turned out the way we wanted, but thanks to member engagement and our PAC activities, the industry’s political profile grew significantly this year. Because AED was so visible during the elections, candidates have a better understanding of our industry than ever before. That means the association will be well positioned to represent your interests in the next Congress. All told, more than 80 percent of the congressional candidates AED PAC supported in the general election won
The Man Who Would Be Chairman: A Snapshot Of Rep. Bill Shuster As planning for the 113th Congress gets underway, Rep. Bill Shuster (R-Pa.) has emerged as a top candidate for chairmanship of the House Transportation & Infrastructure Committee. The current chairman of T&I’s Subcommittee on Railroads, Pipelines, and Hazardous material, Shuster easily won re-election this year to his sixth term representing Pennsylvania’s 9th District. He is a close ally of Speaker John Boehner (R-Ohio) and emerged as an important player during the MAP-21 debate. Shuster has said that if he becomes chairman, transportation investment will be a top priority and that he won’t be afraid to think outside the box about how to pay for it. Transportation policy is in Shuster’s blood. Many of our readers may remember that his father, Rep. Bud Shuster, was chairman of the T&I Committee during the glory days of the 1990s when federal highway investment increased dramatically. The elder Shuster took a no-holds-barred approach to legislating. Though a Republican, he worked well with Democratic members of his committee and rolled his own party’s leadership on occasion by building bipartisan coalitions. The current Rep. Shuster is regarded as somewhat more low-key and less willing to ruffle feathers. How he’ll conduct himself when/if he becomes chairman remains to be seen. (continued on page 40) 38 | www.cedmag.com | Construction Equipment Distribution | December 2012
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Politics
(“An Indelible Mark” continued from page 38)
(see sidebar with the full scorecard). Perhaps most significantly, of the 40 House incumbents we supported, only three lost. Given the volatility this election cycle and the number of competitive races into which we waded, that’s a pretty good track record. Our PAC contribution strategy this cycle was the same as in past years: We focused on candidates who shared our views on infrastructure, tax, and regulatory issues and who are influential in one or more of those areas. We don’t agree with all the candidates we supported on every issue, but if you look at our list you’ll see people with a demonstrated ability to govern and a willingness to engage in a mature dialogue about the industry’s policy priorities. AED PAC also doesn’t make its giving decisions in a vacuum. With very few exceptions, the candidates we supported this cycle had relationships in their home states and districts with AED members. The majority of our PAC support was delivered at ImPACt 2012 meetings between local distributors and candidates. Even if all our candidates didn’t win, having a member-driven political program is something we don’t plan to change going into the next election cycle. We think actively engaging our members in the candidate selection process is the key to a strong grassroots network and one of the reasons that AED has been so successful on the Hill in recent years. With all that said, here are some of things AED PAC accomplished during 2011-2012 election cycle thanks to our members’ stepped-up engagement: AED members contributed $90,075 to AED PAC in 2012, blowing the away the previous one-year record (set in 2008) by $30,975. AED members contributed $143,125 during the 20112012 election cycle, $35,475 more than previous record set
Rep. Chris Gibson (R-N.Y.) visits Hoffman Equipment’s Marlboro, N.Y., facility in June 2012 for an AED ImPACt event.
Rep. Patrick Meehan (R-Pa.) attends an ImPACt event at Stephenson Equipment’s Prospect Park facility in August 2012.
Vermeer MidSouth’s Springdale, Ark., location welcomed Rep. Steve Womack (R-Ark.) for an AED ImPACt event in June 2011.
(continued on page 43)
AED Legislative Priorities For the 113th Congress
Completing an overhaul of the tax code that restores certainty and doesn’t discriminate against taxpayers based on income level Enacting a long-term highway bill with new revenue sources to support investment needs Ensuring water infrastructure is adequately funded through the Clean Water and Drinking Water State Revolving Fund programs and encouraging private investment Expanding energy production and ensure that shale energy development is allowed to continue unfettered by burdensome regulations Protecting LIFO Shielding equipment distributors from harmful and unnecessary regulations Putting the federal government’s fiscal house in order
40 | www.cedmag.com | Construction Equipment Distribution | December 2012
Gary Grady of West Virginia Tractor Co. presents an AED PAC check in August 2012 to Rep. Nick J. Rahall (D-W.V.), the top Democrat on the House Transportation & Infrastructure Committee. Gov. Mitt Romney’s presidential campaign held a rally at AED member Carter Machinery’s Abingdon, Va., facility on Friday, Oct. 5, to deliver a strong message in support of the coal industry.
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Here We Go Again
Politics
Local Infrastructure Ballot Initiatives Several state and local measures across the country went before voters this past election to help supplement the federal funding shortfalls in surface and water infrastructure investment.
Location
Measure
Summary
Memphis, Tenn.
Gas Tax
A 1 cent per gallon gas tax increase to support the Memphis Area Transit Authority
7
Arizona
Sales Tax
A permanent 1 cent sales tax increase, with 10 percent for highway projects
7
Arkansas
Sales Tax
A half-cent sales tax increase to fund $1.8 billion in highway improvements over ten years
5
Harris County, Texas
Sales Tax
An extension of the current diversion of 25 percent of Metro’s one cent sales tax for construction and maintenance of surface transportation
7
Alameda County, Calif. Los Angeles County, Calif.
Sales Tax
Sales Tax
A half-cent sales tax increase to raise $7.8 billion over 30 years for transit, road, bicycle, and pedestrian projects A 30-year extension of a half-cent sales tax for infrastructure projects
Result
7 7
Sales Tax
A half-cent increase for infrastructure projects and repairs
5
Alachua County, Fla.
Sales Tax
A three-quarter cent, 15-year sales tax for transportation
7
A one-half percent sales tax increase for regional transportation investment
5
Richland County, S.C.
Sales Tax Sales Tax
A 1 cent increase to fund improving roads, support the bus system, and increase bike and pedestrian greenways
5
Alaska
Bond
A $453.5 million bond to pay for state transportation projects
5
Arlington County, Va.
Bond
A $31.95 million bond to support capital projects for the Washington Metropolitan Area Transit Authority and other transit, pedestrians, and road projects
5
A $51.5 million bond for improvements to highways and bridges, local roads, airports, port facilities, and transit
5
Bond (Water)
A $7.925 bond issue expended over two years for revolving loan funds for drinking water systems and wastewater treatment facilities
5
Bond (Water)
An amendment to the state constitution to allow the Oklahoma Water Resources Board to issue up to $300 million in bonds for certain water resources and sewage treatment programs
5
Authorized the state to issue bonds up to $12 million to finance wastewater infrastructure and $8 million for drinking water infrastructure projects
5
Non-binding referendum on whether to extend light rail into the city
5
Maine
Maine
Oklahoma
Rhode Island
Virginia Beach, Va.
Bond
Bond (Water)
Referendum
42 | www.cedmag.com | Construction Equipment Distribution | December 2012
Senate Seats Up For Election In 2014 Senator
Half Moon Bay, Calif.
Orange County, N.C.
With the 2012 election behind us, it’s time to take a look at what the political landscape holds for 2014. One-third of the Senate will again be up for grabs, and the Democrats again face a far more perilous path to the majority than do Republicans. Democrats hold 20 of the 33 seats up for re-election. Of those, just six are considered safe. On the GOP side, all 13 of the seats the party must defend are in typically Republican-friendly states.
Party State
Mark Begich
D
AK
Jeff Sessions
R
AL
Mark Pryor
D
AR
Mark Udall
D
CO
Christopher Coons
D
DE
Saxby Chambliss
R
GA
Tom Harkin
D
IA
James Risch
R
ID
Richard Durbin
D
IL
Pat Roberts
R
KS
Mitch McConnell
R
KY
Mary Landrieu
D
LA
John Kerry
D
MA
Susan Collins
R
ME
Carl Levin
D
MI
Al Franken
D
MN
Thad Cochran
R
MS
Max Baucus
D
MT
Kay Hagan
D
NC
Mike Johanns
R
NE
Jeanne Shaheen
D
NH
Frank Lautenberg
D
NJ
Tom Udall
D
NM
James Inhofe
R
OK
Jeff Merkley
D
OR
Jack Reed
D
RI
Lindsey Graham
R
SC
Tim Johnson
D
SD
Lamar Alexander
R
TN
John Cornyn
R
TX
Mark Warner
D
VA
John Rockefeller
D
WV
Michael Enzi
R
WY
Politics
during the 2009-2010 cycle. AED PAC contributed to 52 campaigns, besting the previous record set during the 2007-2008 cycle. The average amount AED PAC contributed to each campaign rose to $2,404, $467 more than the previous record set during the 2007-2008 cycle. AED members held 29 ImPACt PAC check delivery meetings with candidates, again beating the prior record set during the 2009-2010 cycle. 64 AED members made contributions in 2012, 10 more than previous record set in 2008. 73 AED members made contributions during the 20112012 election cycle, six more than the previous record set during the 2007-2008 cycle. All AED Board members supported AED PAC for the first time ever. Owners and employees of 56 AED distributor member companies contributed to AED PAC during the 2011-2012
election cycle, representing 13.5 percent of AED’s membership. We think the heightened participation reflects a growing recognition of the impact that policy developments in Washington have on the equipment industry. In the months ahead, we’ll be dealing with a number of issues that affect your markets and costs of doing business. We’re confident that the time, energy, and money that industry leaders invested in the political process over the past two years will help make us collectively more effective and pay important dividends in the immediate future. CHRISTIAN KLEIN (caklein@aednet.org) AED’s vice president of Government Affairs and Washington counsel. He can be reached at 703-739-9513.
Hear Stuart Varney, Live at AED Summit
The host of Varney & Co. on Fox News presents his expert analysis of the U.S. economic and political stages, Wednesday, Jan. 16 in Las Vegas. Register at www.aedsummit.com.
COMMITTED TO MOVING YOUR BUSINESS FORWARD Covering more than 24 states, we’re more committed to the construction equipment industry than ever before. With more than $350 million in equipment-related commitments, our team of industry experts can tailor nationally competitive products to meet your specific needs. Whether it’s fleet rental/wholesale inventory, working capital or larger, multi-bank syndications, we’re ready to invest in your business. When it’s time to move your business forward, give us a call, or better yet, let us come see you.
Lending | Syndication 214.736.1054 | www.bok.com /construction
December 2012 | Construction Equipment Distribution | www.cedmag.com | 43
A Window to CONDEX
Exhibitors
CED presents Part 2 of its special preview to the upcoming CONDEX trade exhibition designed exclusively for dealers in conjunction with the AED Summit at the LVH in Las Vegas, Jan. 15-17. Visit all the CONDEX exhibitors and explore which products and services will help your business grow in 2013 and beyond. Attention manufacturers and service providers: Want to expand your dealer network and customer-base? There’s still time to sign up for CONDEX booth space – call Dave Gordon at 630-574-0650, ext. 334.
New Offerings from BLS for CTLs and Mini-Excavators Booth No. 301 KWWS ZZZ WXISDGV FRP
BLS Enterprises, Inc., manufacturer of TUFPADS track pads and distributor of Bridgestone rubber tracks, is now stocking rollers, idlers, & sprockets for compact track loaders and mini-excavators. Large inventory of parts, available for immediate shipment BLS purchases direct from the manufacturer, supplier to many equipment manufacturers Save on shipping by purchasing rubber tracks at the same time Parts available for John Deere, Bobcat, Takeuchi, and more! Call toll free at 800-307-0299, or e-mail us: bls@tufpads.com
Save Your Customers Thousands with Broce’s New MK-1 Transfer Sweeper Booth No. 419 ZZZ EURFHEURRP FRP
Many contractors who have been faced with the high cost of maintenance and time consuming operation of truck-mounted pick up sweepers to pick up large amounts of heavy material are turning to Broce’s new MK-1 Transfer Sweeper. The MK-1 is saving contractors thousands of dollars, not only in maintenance, but also in greatly reducing the amount of time and labor it takes to clean up after the milling machines or chip spreaders while reclaiming what the others leave behind. See our online video of the MK-1 and other Broce models in action, and call toll free for a free demonstration today: 866-579-2488. (continued on page 46)
44 | www.cedmag.com | Construction Equipment Distribution | December 2012
Support better policies that protect our industry, improve our economy and keep us globally competitive. www.IMakeAmerica.com
Connect with Paladin: www.paladinattachments.com
My local dealer has all the Paladin attachments I need to get the job
done right and on time!
No Worries!
Please visit us in CONDEX Booth 409 and Suite 460 East Tower.
Division of
Exhibitors
Industry News, Equipment, and More from CEG, Print and Online Booth No. 317 ZZZ FRQVWUXFWLRQHTXLSPHQWJXLGH FRP
Construction Equipment Guide (CEG) is a national publication and website that provides industry news; articles on construction equipment, projects and legislation; auction coverage; business profiles and events and more. CEG’s biweekly newspapers consist of four regional editions – Northeast, Southeast, Midwest and Western. CEG’s website is a one-stop source for news, used equipment searches, equipment dealer locators, upcoming auctions, construction videos, online editions of its print editions and more. Founded in 1957, CEG is based in Fort Washington, Pa., and is a proud member of the Associated Press.
Fleet-Tracking, Vehicle Reporting from DSi Booth No. 517 ZZZ GLVSDWFKLQJVROXWLRQV FRP
Provide Your Customers the Benefits of Idle Reduction Technology Engine idling offers no benefits for off-highway operations. Our engine-off heating technology reduces unnecessary engine use, saving fuel and reducing engine wear. Webasto’s cost effective solutions bring together the very best in comfort and efficiency for every project. The result is lower operating costs and satisfied customers!
Webasto Idle Reduction Technology:
Provides significant fuel savings Provides engine pre-heat & supplemental interior heat Reduces idling resulting in lower overall engine hours Reduces emissions on start-up Extends the life of DPF‘s Increases re-sale value
For more Information contact: Bob Lesher (bob.lesher@webasto.com) 810.515.0410 www.webasto.us Please visit us in CONDEX Booth 515. 46 | www.cedmag.com | Construction Equipment Distribution | December 2012
Come see how Dispatching Solutions, inc., bridges the gap between fleet management and transportation dispatching. Our suite of integrated applications can take your organization from frustrating and stale workflows to a modern and optimized way of doing business. DSi Mobile, a cloudbased telematics solution, offers fleet tracking and vehicle reporting to keep your mobile assets safe and DOT compliant. Speed, location, and trip duration are among the data sent to the DSi Mobile platform. From the browser-based interface, managers and executives have a dashboard view of fleet health and activity. Additionally, load information and driver communications can be managed by connecting DSi Mobile to DSi Transport Manager, our flagship application. On its own, DSi Transport Manager simplifies dispatch scheduling and brings analytic reporting to transport operations. By linking it with DSi Mobile, work in the office and on the road both become more efficient. Stop by our booth to learn more about what DSi can do for you.
Exhibitors
Dromone’s Multi Lock Coupler is Designed for Operator/Site Safety Booth No. 422 ZZZ GURPRQH FRP XV
Dromone Engineering, an Irish company and leader in hitching technology for construction and agricultural markets, continues to focus efforts around expanding its U.S. presence and product availability – at CONDEX we will introduce dealers to the new Dromone Multi Lock Coupler. The product allows operators to safely complete attachment changes without leaving the cab, and is specifically designed to address market concerns regarding coupler safety in relation to operator and site safety. The Multi Lock Coupler can be utilized in a wide range of ways with a wide range of machine types, allowing greater versatility. Like all of its products, Dromone Multi Lock Couplers are safe, reliable and available to customers around the world. Dromone’s products are currently available for export to 42 countries. Come and see its many safety features at CONDEX! And for more information, please call Sean Clifford at (857) 272-1116.
Ground
Engaging one Scoop at a Time
When Customers Search, Make Sure Your Website is on Page One
woodsequipment.com 800-848-3447
Booth No. 822 ZZZ HTXLSPHQWZHEVHUYLFHV FRP
As more dealerships are investing in websites to increase their bottom-line, let’s face it, having a website as a business is becoming the standard. As a result, we believe Search Engine Marketing paired with a professionally designed website is a must-have for a forward thinking business. Your customers are actively searching for your inventory monthly, but is your dealership’s website showing up at the top of search results? With Search Engine Marketing, it’s not just about gaining website traffic; it’s about reaching your ideal customer on a consistent basis. Visit our booth to learn more! (continued on next page)
Please visit us in CONDEX Booth 716. December 2012 | Construction Equipment Distribution | www.cedmag.com | 47
Exhibitors
Helac PowerTilt Attachment Saves Time Booth No. 719 Â&#x2021; ZZZ KHODF FRP
Helac PowerTilt Hydraulic Bucket Tilting Attachment provides backhoes and excavators with up to 90-degree left and right bucket swing for a full 180-degree total side-to-side swing capability. It pin mounts to the dipperstick and has a clean, compact configuration with no cylinder rods or other external moving parts exposed to damage. PowerTilt can be furnished with two different, built-in couplers direct from the factory: the standard, hook-style mechanical quickcoupler uses OEM pin-on buckets while the optional universal coupler uses quickhitch style buckets. PowerTilt can also be combined with most popular hydraulic quick-couplers. Each PowerTilt is equipped with an internal cross-port relief valve that provides hydraulic overload protection. Seven PowerTilt models are available, sized by machine weight, for backhoes and excavators to 75,000 LB. For more information, call 1-800-PWR-TILT or e-mail attachments@helac.com.
ACT 2.0: More Uptime, Less Set-up Time Booth No. 609 Â&#x2021; ZZZ KN[ FRP
ACT is designed for excavators with multiple attachment application. New in version 2.0 is the ability to configure operating parameters for up to 20 attachments on-site. The state-of-the-art control modules that comprise ACT are capable of being fully integrated allowing for custom-made functionality. ACT offers advanced control of oil flow, pressure and direction to attachments, as well as supporting components such as accumulators and return filters. With the push-of-a-button, ACT automatically adjusts the machineâ&#x20AC;&#x2122;s parameters to match the selected attachmentâ&#x20AC;&#x2122;s specs. This in turn, ensures optimum performance while drastically reducing setup time. ACT 2.0 offers programmable attachment operation warnings and service intervals to help keep attachments well maintained and operating efficiently. Individual IDs with unique privileges can also be assigned for each operator allowing for better operational control and record-keeping. Proportional control enables precision operation while Operator Sensor Control (OSC) hand detection reduces accidental operation-related injury and damage. Â&#x201E; Increased excavator utilization Â&#x201E; Reduced jobsite downtime Â&#x201E; Optimum attachment performance Â&#x201E; Customizable functionality Â&#x201E; Safer excavator and attachment operation
IROCK Introduces RDS-20 Mobile Crusher: 'HVLJQ ,PSURYHV (IĂ&#x20AC;FLHQF\ 4XDOLW\ Booth No. 808 Â&#x2021; ZZZ LURFNFUXVKHUV FRP
IROCK, a leading manufacturer of screening and crushing equipment, has introduced the RDS-20 Primary Crushing Plant. The RDS-20 is a highly portable, easy to operate mobile unit. It combines a closed circuit design, high-performance four-bar impactor and heavy-duty components for reliability, increased efficiency and the precision to produce a uniform, cubical product. It also is versatile enough for use across multiple industries and can process a variety of materials, including quarry rock, demolition debris, recyclable materials and base rock for oil fields. The machine features a 5- by 16-foot, double-deck screen. It has the ability to crush, screen and separate up to three different sizes of materials, two sized and one crusher run, at a rate of up to 500 tons per hour (TPH). The initial vibrating feed opening is 52 inches by 17 feet, while the crusher feed opening is 56 by 32 inches. For more information, contact IROCK, 5531 Canal Road, Valley View, OH 44125, call 866-240-0201, fax 440-735-4974, e-mail sales@irockcrushers.com, visit the website, or see the equipment in action on YouTube. 48 | www.cedmag.com | Construction Equipment Distribution | December 2012
Exhibitors
Reach Farther, Sell Faster Online With IRON Solutions Booth No. 518 ZZZ LURQVROXWLRQV FRP
IRON Search is your remarketing solution that reaches 400,000 buyers every month, with more than 100,000 used equipment listings. List with accuracy. IRONSearch.com is a quick and easy way to list your equipment with detailed specs powered by IRON’s Official Guide data. You’ll price your equipment competitively using the appraisal function of IRON Guides, helping your equipment sell quickly and profitably. Sell with Confidence. IRON Search has an exclusive partnership with IronPlanet, giving you access to move your equipment to auction in a few, simple clicks. IRON Search is the leading destination for selling your equipment, delivering more than 200,000 leads and $2 billion in equipment sales each year. Socialize with Ease. IRON Search has built-in social media integration tools so you can now display equipment to your Facebook page. Enhance it further with mobile site functionality. Subscribe today on our website and visit us at CONDEX.
HydrauliCircuit Technology Displays 3-Mode Joystick Booth No. 414518 ZZZ KFWNLWV FRP
CED misprinted the headline for this exhibitor last month – we regret the error. Visit HydrauliCircuit Technology’s booth to learn more about their 3-mode joystick, which greatly simplifies changing circuits for various attachments on multifunction kits.
With MachineryZone, Selling Your Used Equipment Has Never Been Easier. Booth No. 816 ZZZ PDFKLQHU\]RQH FRP
MachineryZone is a leading online marketplace for construction equipment, including used, new and even auctions. Whether you are looking to sell your equipment or buy some, MachineryZone is the right place to be! Each month, 1.8 million visitors from 160 different countries, choose to use the website. Selling your equipment has never seemed easier. Through your personal account you can upload your entire stock and manage it at will. Each ad contains technical details, comments and up to 10 photos. You have access to all your ads’ statistics as well as all client requests. And you can print out your ad listings whenever you need them. So log on or contact Samuel Babin at s.babin@mb-diffusion.com, +33 (0) 160 87 11 62 for a free trial.
Mini-Cranes Offer A New Approach to Material Handling Booth 802 ZZZ PDHGDXVD FRP
Maeda Mini-Cranes are small enough to go where no other lifting device can while providing up to 67.9-feet of lift height and 10,800 pounds of lift capacity. Proven by building contractors, crane services, glaziers, plant maintenance departments and other industries, the Maeda units are in compliance with ASME and EPA standards. The ability to enter through doorways provides a unique solution indoors, underground and in confined spaces. Standard features include fully automatic five-section booms, 360-degree swing, hydraulic disc winch brakes and programmable Moment Limiter Safety Switches. North and South America are discovering these unique lifting devices and sales have increased year after year. All models are self-propelled with diesel or gas engines standard and optional electric or LP power. The smallest MC285-2 model is a slim 30-inches wide when in the travel position and lifts up to 6,210-lbs to 28.5-feet. The LC785 compact crane with cab has 66.4-ft. of maximum lift height with boom and optional jib. Two other models – MC305-2 and MC405 – fill out the line and are ride-along mini-crawler cranes. To discuss distributor possibilities, call 713-715-1500 or e-mail cranes@maedausa.com. (continued on next page) December 2012 | Construction Equipment Distribution | www.cedmag.com | 49
Exhibitors
Miniveyor Products Ltd. Debuts at CONDEX With Portable Blowers, Welding Fume Exhaust Fans Booth No. 627 ZZZ PLQLYH\RU FRP
Miniveyor Products Ltd, famous for their Miniveyor portable dirt conveyor system, will be exhibiting at CONDEX for the first time to showcase their Miniveyor Air range of portable blowers and welding fume exhaust fans. The Miniveyor Air VAF fans and blowers are the professional choice for portable dust and welding fume extraction. The VAF blowers can be used as a portable ventilator and confined space exhaust fans or extractors. The vane axial fans from Miniveyor combine dependable power with practical operation. The stackable design saves valuable floor or storage space; the large handles enable effortless maneuverability, and antiskid rubber feet for steady operation. The VAF series fans work on both positive and negative airflow making them equally at home extracting fumes and dust or blowing fresh clean air into a confined workspace. The rugged design is durable and weather resistant. The double wall construction is made from high-density polythene that absorbs the ordinary ding or bang experienced in the field allowing them to stay in service far longer than conventional metal-bodied fans.
Check Out the Morbark Beever M12R Brush Chipper Booth No. 322 ZZZ PRUEDUN FRP
Perfect for utility line clearing, residential tree services, rental yards and municipalities, the powerful and compact Morbark Beever M12R Brush Chipper is easy to maneuver. The M12R is also available tracked for right of way clearing, highway cleanups and hard-to-reach areas requiring a self-propelled unit for material access. The direct driven dual feed wheel system with serrated teeth and knife bar combination and end cap ripper teeth allow positive material feeding and reduced material wrapping around the feed wheel shaft for increased feeding efficiency. Standard features include: 60 inches wide x 31 inches high perimeter opening and 16 inches wide x 12 inches high throat opening for easy feeding of branchy material and reduced saw labor Patented chambered air impeller system, which increases chip throwing velocity and reduces dust and material blowback out the infeed to pack more into the chip truck Reversing auto-feed system to prolong knife wear life by sensing the engine RPM and briefly reverses material feed
See the New Hammerless Solution for Electric Cable Shovels from MTG Booth No. 722 ZZZ PWJFRUS XV
MTG announces the launching of new products for mining, dredging and heavy construction including its first hammerless solution for electric cable shovels, commonly known as “whisler,” and its new generation of products for dredging, DMet. These new products will be available globally in early 2013, in conjunction with the launching of MTG’s new plant in Europe. “Our new plant’s foreseen initial production is 10,000 tons with the possibility of significantly increasing its capacity in the future, said Javier Triginer, the company’s CEO during MTG’s press conference at MinExpo. “Our products will continue to be distributed exclusively through MTG’s global network of authorized dealers.” Additionally, MTG presents four new sizes and five new designs for its acclaimed hammerless StarMet system. With the new available sizes, MTG fully completes its product range offer for Construction, Heavy Construction and Mining. Their most innovative characteristics are being the lightest and having the shortest tooth nose available on the market. They incorporate the new Bilateral MTGTwist fixing system (both the retainer and the pin can be assembled on both sides of the adapter) which allows the user to introduce the pin through the most convenient side. 50 | www.cedmag.com | Construction Equipment Distribution | December 2012
Exhibitors
Rock & Dirt to Demo New Web Features at CONDEX Booth No. 423 ZZZ URFNDQGGLUW FRP
Rock & Dirt will demonstrate new online features, including premium listings and auction bid links at AED’s CONDEX. “Sellers and buyers alike will benefit from these innovative tools on RockandDirt.com,” said Travis Clark, sales manager. “They add tremendous value for our customers.” Clark said that premium listings, available to qualified advertisers, are highlighted and appear at the top of key searches. “They’re easier to see,” he commented, “increasing seller visibility and traffic.” Also new are auction bid links for live and timed sales that allow buyers to bid directly. Clark said this new feature shortens the distance between search and bid, generating more and larger bids for auction companies. “These new features, along with our industry-leading, online auction results, enhance Rock & Dirt as the ‘onestop-shop’ for end users,” remarked Clark. “We’ve got the most comprehensive selection of heavy equipment for sale, and the most current, complete, free auction results,” he concluded. Visit our booth, e-mail Travis Clark at tclark@ rockanddirt.com, or call 800-251-6776 or 931-484-5137.
HCT Has the Right Connections 3LHRPUN O`KYH\SPJ MS\PK JHU IL H TPUVY HUUV`HUJL VY H THQVY JH[HZ[YVWOL ,P[OLY ^H` /*; JVUULJ[PVUZ TPUPTPaL [OL JOHUJL MVY SLHRZ [V KL]LSVW s OEM style ORFS or CD62 4 bolt flange connections s Higher safety standards s Efficient designs with fewer connections, reduce the number of potential leak points
Welded tube ends for maximum strength and durability.
Sentry’s CustomGuard Helps Dealers Control Exposures Booth No. 709 ZZZ VHQWU\ FRP
Sentry Insurance’s CustomGuard risk management program is a collaborative effort to control dealership exposures through education with technical safety resources and integration of best practices. Improve effectiveness– the program developed for you is effective because it’s tailored to your business’s specific needs Provide program consistency – the program assists with providing consistency for multi-location businesses Control insurance costs – accident prevention, thus reducing claims, is key to holding the line on insurance premiums Avoid hidden costs of an accident – including loss of productivity, revenue loss and paid deductibles, can add up to more than twice the amount of the claim. (continued on next page)
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-S\PK +YP]L 4J+VUV\NO .( Please visit us in CONDEX Booth 414. December 2012 | Construction Equipment Distribution | www.cedmag.com | 51
Exhibitors
Stanley Vidmar Cabinet Systems – Tough Storage Solutions for the Dealership Booth No. 527 ZZZ VWDQOH\YLGPDU FRP
Use less space to store more with high-density Stanley Vidmar cabinet systems. More storage-efficient than open shelving, Vidmar cabinets can be custom-built to your specific on-the-job needs. From height, width, and color to the number and position of your drawers – it’s all up to you! One thing all our cabinets have in common, though, is our trusted lifetime guarantee. Want to know more? Call us today at 800-523-9462 to request more information.
Range of Strickland Mfg.’s Universal Thumbs Is Expanding Booth No. 415 ZZZ VWULFNODQGXV FRP
Strickland Mfg. has added universal pad mount thumbs to their excavator attachments offering. Manufactured from Hardox 400 steel, the thumbs are interchangeable from mechanical to hydraulic by changing out the stiff arm for a hydraulic cylinder. All pins and parts remain with the thumb in retracted position and cylinder drift is prevented by way of a common locking pin. Initially available for 16 and 20 metric ton excavators, Strickland’s universal thumb range will be expanded in the coming months. For more information visit our website and pay us a visit at CONDEX.
Introducing the Carbide Cutter G3
THE NEXT GENERATION
THREE GENERATIONS OF CUTTING EDGE INNOVATION
Standard Carbide
Planer Carbide
With field-proven rugged durability, the refined and balanced design of the Carbide Cutter G3 has made it the "gold standard" in the vegetation management industry. With the newest generation, Loftness has incorporated the latest power drive systems and cutting tooth technologies.
Quadco Planer Blade
Loftness has engineered a line of carbide-tipped and heat-treated steel teeth specifically for the G3. See page 8 for details. the Loftness Vegetation Management Equipment LEARN Visit website to learn more and experience the Carbide Cutter MORE G3 from every angle. www.vm-logix.com
Scan this code to learn about Loftness VMLogix Systems
WWW.VM-LOGIX.COM
agricultural, vegetation and snow removal solutions at www.loftness.com Loftness Specialized Equipment
52 | www.cedmag.com | Construction Equipment Distribution | December 2012
WWW.LOFTNESS.COM
www.loftness.com P.O. Box 337 Hector, Minnesota 55342 USA
Toll Free US & Canada: 800-828-7624 International 320-848-6266 email: info@loftness.com
Exhibitors
Forklift Rental Program From TCM America Booth No. 201 ZZZ WFPIRUNOLIWV FRP
This is not a dealership program but rather a rental fleet program for construction equipment and rental equipment dealers in the U.S. It is our thought that many of your existing customers could use a forklift rental from time to time and that the TCM line would complement your rental offerings. Purchase TCM forklifts factory direct from TCM America. Six months interest and principal free with approved credit. No commitment. TCM America is an AED member. Visit us at the CONDEX Show! Or contact us in advance: frusso@tcmforklifts.com; 803-227-6538
Toku America, Inc. Brings TNB Series Breakers To CONDEX Booth No. 805 ZZZ WRNX DPHULFD FRP
Toku America, Inc. presents their new TNB series hydraulic breakers, the newest of a long 30-year legacy of hydraulic breakers. The TNB series breaker delivers exceptional impact energy, productivity and versatility, along with low operating costs. These unique benefits are due to an innovative blend of a simple yet efficient two moving parts design and an advanced “accumulator free” technology. With Striker Hydraulics’ “flow through design” coupled with our Cushion Chamber design, which cushions every blow with an internal shock damping system. The TNB series breakers are ideally suited for applications from primary/secondary breaker, road and bridge construction, airport construction, demolition, mining, quarry, rental, landscaping and recycling.
(continued on next page)
December 2012 | Construction Equipment Distribution | www.cedmag.com | 53
Exhibitors
New Product! TVH’s New Style Hall Effect Controllers Booth No. 721 ZZZ WYK FRP
TVH in the Americas (TVH) is proud to introduce their expanded controller selection of New Style Hall Effect Controllers. Hall Effect is the production of a voltage across an electrical conductor. Edwin Hall discovered this technology in 1879. Technological advances have made it more feasible Less moving parts than traditional controllers Increased precision on measurement of movement versus carbon potentiometers/gears The controllers’ size and rugged durability are widely used in many applications, such as aerial work platforms, material handling, agricultural and forestry equipment. Updated controllers with newer plug Single/Dual Axis With or without Steer Controls Update Kit -Controller with new harness Adapter Harness For more information contact Darrell Loomis at 800-255-4109 or 913-829-1000.
Wacker Neuson Introduces New MiniExcavator Featuring Best-In-Class Power Booth No. 307 ZZZ ZDFNHUQHXVRQ FRP
Wacker Neuson’s new mini-excavator is the smallest in the company’s growing line of compact equipment. The 803 is a 1-ton mini-excavator designed for digging and demolition applications in tight spaces. At just 27.5-inches wide, this compact machine fits through standard doorways, making it ideal for interior applications. “This mini-excavator may be small in size, but it’s big on versatility and performance,” said Adam Purcell, Wacker Neuson’s product manager for excavators and dumpers. “The new 803 is all about accessibility and power. The narrow width and short height allow this machine to operate in areas with restricted access points, making it very versatile on any jobsite,” Purcell added. The 803 comes standard with rubber tracks ideal for driving on interior floors and the foldable ROPS (Roller Over Protection System) reduces the machine height for even more accessibility. The unique ROPS design takes user comfort to the next level by adding an optional debris guard between the work-group and operator station, making demolition applications an easier task. This robust mini-excavator is powered by a 3-cylinder, 13-hp diesel engine and includes an advanced hydraulic system. Best-in-class horsepower make the 803 an excellent solution for difficult excavating and demolition applications.
WTC Includes Laptop, Optional Data Logging Package with MT10000 Torque Wrench Booth No. 626 ZZZ ZWFPDFKLQHU\ FRP
The powerful MT10000 all electric torque wrench now takes fast, accurate torquing of track shoe bolts to a whole new level. This is the only torque wrench available today that combines 10,000 foot pounds of torque with advanced remote diagnostics and data logging capabilities. A dedicated laptop computer comes standard with every MT10000, and it’s networked so that WTC can perform remote analysis and maintenance or program updates on the wrench. This can save the expense and delay of a service visit, and keeps your operation running. In addition, WTC now offers an optional data logging package for the MT10000 laptop that’s sure to boost shop productivity. It records each bolt torque setting, reading the after-torque turn setting, and the actual measured values obtained from each bolt tightening sequence for each track. This information is stored in a database, along with the make, model and serial number of the track in question, the service date and time, and any internal job number. This data can be shared with the customer or kept in house for quality assurance. Please visit us at our CONDEX booth and call us at 262-567-3993 for more information. 54 | www.cedmag.com | Construction Equipment Distribution | December 2012
SERVING EQUIPMENT MANUFACTURERS & DEALERS
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REPRESENTATIVE CLIENTS Alta Lift (California) American Warehouse Systems (Minnesota) Carolina Tractor & Equipment Co. (North Carolina) LiftOne & Engineered Solutions (North Carolina) NMC Material Handling (Nebraska) Pon Material Handling (Illinois) (Texas) Quinn Caterpillar (California) Teupen, USA (North Carolina) Tri-Lift, Inc. (North Carolina)
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Risk Management
Seems around every corner someone’s waiting to sue – so you might consider another layer of protection. BY BY BOBETTE PUCKETT AND CHRIS BRECK
One area of concern for business owners and CFOs is: Where am I and/or my business exposed to liabilities? The two most common places are fiduciary liability and cyber liability. Most reply back “Someone else administers the 401(k) plan and I have an IT consultant – what exposure could I possibly have?” More than you know is the universal answer we give. We will briefly explain the exposures to you and your company and how you can easily (and usually inexpensively) protect yourself. Fiduciary Liability This may come as a surprise to you, but if you are an owner or officer of a company who makes decisions about your company’s 401(K) plan or other qualified employee benefit plan, odds are you are putting your personal assets at risk. The key words are “makes decisions” – any decisions. This includes choosing what administrator to work with, options that the administrator offers, loan provisions, etc. What is a fiduciary? Business entities that administer, design, evaluate, manage, and have discretionary control over a plan’s administration or the investment of plan assets are called “Fiduciaries.” ERISA law (the Employee Retirement Income Security Act) states that plan fiduciaries (also known as Plan Trustees) can be held personally liable for losses to a benefit plan incurred as a result of their alleged errors, omissions, or breach of fiduciary duties. ERISA was created in 1974 in response to abuses of benefits administration and retirement programs. ERISA law regulates the administration of pension and welfare benefit plans offered by private employers. Oddly enough, ERISA does not require Fiduciary Liability Insurance, only a fidelity bond. The fidelity bond does not protect the personal assets of the fiduciary. It is designed to protect the plan and its beneficiaries, not the trustees. Claims can be brought upon trustees by plan participants, participants’ legal estates, the Department of Labor, and the Pension Guaranty Corporation. They include allegations of improper advice or disclosure, inappropriate selection of
Watch Out for Another Legal Gotcha – Fiduciary and Cyber/ Privacy Liability advisors or service providers, lack of investment diversity, breach of duties, negligence in the administration of a plan, and conflicts of interest. Pretty much anything someone can think of. A common misconception is that claims like these are covered under other insurance policies that you may have (Directors & Officers, Employment Practices, Crime). Most policies specifically exclude fiduciary exposure as well as any ERISA related exposures. A survey conducted by Tillinghast, Towers, and Perrin shows that the frequency of claims has doubled since 1993. With the recent economic downturn and stock market losses still in our rear view mirror, one can only expect plan participants to try and figure out “unique” ways to recover their investment losses. The good news is that there is insurance coverage that can provide financial protection for fiduciaries called Fiduciary Liability. The coverage transfers the personal risk of a fiduciary’s legal liabilities, including the cost to defend these claims (usually the most expensive part). Cyber/Privacy Liability Another area where most companies mistakenly feel that they have no exposure is cyber/privacy risk. Most business owners think that cyber means Internet, or that privacy liability only applies if they do credit card transactions. It is your company’s obligation to protect the data, financial and personal information of its customers, suppliers, and even employees. In addition, most of the valuable assets of a company are now found on a network. All someone needs to access your customer lists, records, receipts, tax documents, intellectual property and trade secrets is a data connection and the expertise to do it. Companies are exposed internally as well as externally. As the victim, you are faced with heavy regulatory burdens for notification and the resulting expense to comply. If 500 records are breached, the minimum cost to notify the affected parties is $107,000. The more records that are breached, the more this cost increases. (continued on page 58)
56 | www.cedmag.com | Construction Equipment Distribution | December 2012
Fiscal Cliff Countdown
29 Days LLeft D f
The “Fiscal Cliff” is fast approaching – are you prepared?
Equipment rental companies are facing a serious tax problem. With bonus depreciation expiring at the end of this year, taxes will skyrocket and drain your cash flow! Fortunately, there is a solution to the problem. As the AED Preferred Provider of LKE services, we can help you navigate through these difficult times. ©
Equipment dealers can use a Like-Kind Exchange (LKE) program to reduce their tax bill and increase cash flow.
Contact us today to discuss the details and to receive a free cost-benefit analysis!
WTP has the only fully integrated LKE solution in the industry. If you are already utilizing other LKE vendors, conversion to the industry leading solution can be completed easily. Start realizing the benefits of our solution today! Visit us at www.wtpexchange.com Ron Hodgeman Tax Director WTP Exchange (888) 733-1031 ron.hodgeman@wtpexchange.com Preferred Provider
Risk Management
(“Watch Out for Another Legal Gotcha – Fiduciary and Cyber/Privacy Liability” continued from page 56)
No business is without these exposures, and despite one’s best procedures to prevent these events, human ingenuity finds ways to penetrate your data. Employee negligence is the single largest exposure causing cyber/privacy losses today. Yet how many of you would attribute this kind of loss to your own staff? Employee negligence happens in a lot of different ways. Some examples of employee negligence include: Improper disposal of records and/or confidential information Loss of portable devices Improper maintenance or storage of printed material Inadvertent disclosure or sharing of information Inadvertent infection of a computer, system or file Inadvertent transmission from an infected computer, system or file Inappropriate disclosure of information to a third party Another worrisome exposure is the rogue employee. This is a disgruntled employee who engages in deceitful or destructive actions. This can be in the form of stolen intellectual property, disruption to or destruction of systems, and many other means of acting upon or causing ill-will. Other cyber/privacy exposures include: Transmission of malicious code Breach of confidential information Hacking into one’s system by a third party Violation of employee privacy rights Similar to fiduciary liability, most business owners are not aware that traditional general liability insurance policies do not cover losses related to cyber liabilities. The media frequently reports on cyber security breaches within larger corporations, major credit card companies, and even the Defense Department, but rarely do you read about these same types of breaches within smaller businesses, but cyber liability can affect businesses of all sizes. According to a 2011 survey from Symantec, cyber attacks cost companies, on average, $470,000 in lost revenue and downtime. Fortunately there is insurance coverage available to transfer this exposure to the insurance company and offer you financial protection. This type of insurance program is called Cyber Liability and incorporates First Party (protection for your company) and Third Party (legal liability your company has to other parties) coverage. Cyber Liability is a growing and fast evolving coverage. It will soon be a requirement for most government contracts that a Don’t Miss: The Changing Landscape of Fiduciary Responsibility – at AED Summit The laws and regulations are many – and today the retirement plan fiduciary is becoming a target of predatory attorneys. Find out how to comply with the rules and learn the top reasons fiduciaries get sued. Presented by Todd Thompson, Director of Business Products Group, Sentry Insurance Company. 58 | www.cedmag.com | Construction Equipment Distribution | December 2012
contractor have Cyber Liability insurance in place. In 2005, an FBI survey showed fewer than 30 percent of businesses had Cyber Liability insurance in place; today more than 60 percent of businesses have some form of Cyber Liability. The first step in designing a Cyber Liability program is understanding what the coverage components are and why they are needed. These coverage components are split into two types of coverage: First Party Costs and Third Party Legal Liability: First Party Costs. Breach Response or Notification Costs provides for the reimbursement of costs incurred to respond to a network security and/or privacy liability breach or compromise. Costs include notification to the consumer, credit repair, monitoring and support services, forensic expenses, and crisis management/public relations expenses. Business Interruption provides for the reimbursement of expenses and lost income due to a business interruption as a result of a network security and/or privacy liability breach or compromise. Loss of Data/Digital Assets provides for the reimbursement of expenses of the Insured to recover, repair or restore digital assets affected as a result of a network security breach. Cyber Extortion provides for the reimbursement of costs as a result of an extortion attack through electronic means. Cyber Terrorism provides for the reimbursement of costs arising from a terrorist activity or event. Third Party Legal Liability. Media Event Liability provides coverage for claims arising from personal injury (libel or slander) or advertising injury arising from your website and/or printed materials. Network Security & Privacy Liability provides coverage for claims arising out of a breach or compromise of your network and/or personal confidential information of others in your possession. Regulatory Fines provides coverage for regulatory penalties, fines and actions brought against you by governmental agencies as a result of a privacy liability compromise event. Policies and procedures for handling the corporate and personal risks identified here are essential to an effective Risk Management Program. Both Fiduciary Liability and Cyber Liability insurance are important tools to limit surprise expenses in your business and are critical to your overall Risk Management Program. Be sure to include these discussions when designing your insurance program. BOBETTE PUCKETT is executive vice president at Alper Services LLP in Chicago. She can be reached at 312-642-1000, bpuckett@alperservices.com
CHRIS BRECK is vice president at Alper Services, and he can be reached at cbreck@alperservices.
AED Summit Presents &DEDUHW 1LJKW %HQHȽW for the AED Foundation Sponsored by Sentry Insurance
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Best Practices
The Cleveland Brothers’ service department is the No. 1 customer of the company’s used parts group. This 777D Cat loader is being rebuilt with quality used and remanufactured parts.
The World is Their Market Place
Cleveland Brothers combines an aggressive marketing program with strategic partnering to gain used equipment and used parts marketshare in the U.S. and abroad. BY JOANNE COSTIN
Used equipment doesn’t have the “clunker” image it once did. Today, a used machine or used parts purchase is recognized as a very smart business decision for many contractors. And with an ample supply of late-model used machines coming out of rental fleets, there are more reasons than ever for contractors to consider a used machine purchase. Warranty coverage on rebuilt parts and machines has also strengthened the value proposition for used purchases. Yet, despite these changes, most construction dealers haven’t put a lot of marketing muscle behind their used machinery and used parts business. But Cleveland Brothers, the Caterpillar dealer headquartered in Murrysville, Pa., saw an opportunity and went after it. Now, they’re reaping the rewards of their efforts. In 2005, after Cleveland Brothers, acquired Beckwith Machinery and One Call Rentals, the company began looking for ways to use its combined resources to leverage its reputation in the used marketplace. A New Alignment Instead of structuring the business in the typical manner, where used parts fall under the parts department and used machinery is grouped with new machinery sales, Cleveland Brothers aligned used parts and used machinery into one Used Group. Matthew Washic, corporate used parts manager for Cleveland Brothers, explains why the strategy has worked. “Our success is driven by our ability to offer customers options. We see what a customer’s needs are and we guide them to what way is best for them,” said Washic. 60 | www.cedmag.com | Construction Equipment Distribution | December 2012
“We offer expertise and we find solutions,” added Robert Thompson, used sales and remarketing representative for Cleveland Brothers. “Customers come to the dealers they trust.” As a result of the realignment, customers who call the dealership looking for an engine may sometimes end up purchasing a used machine, and those who were looking for a used machine, may end up with a parts purchase. “If we didn’t have that combined work flow, it would likely result in more lost sales,” explained Washic. A Global Opportunity The focus of marketing efforts for used is different than it is for other profit centers within the dealership. “With used equipment and used parts, the world is our market,” said Cleveland Brothers Director of Marketing Carl Tinkham. The used market is competitive with many players competing on price. Within its home territory alone, Cleveland Brothers faces off against more than 50 competitors. Independent dealers, rather than franchised dealers, comprise the bulk of these companies. To compete, Cleveland Brothers takes a multifaceted approach to marketing that maximizes sales both in-territory and globally. Online marketing is a significant component of the used marketing budget. “We put a tremendous effort into search engine optimization for our website to try and pull in people searching organically, and we also run pay-per-click campaigns specifically targeting component types or machine searches such as “Caterpillar bulldozer parts,” said Tinkham. To expand international trade opportunities, Cleveland Brothers partnered with Pennsylvania’s Regional Export
Best Practices
Network with positive results. “They have opened up a lot of doors for us,” reported Washic. In September, the group invited representatives from Cleveland Brothers to share an exhibit at MINExpo. In addition to business development, the group helps Pennsylvania businesses understand the legal issues, pricing and channels of international trade. Thompson continues to be impressed that so much global business for used equipment and used parts is conducted over the Internet and phone. “There are only a handful of strong players internationally,” said Washic. “Good, honest, trustworthy people will buy a tractor without making a trip over here, based on your credibility.” In-Territory Success To boost used parts and used equipment sales within their territory, the used parts and used equipment group communicates regularly with the field sales force, parts counter personnel and product support sales reps so they are all kept current on what’s available. There is a lot of collaboration. “Cleveland Brothers’ service department is our No. 1 customer,” said Washic. Utilizing used parts is an integral component of Cleveland Brothers’ repair and maintenance services. With a 40-50 percent savings off of new parts, utilizing used parts can be an excellent choice for cost-conscious customers. When competing against aftermarket parts providers, Cleveland sells the quality and standards of CAT parts. Locally, Cleveland follows CAT reusability guidelines to determine if used parts will be put in inventory. “The rule of thumb we use,” said Washic, “is if we wouldn’t use that part in our own rebuilds, it doesn’t go into inventory.” Leveraging Their Network Cleveland Brothers belongs to the Caterpillar Dealers Used Parts Association (CDUPA), an industry association that certifies the quality of used Caterpillar parts. According to Washic, who is president of CDUPA, the Caterpillar dealer network provides a unique advantage in the used parts business. “The idea is to share best practices so that all
CAT dealers can increase their parts business,” explained Washic. It also provides dealers with access to additional inventory. “If I get a call from Alabama I will call the Cat used parts dealer in Alabama and a lot of times we will route the sale through the dealer versus selling it direct to the end-user,” said Washic. At the same time, when Cleveland Brothers needs to source the part, they can turn to the CAT dealer network. “ “It makes it really good for our customers because we can use each other’s inventory on used product,” added Thompson. Cleveland Brothers uses Netcom and Fasttrack/ Machinery Trader databases to locate parts and machinery. The company’s parts inventory includes approximately 4,500 line items, a number that Washic says is about average for a large used parts dealer. What’s unusual is the number of turns Cleveland Brothers gets on its inventory. Where an average dealer might get one turn on used parts inventory, Cleveland Brothers is on track to get four-and-ahalf turns in 2012. “The used business is unique in how you manage and price your inventory,” said Thompson. “You have to have a vision for what to buy; the knowledge of the investment you need to put into that product to refurbish it; and then you have to price and market it.” Demand and availability are among the biggest factors in setting price. Washic believes the collaboration between the two departments as well as the CAT dealer network helps them leverage their knowledge to make intelligent decisions. Every trade-in machine is thoroughly evaluated and inspected by three experts to determine the extent of repairs needed and to determine if it will sell used or become a parts salvage machine. Inventory needs to reflect global demand as well as the demand for parts and machines within their territory. “Gathering information is an ongoing process,” said Thompson. Listening to Customers Listening to customer requests has also paid off. Whereas most CAT dealers are strictly selling used earthmoving equipment, Cleveland Brothers also sells rebuilt on-highway truck engines to the company’s truck engine division. In the last year the company increased used parts sales through its truck division by 75 percent. “If we see a need that is not being filled for our customers, we are trying to address that need so we capture the sales, and somebody else doesn’t.” Washic believes that most dealers are playing a catch-up game in the markets for used parts because it hasn’t been their focus. He contends that not stressing the quality and value of branded parts has allowed aftermarket suppliers to gain marketshare. Washic credits Cleveland Brothers’ management for recognizing the potential of the used market and providing their team with the tools to succeed. “It does pay to be aggressive in the used market, and marketing is a big part of it.”
Clockwise, from top left: Matt Washic, Bob Thompson, Dean Tressler, Sherry Masisak, Bill Baughman December 2012 | Construction Equipment Distribution | www.cedmag.com | 61
Unearth best practices with AED Performance 20 Group members Sell or rent? How to depreciate? Best pay plans? Effective service pricing? Parts on demand? Members of an AED Performance 20 Group donâ&#x20AC;&#x2122;t need to dig for answers for long. AED Performance 20 Group members meet to compare past successes and failures among the group in order to benefit the opportunistic dealer. During meetings, AED Performance 20 Groups discuss: how to achieve higher profits and greater employee productivity, practical solutions to common construction dealer problems, and create concrete financial objectives for members. To learn more, simply email sheila.York@adp.com or call her directly at 703.889.6425.
Please visit us in CONDEX Booth 207.
On the Numbers
You Say Rental is Going Great, But How Do You Know? If you don’t know where the bar is set, you might be leaving money on the table. BY GARRY BARTECKI
And so Election Day came and went. The hope for increased consumer confidence, as well as movement toward energy independence and the related boost to the construction industry has dimmed. The incumbent occupant of the White House will continue to have an effect on your business, including the ultimate value of your business. And I expect more of the same: more public and union employees, higher taxes, and more effort put into avoiding those taxes. Last month I mentioned how the rental business is becoming a material segment of the dealer business. And since then, The AED Foundation produced our second CFO/Rental Conference, which was again well attended with plenty of discussion about the rent-to-rent business and how individual dealers are handling the transition and business risk associated with this changing paradigm shift toward pure rental. I guess the best part of these two conferences were the discussions how dealers were handling various aspects of the rental business. What impressed me most were the different methods used by the attendees, to the point where it would be tough to determine how each dealer compared to the other. As a result, if I asked a dealer “How is your rental business doing?” and the response was “We are doing great!” my response would be, “How do you know?” The results of these two Rental Conferences lead me to believe AED needs to provide more education about rental operations and benchmarking data for dealers who do want to know how they are doing. The attendance list from both Rental
Conferences was made up of very accomplished dealers, mostly on the large size, with what they say is a very considerable rental component. What we also had, however, was a large mix of business policies, tax policy, accounting structure, financial statement presentation and even overall differences of what constitutes a rent-to-rent business. In my mind, we primarily had dealers in the rent-to-sell business, some who are somewhat in the rent-to-rent business, some mostly in the rent-torent business and some actually in the rent-to-rent business with a full understanding of what that means. The mix in rental operation types and their varied business policies would make it tough to benchmark them against one another. There is no doubt that pure rental offers better margins and cash flow than sales if properly managed. If we take a look at the public rental companies we can see how they invest in their rental business, how long they keep rental units in the fleet, how much they make when they divest units from the fleet, how they finance these fleets, and how the market values this type of enterprise. The point is, every rental business should look somewhat similar to what these public rental companies look like if a dealer hopes to duplicate the operating results of a rental company. For example: Rental assets would be accounted for as rental assets, with an expectation of remaining in the fleet for (in most cases) a five- to eight-year period. Rental time and dollar utilization would produce five to eight years of rental revenue representing a return
of 25-30 percent per year against the purchase cost. Rental assets would be depreciated down to the expected residual value at the time the unit is expected to be divested from the fleet. Rental assets would be sold at a profit in the normal course of business. At least 50 percent of the rental fleet would be “in the money” to compensate for downturns in the business cycle when fleet size may need to be reduced to generate cash. In summary, rental assets would generate maximum revenue and cash flow and produce maximum ROIs over the rental cycle. My concern is dealers who go half way into the rental business will only get half of the rental benefits (if that), while taking on the balance sheet exposure associated with rental. Where rental should improve overall operating results and returns, there will be cases where not being fully committed to rental could reduce overall operating results. Based on my experience during these two Rental Conferences, dealers need more training in all aspects of the rental business. One great way to do that is to join a 20 Group designated as a “Rental Group,” with plans to concentrate on rental activities so that the next time someone asks how you know you are operating your rental business in a satisfactory manner you will actually know. This Rental 20 Group is in the works. Call me if you are interested. GARRY BARTECKI (gbartecki@ aednet.org) is AED’s vice president of Finance.
December 2012 | Construction Equipment Distribution | www.cedmag.com | 63
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Knowledge. Delivery. Truth.
Aftermarket
‘New Reality’ Means Achieving Your Potential Value those talented product support people of yours, and make sure your customers know what you’ve got. BY RON SLEE
I have worked in this industry the company combined. High perforfor more than four decades now mance dealerships generate 50 and I love it every bit as much today percent of the total sales volume as when I first started. Can you from parts and service, and they believe that? absorb the expenses of the sales I have been blessed to be doing and administration departments something as my life’s work that I and the interest expenses – notice I truly enjoy. I love the equipment, the excluded the rental group (the rental parts business, the service business, group did not exist when the absorpthe selling aspect of the channel and tion measure was created). The only the operational opportunities that caveat I will put on absorption is that we confront daily. I particularly enjoy there are expense standards for sales the hardworking, talented people and administration that must be met. with whom I have the chance to Product support is critical. work year in and year out. There is still one other looming And I can’t believe the number of issue that I need to review at this challenges we have had to confront year-end: “The New Reality.” I or the degree of difficulty represtarted talking and writing about sented by some of them. Nor can “The New Reality” in 2008. This I believe the changes in managewas my version of the PIMCO New ment methods and approaches; or Normal. I am not much interested technology, both in equipment and in sitting on my laurels and blaming systems, during those four decades. my woes on the market conditions There has been a lot to do for a within which I am working. The consultant/educator like me. market is what the market is and it One of the things I have always is our reaction to the market that is been passionate about is people, more important. I suppose you will particularly the talented people we call me an optimist, but I can’t help have working in product support. but think that we can always do You know, I call them your heroes something a little bit better, we can for the work that they perform daily always retain one more customer, we to serve customers in their jobs. can always sell just a little bit more, Customer service is not a game for we can always learn something new. wimps. You have to know what We can make the market a little bit you are doing, you have to care for better by our actions and deeds. people – sometimes in extremely I want dealers to capture more of challenging moments – and you have the parts and service market. I want to bring your A game every hour of you to stop losing customers. I want every day. Consistency is the hallmark to develop more skills in all of the of customer service, and you have employees through ongoing training to be adaptable to change. This is a and learning. I want to address tough job even at the best of times. this “New Reality” head on and in Product support is the backa manner suited to the market. In bone of our industry. We have more product support we are dedicated to customer contact than the rest of reducing the owning and operating
costs for our customers. That is our job, our mission. That means we cannot let the customers purchase parts and services that run contrary to that mission. Buying parts and services that have a lower price is not necessarily a good thing. Buying high value is always a good thing. We provide high value but in many cases we hide it. We need to stand up. We need to talk about value, we need to have standard pricing in the service group, we need to find every part every day in the parts group, and we need to do our job consistently and at the highest level of service possible. You see, that is the New Reality – reaching our potential. I use the following example in classes: When someone tells you that you have a lot of potential when you are 16 that is a good thing; but if they say that when you’re 66, it ought to make you pause. I wish you all the Season’s best. Good health for you and your family, success for you professionally and personally, and all the best for 2013. Let’s make it the beginning of a new growth spurt. The time is now.
RON SLEE (ron@rjslee.com) is the founder of R.J. Slee & Associates, Rancho Mirage, Calif., celebrating more than 30 years in business in the United States, a consulting firm that specializes in dealership operations. Ron also operates Quest Learning Centers, a company that provides training services specializing in product support, and Insight (M&R) Institute, a company that operates and facilitates “Dealer Twenty” Groups. Follow Ron on Twitter: @RonSlee; and read his blog at learningwithoutscars.com.
December 2012 | Construction Equipment Distribution | www.cedmag.com | 65
Washington Insider
Equipment Industry Can’t Afford To Be Passive About New Tax On Passive Income Construction equipment distribution companies are about to become victims of a law of unintended consequences. BY CHRISTIAN KLEIN
Most of our readers are probably familiar with the headaches passive loss issues have caused for the equipment industry over the years. Rules adopted in the 1980s were designed to prevent wealthy individuals from using losses from passive activities to avoid paying income taxes. However, due to anomalies in the Internal Revenue Code and Internal Revenue Service (IRS) rules, the income and losses that equipment companies derive from renting bulldozers and other machines to contractors are considered “passive.” The passive issue has taken on new urgency since the enactment of the Affordable Care Act (aka, Obamacare), which imposes a new 3.8 percent tax on passive income effective Jan. 1, 2013. On that day, many AED members will find themselves subject to a tax they were never meant to pay. The tax was designed as an “unearned income Medicare contribution tax.” In the case of an individual (most equipment distribution companies are pass through entities, so the companies’ taxes are those of the individual owners), the tax is 3.8 percent of the lesser of net investment income or the excess of modified adjusted gross income over the threshold amount ($250,000 in the case of joint return or surviving spouse, $125,000 in the case of a married individual filing a separate return, and $200,000 in any other case). According to the Joint Committee on Taxation, “In the case of trade or
business, the tax applies if the trade or business is a passive activity with respect to the taxpayer or the trade or business consists of trading financial instruments or commodities … The tax does not apply to other trades or businesses conducted by a sole proprietor, partnership, or S corporation.” In other words, in creating the new tax, Congress sought to limit its applicability and only ensnare a select group of individuals (those deriving income from passive activities and financial traders). Congress did not intend the law to apply to companies like equipment distributors. However, due to the complexity of the tax code and related regulations, companies that rent equipment have fallen into a trap and will be forced to pay a tax that was not meant for them. Congress has exempted certain industries from passive loss rules. Legislation enacted in 1993 clarified that real estate rental activities are not passive activities for those in the real property business (i.e., “real estate professionals.”) The Internal Revenue Services has also carved out other exceptions through regulation. Unfortunately, because of the way business is done in our industry (e.g., longer term rentals and 28-day contracts with automatic renewal clauses), the exceptions don’t generally apply to equipment distributors. So now, AED, with expert assistance from tax guru Steve Pierson at Selden Fox, is taking the issue to the Hill. We’re making the case that
equipment distributors have fallen through a crack in the law and that if Congress doesn’t act immediately, our members will suffer economic harm. The good news is that the exception for the real estate industry provides a compelling precedent. Our proposed legislation mirrors the real estate carve-out almost exactly, which should make it an easier sell. But make no mistake, this is a heavy lift and in the current environment, the chances of success are slim at best. As CED went to press, the dust was still settling from the 2012 elections and the agenda for the lame duck session of Congress was just taking shape. In addition to the more than $200 billion worth of expiring tax cuts, lawmakers also have to figure out how to deal with $84 billion worth of expired or expiring tax extenders like the research and development tax credit. Whether we’ll be able to get a new issue into the mix remains to be seen, especially since lawmakers seem poised to punt all these issues into the next Congress and try to resolve them comprehensively as part of a bigger tax and budget reform package. If we’re to have any chance of success, it’s going to take a massive and swift grassroots effort. If you want to help, please call or e-mail me. CHRISTIAN KLEIN (caklein@aednet.org) AED’s vice president of Government Affairs and Washington counsel. He can be reached at 703-739-9513.
December 2012 | Construction Equipment Distribution | www.cedmag.com | 67
New & Improved
Doosan Portable Power Redesigns LSC Light Tower with Upgraded Powertrain Doosan Portable Power has redesigned the LSC (LightSource Compact) portable light tower with a new powertrain, equipped with a Kubota D1005 engine. This 1,800-rpm watercooled diesel engine meets EPA Tier 4 final emission regulations. The power rating of the LSC has been increased to 6 kW with the utilization of a new high output alternator. This additional voltage allows operators to illuminate the unitâ&#x20AC;&#x2122;s four 1,000-watt metal halide floodlights and utilize the receptacle power function simultaneously. An increased fuel tank capacity extends the LSCâ&#x20AC;&#x2122;s runtime to 55 hours. A compact frame design makes it possible to accommodate 12 fully assembled units on a standard flatbed
trailer for more cost-effective transportation. A small curbside door allows operators to safely access the controls without having to open the entire side panel. Integrated hinges have also been added to the street-side to provide easy access to all interior general maintenance components. The floodlights of the LSC portable light tower provide a NEMA 6 x 7 beam spread for broad light distribution and area coverage. The LSC light tower is backed by a factory warranty providing two-year / 2,000hour bumper-to-bumper coverage. For more information visit doosanportablepower.com
Fecon Introduces the FTX400 High Performance Mulching Tractor Fecon Inc. is proud to introduce the FTX400 as the latest addition to their Fecon line up of high performance mulching tractors. This tractor brings the best combination of cutting performance, track power and serviceability in the 400 hp class of mulching machines. Equipped with the Cummins QSM11 400hp engine, the FTX400 delivers aggressive hydraulic flow to the variable speed mulching head and solid power to the hydrostatic all steel oscillating undercarriage. Fitted with the Fecon BH300 Bull Hog, the FTX400 can achieve 98-inch effective cutting height and 32-inch below grade reach, giving the operator unparalleled range of motion. The FTX400 is ideal for a wide range of applications including pipeline and power line right of way clearing, large-scale
vegetation management and site preparation. Designed for durability and built for performance, the FTX400 is the logical choice for demanding land-clearing applications.
Badger-CD4415 Rough Terrain Crane Targets Oil, Gas & Mining Markets Manitex International, Inc. recently launched the Badger CD4415 Rough Terrain Crane, which can be configured to serve a variety of industrial niche end-markets including the oil, gas, and mining applications. The features of this new crane include fourwheel drive and four-wheel steering, multiple boom configurations, highly visible, ergonomically engineered two-door cab with joystick controls, and integrated safety features, such as steps and handrails. The CD4415 has a 15-ton rating at a 10-foot working radius, maximum boom length of 62.5 feet and maximum tip height of 85.5 feet, which makes it ideal for use when a 15-ton capacity is required and operating within a fairly tight space. For more information visit www.badgerequipment.com
68 | www.cedmag.com | Construction Equipment Distribution | December 2012
For more information visit www.fecon.com
New & Improved
Dromone’s Full Range of Tilt Buckets Delivers Safety, Dependability Dromone Engineering, an industry leader in hitching technology for construction and agricultural markets, continues its North American expansion with its full range of Dromone tilt buckets. Each can be fitted directly to an excavator or in conjunction with a Quick Coupler. Dromone tilt buckets feature 90-degree bucket rotation (45-degree rotation to the left and right) and are ideally suited for a full range of customer applications that include backfilling, ditch cleaning, grading, land clearing and sloping work/shaving. Like all of its products, Dromone tilt buckets are designed for customers around the world and are built with safety and reliability. Dromone continues to focus efforts around expanding its U.S. presence and product availability. Dromone’s products are currently available for export to 39 countries. Dromone tilt buckets feature dual layer bucket skin and a durable structural design for unmatched strength. Hardened, sealed pins, combined with wear-resistant insert bushings, ensure optimal performance and low maintenance costs. Protected greasing points, hardened pivot and cylinder pins, an optional reversible bolt on the cutting edge and protected, wire-guarded hoses help ensure long life and durability. For more information visit www.dromone.com/us
Commercial Web Services Releases Mobile App for Dealers Commercial Web Services (CWS), a division of Dominion Enterprises, has introduced a dealer maintenance iOS app that allows dealerships to upload inventory images and access inventory data via iPad, iPhone, or iPod Touch. This product will accommodate growing technology trends as well as the busy lifestyles of dealers. CWS is a comprehensive website solutions provider for the equipment, agricultural and commercial truck industries. The mobile app provides dealers with an easy-to-use
tool to upload inventory pictures and can also serve as an on-the-field resource for dealership sales employees. Sales departments will have access to their dealerships’ website inventories, serving as a quick reference resource on specifications and availability via any iOS device. Dealers can begin taking advantage of the free mobile app immediately by downloading the app from the iTunes Store. For more information visit www.commercialwebservices.com
ESCO Debuts New Hydraulic Coupler ESCO Corporation, a leading global provider of wear parts and attachments for the mining and construction industries, has developed a new hydraulic coupler that gives machine operators a simple connection to attachments and provides enhanced site safety. ESCO’s new PosiGrab coupler features both front and rear locks that are mechanically engaged through the full working cycle. The natural position of the coupler is locked and only opens using forced hydraulic pressure. The connection and release of an attachment, including the visual confirmation that the locking mechanisms are engaged, is done without the operator leaving the safety of the cab. Along with the safety and ease-of-use benefits, PosiGrab coupler was engineered to reduce stress on attachments and machines. For more information visit www.escocorp.com
December 2012 | Construction Equipment Distribution | www.cedmag.com | 69
New & Improved
Yanmar America Introduces New 5 kW mCHP Energy System Yanmar America’s new 5 kW mCHP (micro-Combined Heat and Power) system, CP5WN complements the current 10 kW system, CP10WN, and is designed for use in smaller settings than its 10 kW predecessor. Powered by natural gas or propane, the high-efficiency, co-generation unit reduces primary energy consumption by using the waste heat produced during the production of electricity to enable significant energy savings. Just like the 10 kW system, the new 5 kW system can be used in both residential and commercial settings. The CP5WN is ideal for residential homes up to about 8,000 square feet; and, its commercial uses include: restaurants,
small office buildings, laundromats, small hotels, standalone retail establishments and fitness centers. The co-generation design of the CP5WN makes it 84-percent efficient compared to 33-percent efficiency attained using a traditional utility plant. And, the annual savings on utility costs can be as much as $15,000 in either a commercial or residential setting. For more information visit us.yanmar.com
Terex AL4L LED Light Towers Now Equipped with Shoreplug Connector The ShorePlug connector is now standard on all new Terex AL4L generator LED light towers. The ShorePlug connector allows multiple light towers to be connected in-line and operate from a single power source. Terex LED light towers offer crisper lighting capabilities and consume far less electrical power compared to 4000W metalhalide models. The ShorePlug connector makes it quick and easy to take advantage of the power efficiency of these LED lights by safely and securely connecting multiple
Terex AL4L light towers in-line to operate from a single Terex AL4L generator model. This reduces fuel consumption and engine noise when compared to operating metal halide light towers with individual generators. LED lights last five times longer than metal-halide lights. The LED towers have instant on/off operation. Low light pollution and sharp side cut-off reduces road glare to motorists, making the LED light towers ideal across a wide range of applications. For more information visit www.terex.com
Atlas Copco Introduces New SB 702 Hydraulic Breaker Atlas Copco’s SB 702 hydraulic breaker is designed with a solid body, a feature no other breaker in the 1,500-pound class has. It has been engineered to consume less fuel, produce lower vibration levels and create less noise. It’s a breaker well suited for landscaping, construction and demolition jobs among other applications. The unique, solid body of the SB 702 is compact and easy to handle. The percussion mechanism and guide system are incorporated into a single block of steel, eliminating the need for side bolts. The low maintenance, integrated accumulator is easy to access, but protected
from harsh work conditions. With a wide oil flow range, the Atlas Copco SB 702 can be installed on a variety of carriers. A protection valve prevents damage to the breaker and helps avoid downtime in the event of a hydraulic overload. The 702 is also designed with double tool retainer bars to minimize stress and wear on the working tools. The patented retainer bar lock system and the floating lower bushing can be replaced by the operator on-site with standard hand tools.
70 | www.cedmag.com | Construction Equipment Distribution | December 2012
For more information visit www.atlascopco.com
New & Improved
Powerscreen Launches Warrior 1400X Screen The new Powerscreen Warrior 1400X screen offers improved performance, lower operating costs, and easier serviceability while building on the reliable foundation of our class-leading Warrior 1400 scalper. The 1400X has been designed with economy in mind, with reduced engine running speed and enhanced hydraulics, the 1400X offers a reduction in fuel consumption of up to 15 percent compared to its predecessor. Improved versatility and design specifications are other key achievements of the Warrior 1400X, with the screening angle range widening of 13-19 degrees. Standard stockpiling capacity on all conveyors has increased by up to 25 percent. With the chassis riser option and the telescopic side conveyor option, the fines and mid-grade stockpiling capacity is increased to more than double that of a standard Warrior 1400. Serviceability features include a class leading screen box raise function and the unique ability to raise the collection
conveyor. Optimal chute design in conjunction with the new feeder under-tray slide-out feature will minimize any potential spillage and reduce any harmful material buildup around the machine. A two speed tracking system is standard. The high-speed mode is further enhanced with automatic engine speed ramp-up making the 1400X the fastest tracked machine in its range. For more information visit www.powerscreen.com
ADVERTISERS’ INDEX ADP Inc. Dealer Services . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Lowe Manufacturing Company, Inc. . . . . . . . . . . . . . . . . . . 25
Bernhardt Browne & Associates . . . . . . . . . . . . . . . . . . . . . 55
Manitex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IFC
BidSpotter.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
MKT Manufacturing, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 53
BLS Enterprises, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
PFW Systems Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
BOKF Equipment Finance Inc. . . . . . . . . . . . . . . . . . . . . . . . 43
PriSim Business War Games, Inc. . . . . . . . . . . . . . . . . . . . . . 66
Briggs & Stratton Corporation . . . . . . . . . . . . . . . . . . . . . . . 19 Breaker Technology, Inc. (BTI) . . . . . . . . . . . . . . . . . . . . . . . 33 DIS Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 DYNAPAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 EPG Insurance, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Heavy Const., JRB, C&P, Badger Div. . . . . . . . . . . . . . . . . . . 45 HKX, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 HydrauliCircuit Technology . . . . . . . . . . . . . . . . . . . . . . . . . 51
Ritchie Bros. Auctioneers . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 SANY Heavy Industry Co., LTD . . . . . . . . . . . . . . . . . . . . . . . 9 Sentry Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Vacuworx International . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Veritas Risk Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Webasto Product North America, Inc. . . . . . . . . . . . . . . . . . 46 Wedgelock North America . . . . . . . . . . . . . . . . . . . . . . . . OBC
Hydrema Exports A/S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Wells Fargo Equipment Finance. . . . . . . . . . . . . . . . . . . . . . 21
Infor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Werk-Brau Company, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . .IBC
Knapheide Manufacturing Company, The . . . . . . . . . . . . . . 31
Woods Equipment Company. . . . . . . . . . . . . . . . . . . . . . . . 47
LiuGong Construction Machinery . . . . . . . . . . . . . . . . . 36-37
WTP Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Loftness Attachments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
XAPT Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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 © 2011 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 non-members. Office of publication: 600 W. 22nd St., 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
December 2012 | Construction Equipment Distribution | www.cedmag.com | 71
Dealer Data
September Construction Jumps 16 Percent $4.8 billion liqueďŹ ed natural gas plant in Louisiana gave Septemberâ&#x20AC;&#x2122;s nonbuilding starts a big lift. Monthly Construction Starts Seasonally Adjusted Annual Rates, In Millions $
Year-To-Date Construction Starts Unadjusted Totals, In Millions $
September 2012
August 2012
% Change
-5
$507,199
$436,674
+16
Nonresidential Building Residential Building Nonbuilding Construction TOTAL Construction
Nonresidential Building Residential Building Nonbuilding Construction TOTAL Construction
9 Mo. 2012
9 Mo. 2011
% Change
$349,599
$333,813
+5
Source: McGraw-Hill Construction
New York, N.Y. â&#x20AC;&#x201C; October 17, 2012 â&#x20AC;&#x201C; New construction starts in September climbed 16 percent to a seasonally adjusted annual rate of $507.2 billion, it was reported by McGraw-Hill Construction, a division of The McGraw-Hill Companies. The nonbuilding construction sector (public works and electric utilities) led the way, helped in particular by a massive natural gas plant and several very large electric utility projects. Meanwhile, nonresidential building retreated after its improved performance in August, and residential building eased back slightly. Through the ďŹ rst nine months of 2012, total construction starts on an unadjusted basis came in at $349.6 billion, up 5 percent compared to the same period a year ago. â&#x20AC;&#x153;If electric utilities and gas plants are excluded, the level of construction starts in 2012 would be up 2 percent year-to-date, helped by this yearâ&#x20AC;&#x2122;s further growth for multifamily
housing and the emerging recovery for single-family housing,â&#x20AC;? stated Robert A. Murray, vice president of economic aďŹ&#x20AC;airs for McGraw-Hill Construction. â&#x20AC;&#x153;As for the other construction sectors, commercial building has shown some strengthening during 2012 â&#x20AC;&#x201C; while its dollar amount has grown less than 1 percent yearto-date, square footage is up 16 percent. However, decreased activity continues to be reported in 2012 for institutional building, manufacturing plants, and public works. Going into 2013, itâ&#x20AC;&#x2122;s not expected that electric utilities will be able to maintain the record pace witnessed in 2011 and 2012, and tight government budgets will restrain the institutional building and public works sectors. It will be up to housing and commercial building to provide upward momentum, and the impending â&#x20AC;&#x153;ďŹ scal cliďŹ&#x20AC;â&#x20AC;? makes continued growth for these sectors less certain.â&#x20AC;?
The Dirty Dozen 8&& Ă&#x20AC;OLQJV RQ HDUWKPRYLQJ XQLWV Equipment Description
SEP 11
OCT 11
NOV 11
DEC 11
JAN 12
FEB 12
MAR 12
APR 12
MAY 12
JUN 12
JUL 12
AUG 12
Grand Total
34
43
41
54
50
35
44
63
86
58
48
102
658
194
236
289
313
279
159
213
278
247
269
240
253
2,970
5
5
4
3
6
5
4
12
4
1
4
3
56
381
367
388
554
564
286
418
494
563
568
471
552
5,606
21
22
25
44
35
14
21
21
17
31
19
35
305
Mini Excavators
433
448
393
506
646
386
458
662
714
635
554
616
6,451
Motor Graders
108
107
90
100
102
79
88
85
105
108
95
78
1,145
Articulated Dump Trucks Crawler Dozers Crawler Loaders Excavators - Crawler, Hydraulic Excavators - Wheeled, Hydraulic
8
5
4
6
5
3
10
3
13
4
8
69
Skid-Steer Loaders
825
869
1,205
1,457
1,198
729
808
867
976
868
826
807
11,435
Tractor Loader Backhoes
280
329
322
351
387
222
282
294
300
326
295
348
3,736
44
46
68
82
55
43
33
36
56
43
38
38
582
432
4,911
Scrapers - Conventional
Wheel Loaders < 80 HP Wheel Loaders > 80 HP Grand Total
393 2,726
292
345
393
2,819 3,271 4,043 3,869 2,253
342
442
573
2,714
3,215
Supplied by Equipment Data Associates, Charlotte, N.C.
72 | www.cedmag.com | Construction Equipment Distribution | December 2012
542
447
348
3,518 3,268
362
2,956 3,272 37,924
Please visit us in CONDEX Booth 728.
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