September2016AEDExclusiveAnalysis by Associated Equipment Distributors

September 2016

CED

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

AED Exclusive Analysis Review how your U.S. Representatives and Senators voted on issues that matter most to distributor businesses

n Tier 4 Benchmark Report

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contents CED Magazine | September 2016

vol. 82 no. 9

www.cedmag.com

>> FEATURES AN AED EXCLUSIVE REPORT

Taking the Top Off the Ticket An AED exclusive analysis of how your representatives and senators voted on issues that matter to distributor businesses Engine off. Climate on. With Engine-Off Heating and Cooling Systems.

Solutions-Based JCB Provides Innovative Results CFO Gayle Humphries says her company’s growth is currently up nearly 50 percent.

63 Tier 4 Benchmark Report EquipmentWatch and AEMP partnered to survey the heavy equipment community in the interest of gauging how heavy equipment operators are implementing new technology to meet Tier 4 emissions standards, as well as to better understand the reality regarding the regulation’s impact on the industry.

THE 2016

TIER4 BENCHMARK REPORT

Webasto: Increasing Productivity, Cutting Costs With locations around the globe, Webasto has ‘unlimited resources’ to get its customers’ jobs done.

On The Cover No matter the conditions, PRINOTH machines shine.

THE HEAVY EQUIPMENT INDUSTRY’S MOST COMPREHENSIVE REPORT

September 2016 | Construction Equipment Distribution | www.cedmag.com | 3

contents

>> EDITORIAL TEAM CED Magazine Director SARA SMITH ssmith@aednet.org Design and Layout KRIS JENSEN-VAN HESTE kjvanheste@gmail.com

>> FEATURED COLUMNISTS Christine Corelli Corelli Associates Maureen A. Murphy Kopon Airdo, LLC Troy Ottmer Doggett Heavy Machinery Services LLC Steve Johnson Vice President, Foundation Operations Troy Harrison Sales Navigator Accruit AED Preferred Provider John Chapin Sales Encyclopedia

CED Magazine | September 2016

vol. 82 no. 9

>>COLUMNS

20 >> Regional Report

A glimpse into the 2016 AED Ottawa Briefing

Questioning the Cuba embargo

How an enterprising AED member used the Republican National Convention as a platform to build Ohio’s technical workforce of the future.

22 >> Washington Insider

38 >> Conventional Opportunities 42 >> Lead Generation

Marsha Friedman EMSI Public Relations

Are you “referral-worthy”?

44 >> Department of Labor

Rex Collins HBK CPAs and Consultants

Here's what the new DOL overtime rule means for your company.

Eric Stiles, Sentry Insurance AED Preferred Provider

48 >> Problem Solved

Dayna Maeder Freelance writer

Supporting the customer after the sale.

50 >> VeriTread Aims to Do the Impossible

>> ADVERTISING CONTACTS

Game-changing strategies and innovative results fuel its core business.

Construction Equipment Technician Careers

It’s all about “figuring out your Fred.”

Accruit explains how a successful 1031 like-kind exchange requires careful planning

What leadership needs to know about sales

How social media can make or break your brand

Don’t leave profits on the table

Sentry Insurance explains the associated risk with selling equipment from overseas.

Vice President of Sales JON CRUTHERS 800-388-0650 ext. 5127 jcruthers@aednet.org Advertising Sales Manager ALBERT J. RAMIREZ 800-388-0650 ext. 5117 aramirez@aednet.org Production Manager MARTIN CABRAL 800-388-0650 ext. 5118 mcabral@aednet.org Since 1920 Official Publication of

52 >> Dealer Development 55 >> Defining Consumers

58 >> AED Preferred Provider 60 >> Leadership Role

68 >> Social Experience 70 >> Internal Repairs

650 E. Algonquin Road, Suite 305 Schaumburg, IL 60173 630-574-0650 fax 630-457-0132

72 >> AED Preferred Provider

4 | www.cedmag.com | Construction Equipment Distribution | September 2016

Event Spotlight Your Starting Line for a Successful Year At AEDâ&#x20AC;&#x2122;s Summit & Construction Dealer Expo ( CONDEX) you can attend dealer-specific education sessions, network with your peers, and discover new product lines and business solutions for your dealership. Whether youâ&#x20AC;&#x2122;ve been serving the North American equipment market for decades or just entering the industry, it is easy to connect with your peers in one location. Mark Your Calendar: Summit & CONDEX January 10-13, 2017 Hyatt Regency Chicago Chicago, Ill.

Get Social with AED!

Two Ways to Register:

Connect with AED on our new social media platforms.

Mention us on Twitter @AEDSocial Like us on Facebook @ Facebook.com/AEDSocial

For more information please visit: www.aednet.org. Ad_template.indd Template1.1.indd 29 2

29 4/13/2016 10:21:45 AM 3/8/2016 3:43:30 PM

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

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

CallCenter.indd 9

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

1/14/2016 2:40:14 PM

>> FROM THE PRESIDENT

BRIAN P. McGUIRE

Grow Your Dealership with AED’s Professional Development Opportunities Our industry is ever-changing. Just like we are constantly evolving and learning as individuals, so is our industry. There is always something more to learn or higher to strive for within our careers. Professional development is a vital part of these successes. Keeping up with the demands of our industry can be challenging. For those reasons and many more, one of AED’s biggest goals is to make professional development opportunities readily available for our members. We want to see our members grow as businesses and also as professionals. We provide a number of in-person professional development opportunities, from seminars and conferences to virtual opportunities like webinars and self-study courses. The AED Foundation specifically focuses on the success of our members through continuous learning. The AED Foundation Skills Gap Report presented by William & Mary College found that professional development is more important now than ever (you can download a copy of this report at bit.ly/aedworkforce). The skills gap issue, a problem that has been building

for years, means that highly technical skilled workers are in short supply, causing major setbacks to dealerships, financially and otherwise. This report stresses the importance of coordinating programs for educators and accessing workforce development funds for technically focused programs. This is also where the AED accreditation program comes into focus. The accreditation program ensures that upcoming professionals are taught thoroughly and properly to perform their jobs at high levels. The AED Foundation also offers webinars and self-study courses that can be viewed or completed on your own time, from work or at home. These are some of the most readily available and easy-to-access professional development courses that AED provides, and they are beneficial to employees at any level of your dealership. Our biggest conference of the year is right around the corner, and it provides some of our best professional development opportunities. AED Summit’s breakout sessions this year, led by some of the most engaging and knowledgeable

speakers, include topics such as customer engagement, people management, product support, rental and sales, and small dealers. Our keynote speakers, former vice president Dick Cheney, TV personality Daymond John and 9/11 first responder Richard Picciotto, will give insight on reaching personal goals and managing critical situations (go to aedsummit.com to register or for more information). This conference will give you momentum to start the year off strong. It will not only provide you the opportunity to network and enhance your awareness, but also numerous avenues for learning. We look forward to seeing you there. We should all strive to continue to learn throughout our lives, especially in our careers. AED realizes the importance of professional development not only to your dealership, but also to your professional growth. We want to provide our members with the most thorough, convenient and beneficial professional development opportunities in the industry. We want to see you thrive.

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

ROBERT K. HENDERSON AED Executive Vice President & COO

JASON K. BLAKE AED Senior Vice President & CFO

>> OFFICERS

>> AT-LARGE DIRECTORS

>> REGIONAL DIRECTORS

WHIT PERRYMAN Chairman Vermeer Texas-Louisiana WES STOWERS Vice Chairman Stowers Machinery Corp. DIANE BENCK Senior Vice President West Side Tractor Sales Co. TODD HYSTAD Vice President Vimar Equipment Ltd. MICHAEL D. BRENNAN Vice President Bramco, LLC JOHN C. KIMBALL VP of Finance Kimball Equipment Company DON SHILLING Immediate Past Chairman General Equipment & Supplies, Inc. DENNIS VANDER MOLEN Foundation Chairman Vermeer MidSouth Inc.

TODD BACHMAN Florida Coast Equipment, Inc.

RON BARLET West Reg. Bejac Corp. CRAIG DRURY Eastern Canada Reg. Vermeer Canada Inc. RYAN GREENAWALT Midwest Reg. Alta Equipment Co. TODD HYSTAD Western Canada Reg. Vimar Equipment Ltd.

JAMES P. COWIN Cowin Equipment Co., Inc. GAYLE HUMPHRIES JCB of Georgia LARRY R. MILLER Kelbe Bros. Equipment Co. Inc. JOHN SHEARER 4 Rivers Equipment, LLC KENNETH E. TAYLOR Ohio CAT

GILES POULSON Rocky Mountain Reg. Faris Machinery Co. JOHN RIGGS IV South Central Reg. J A Riggs Tractor Co. JAY RODES Southeast Reg. Wilson Equipment Co., LLC KAREN ZAJICK Northeast Reg. Norris Sales Co.

September 2016 | Construction Equipment Distribution | www.cedmag.com | 7

If you don’t know your NUMBERS then you don’t know your BUSINESS The 2016 Cost of Doing Business Report provides two key sets of numbers that you can’t get anywhere else; performance guidelines and performance comparisons.

2016 cost of doing business report AED’s Cost of Doing Business (CODB) Report identifies key industry trends, issues and challenges within your dealership. Arm yourself with the knowledge of how you stack up against the competition and make the report work for you. The CODB report provides the most comprehensive set of benchmarks available on financial performance in the equipment distribution industry. You’ll be able to easily assess how your business is doing compared to similar dealerships and measure the success of your business based on key financial indicators. Download today at bit.ly/2016CODB

Performance Guidelines

Purchase your report online!

Performance Comparisons

The industry-overview report provides detailed information on what influences profitability performance in the industry. It emphasizes the key performance metrics such as sales size and gross margin. It identifies very clearly where firms should focus their attention.

Download the 2016 CODB report by visiting bit.ly/2016CODB (link is case-sensitive).

•

Evaluate operating ratios against medians of other distributors by geography and size

•

Provides a comparative analysis of distributor performance by sales volume

•

A look at gross margins for new and used equipment, rentals, parts and service departments

members

$595.00

nonmembers

$1,190.00

Website: www.aednet.org Phone: 630-574-0650 CODB.indd 1

7/21/2016 11:57:20 AM

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EPG Extended Service Protection Plans:

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Extended Service Protection Plans Dealer Corporate Package Loss Damage Waiver Physical Damage Insurance Dealer Fleet Protection Dealer E&O Certificate Tracking Service

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>> AED INSIDER AED WELCOMES OUR NEWEST MEMBERS ▶ Vermeer Mexico

International Distributor

▶ SpecSys Inc.

Specialized Service

▶ Dromone Engineering

Manufacturer

▶ Hi-Vac Corp.

Manufacturer

▶ Everdigm America

Manufacturer

▶ Lawrence Equipment

Distributor

▶ K-Tec Earthmovers

Canadian Manufacturer

▶ Bravo Capital LLC

Financial

▶ Northland JCB

Distributor

▶ Flaska JCB

Distributor

▶ Runzheimer

Specialized Service

▶ Owner Resource Group

Specialized Service

▶ Utility One Source

Distributor

▶ Construction Equipment

Sales & Rental Distributor

▶ Meade Tractor

Distributor

▶ Business Credit Reports

Specialized Service

▶ Machinio Corp.

Specialized Service

▶ CJD Equipment

International Distributor

▶ Arrowhead Insurance

Specialized Service

AED Urges Strong Support for Bill to Overhaul Career and Technical Education AED President and CEO Brian P. McGuire sent a letter to Speaker Paul Ryan (R-Wis.) and Democratic Leader Nancy Pelosi (D-Calif.) urging the House to act swiftly and decisively to approve the Strengthening Career and Technical Education for the 21st Century Act (H.R. 5587). The legislation, which was unanimously approved by the House Education & Workforce Committee, enhances, reforms and reauthorizes the Carl D. Perkins Act to address one of the most pressing challenges facing American businesses: the skilled worker shortage. McGuire’s call for action was rooted in stark data: the recently-released AED Foundation study by researchers at the College of William & Mary quantified the technician shortage’s economic impact on the equipment industry. The study found the following: • The technician shortage is costing AED members approximately $2.4 billion per year in lost revenue and economic opportunity. • The average job open rate for AED members – the percentage of jobs going unfilled – is 11.34 percent, more than three times the national average. • Distributors cite the lack of hard skills as the top reason technician positions are so hard to fill. • Seventy-eight percent of AED members don’t think local educational institutions – high schools, community colleges and technical schools – understand equipment dealer workforce needs and don’t believe curricula are aligned to meet those needs. • More than 50 percent of AED members said the skills gap had hindered dealership growth and increased costs and inefficiencies. But the technician shortage isn’t just a

problem for dealers; it’s also a problem for all the economic sectors AED members serve: Almost 75 percent of survey respondents said the technician shortage made it difficult to meet customer demand. “Simply put, by making technical education a priority, Congress can help better prepare workers for well-paying careers, and ensure that U.S. companies are able to seize new business opportunities and make the United States more competitive in the global economy,” McGuire’s letter said. “Businesses, schools and government officials must collectively commit to tackling the technical education crisis at all levels, and you can take a great step towards enabling that commitment by passing H.R. 5587.” To read the full letter, visit bit.ly/aedperkins. To download a one-page summary of the AED Foundation/William & Mary report, visit bit.ly/aedworkforce.

AED Mourns Passing of Rep. Steve LaTourette, Construction Industry Stalwart Brian P. McGuire, president and CEO of Associated Equipment Distributors, issued the following statement regarding the passing of former Rep. Steve LaTourette of Ohio. “With the passing of Rep. LaTourette we lost a great champion for the construction equipment industry. He was a stalwart, dedicated to doing what was right in Washington regardless of politics. Whether it was advocating for rebuilding our nation’s infrastructure or his work with the Main Street Republican Partnership ensuring pragmatic candidates were elected to Congress, Rep. LaTourette made a lasting imprint on Ohio, Capitol Hill and the nation.”

10 | www.cedmag.com | Construction Equipment Distribution | September 2016

>> AED INSIDER House Committee Members, Industry Organizations Unanimous in Support of Technical Education Bill The House Committee on Education and the Workforce unanimously approved the Strengthening Career and Technical Education for the 21st Century Act (H.R. 5587). The bill, introduced on June 28 by Reps. Glenn “GT” Thompson (R-Pa.) and Katherine Clark (D-Ma.), reauthorizes and reforms the Carl D. Perkins Career and Technical Education Act, which is the central federal investment mechanism for training in high-skill, in-demand jobs. On the same day the committee voted, AED joined more than 250 other organizations in a letter to the panel’s Chairman John Kline (R-Minn.) and Ranking Member Bobby Scott (D-Va.), urging action on the bill. The industry-wide coalition of signatories highlighted the broad appeal of career and technical education (CTE) improvements. Not only are all industries suffering from the inability to recruit and retain technically-skilled workers, the impacts of the skills gap on any individual sector inevitably ripple up and down customer supply chains. The association has long argued that

responsive federal workforce policy should provide states and communities with the tools necessary to stimulate the growth of skills that put students into jobs. The reauthorization bill provides a structure closely aligned with the goals expressed in AED’s legislative priorities: utilizing Perkins as a tool to further empower states to nurture the abilities in demand by employers. The legislation would do that by: • Aligning CTE programs to the needs of the regional, state and local labor markets. • Supporting effective and meaningful collaboration between secondary and postsecondary institutions and employers. • Increasing student participation in work-based learning opportunities. • Promoting the use of industry-recognized credentials and other recognized post-secondary credentials. Improving technical education programs is a business imperative for equipment distributors. A recent study sponsored by The AED Foundation and prepared by researchers at the College of William

& Mary found the technician shortage is costing distributors approximately $2.4 billion each year in lost revenue and economic opportunity. The study found the top reason technician positions go unfilled is that applicants lack the necessary hard skills. Curricula at high schools, community colleges and technical schools are not aligned with employer needs, meaning high-paying jobs are going unfilled. Congress worked hard in 2015 to restore certainty to federal transportation programs and tax policy through passage of the FAST and PATH Acts; unfortunately, the skills gap is preventing American businesses from fully capitalizing on the economic opportunities those laws have created. By passing H.R. 5587, lawmakers could continue to make good on their investment in American business and infrastructure. The bill now awaits consideration by the full House. Stay tuned to AED as the process moves forward, and tell your members of Congress to help build the technical workforce of the future.

Congressman Bradley Byrne Visits Beard Equipment Company Congressman Bradley Byrne recently visited with Beard Equipment Company in Mobile, Ala., to tour their facilities and discuss tax reform, infrastructure, and career technical education. As the former chancellor of Alabama Community Colleges, the congressman spoke passionately about developing the next generation of technical workers for companies like Beard Equipment.

September 2016 | Construction Equipment Distribution | www.cedmag.com | 11

>> AED INSIDER U.S. DOT Announces FASTLANE Grants The House Transportation & Infrastructure and Senate Environment & Public Works Committees’ leadership awarded initial grants under the U.S. Department of Transportation’s new Nationally Significant Freight and Highway Projects program. In all, 18 projects received $759 million. Referred to as “FASTLANE” grants, the program was created by the 2015 surface transportation reauthorization bill (the FAST Act) to help states and localities fund critical freight and highway projects across the country. The funds will help finance more than $3.6 billion in projects, which AED estimates will generate more than $230 million in equipment market activity (sales, rental and product support) for American dealers.

Project Name

State

FASTLANE Proposed Award

Total Project Cost

Interstate 10 Phoenix to Tucson Corridor Improvements

$54,000,000

$157,500,000

SR-11 Segment 2 and Southbound Connectors

$49,280,000

$172,200,000

Arlington Memorial Bridge Reconstruction Project

$90,000,000

$166,000,000

Port of Savannah International Multi-Modal Connector

$44,000,000

$126,700,000

I-10 Freight CoRE

$60,000,000

$193,508,409

Conley Terminal Intermodal Improvements andModernization

$42,000,000

$102,890,000

I-390/I-490/Route 31 Interchange, Lyell Avenue Corridor Project

$32,000,000

$162,900,000

US 69/75 Bryan County

$62,000,000

$120,625,000

Atlantic Gateway: Partnering to Unlock the I-95 Corridor

$165,000,000

$905,000,000

South Lander Street Grade Separation and Railroad Safety Project

$45,000,000

$140,000,000

I-39/90 Corridor Project

$40,000,000

$1,195,300,000

Truck Parking Availability System (TPAS)

$10,778,237

$23,983,850

Cedar Rapids Logistics Park

$25,650,000

$46,500,000

U.S. 95 North Corridor Access Improvement Project

$5,100,000

$8,500,000

Maine Intermodal Port Productivity Project

$7,719,173

$15,438,347

Cross Harbor Freight Program (Rail)

$10,672,590

$17,787,650

Coos Bay Rail Line – Tunnel Rehabilitation Project

$11,000,000

$19,555,000

Strander Boulevard Extension and Grade Separation Phase 3

$5,000,000

$38,000,000

$759,200,000

$3,612,388,256

THE AED FOUNDATION FUNDRAISING GALA

Tuesday, January 10 6 to 9 p.m. Join us at one of Chicago’s infamous speakeasies, Untitled Supper Club for an eventful fundraising night with sounds from the jazz age, a live auction, dinner, open bar and entertainment . Untitled Supper Club 111 W. Kinzie Street Chicago, IL 60654

Black Tie Attire Optional The AED Foundation is a 501 (c)(3) educational foundation and tickets are deductible to the extent under the law.

12 | www.cedmag.com | Construction Equipment Distribution | September 2016

>> AED INSIDER

Brett Levanto @LevantoAir Working for the workforce with @virginiafoxx and @OhioCAT1 at #RNCinCLE @AEDSocial

#AEDGetSocial

McCann Industries @McCann_Online We appreciate @RepLouBarletta taking the time to visit our Addison location. #AED #infastructure

Brett Levanto@LevantoAir Good morning Ohio! @AEDSocial

Peter Roskam @PeterRoskam Thank you for hosting me! Signature Worldwide @SignatureWorld Undercover Shopping - How Is Your Dealership Really Performing on @AEDSocial Construction Equip. Distribution Mag.

Brett Levanto @LevantoAir “The government is not an entity from us...the government is us.” @virginiafoxx #wethepeople #RNCinCLE @AEDSocial

Ben Yates@AED_East Appreciate @RepByrne coming by @BeardEquip to discuss #CTE #overtime #infrastructure and #snappe

Would you like to see your company featured in our next issue of CED Magazine? Simply tweet us @AEDSocial and we’ll pick our favorites each month and publish them! September 2016 | Construction Equipment Distribution | www.cedmag.com | 13

>> INDUSTRY NEWS Sarens Enlists Two Terex® Ac 700 Cranes For A Heavy Tandem Lift Recently, international steel construction company Iemants constructed an offshore oil module for Fabricom at the company’s Hoboken facility in Antwerp, Belgium. These massive modules, critical for the oil and gas production process, reach sizes up to 25 m high, 30 m wide and 40 m long and may weigh up to 2,200 tonnes. Even with a full complement of equipment at Iemants’ disposal, occasionally during module construction it is necessary to bring in heavy lifting specialists to safely pick up especially heavy pieces and place them onto the module platform. When the time came to lift and mount on top of the module a large spreader bar used to perform offshore lifting, Iemants worked with its lifting partner, the Sarens Group, to develop the most cost-effective and efficient lifting solution. The Right Cranes The spreader bar measured 13.5 m long, 5 m wide, and 6 m high and weighed 145 t. It had to be lifted from ground level to a placement height of 32 m, and the crane would have to work at a maximum 24-m radius during the lift. “We considered a number of options, from using a single crawler crane to performing a tandem lift using two all terrain cranes,” says Erik Van der Elst, key account manager for Sarens. The advantage of the single crane option would have been that it required only one crane and crew to be mobilized. However, a crawler crane would require multiple days and more than 20 loads to transport the crane components necessary to configure it to meet the 145-t lift capacity at a 24-m radius. “It would take at least 10 days to complete the entire project, from mobilization to completing the lift, with the single crane option,” says Van der Elst. This was too long and costly for the module lift project. Sarens’ project managers focused on a more efficient, dual crane option, using the 700-t capacity class Terex® AC 700 all terrain crane. To meet required lifting capacity and working radius, while minimizing loads to improve mobilization efficiency, planners went with a 20.5-m main boom option, using a 4-m variable adapter to connect the 30-m luffing fly jib to the telescopic boom. “In this configuration, each AC 700 crane offers 86.5 t capacity at the 24-m radius, ample capacity to safely lift the 145-t spreader bar,” says Michael Klein, product marketing manager for Terex and Demag All Terrain Cranes.

Even though this option required two cranes to be mobilized, it offered significant time and money savings. The nine-axle AC 700 all terrain crane is quickly driven to the jobsite with its complete 60-m main telescoping boom installed, while meeting 12-tonne-per-axle load limits to reduce the number of loads required for transport. Using the two cranes cut the number of loads by approximately half compared to mobilizing a crawler crane. “We calculated a week’s time savings by using the two Terex all terrain cranes, which represented significant labor and cost savings for our customer,” explains Van der Elst. This is critical for the construction of an oil module in a depressed oil price market. Sarens mobilized its first Terex AC 700 crane from its Wolvertem, Belgium, headquarters plus eight trailers of supporting material, jib segments and counterweight to make the 27-km trip to the Hoboken jobsite. The large but nimble Terex crane reaches highway speeds of 75 km/h to quickly get from the yard to the project, and, once on site, its 8-axle steering allows the crane to quickly maneuver into position for lifting. Within a day, Sarens’ four-person work crew transported the first all terrain crane to the jobsite, rigged it with 160 t of counterweight and the 30-m luffing fly jib, and had it ready for the lifting project. On day two, the crane went to work lifting and positioning supporting equipment

14 | www.cedmag.com | Construction Equipment Distribution | September 2016

in preparation for placement of the spreader bar. “The first crane on site placed the lifting supports, rigging for the platform and a radar mast,” mentions Van der Elst. “At the same time, we moved our second crane to the jobsite and had a different four-person crew prepare and position that AC 700 for the spreader bar lift.” By the morning of day three, both cranes were in position for completing the critical lift. To avoid the potential of weight overload on one of the cranes, Sarens’ lift plan included positioning a 160-t capacity swivel beam in between the spreader bar and the cranes’ hook blocks. To start the spreader bar lift, the two crane booms worked at a 22-m radius, and, as the lift progressed, the boom radius decreased to 17 m as the two cranes swiveled the load into position. While placing the spreader bar atop the module, both cranes were operating at a 24-m radius, and the two booms were less than a couple of meters apart. “The responsive controls of the AC 700 cranes give our operators very precise movements of the boom and load, which allows us to confidently complete intricate tandem lifts like this,” offers Van der Elst. In just three days, the dual crane option safely and efficiently placed the spreader bar plus supporting equipment onto the oil module, seven days faster than what was estimated for the single crane option. More importantly, going with a tandem approach saved Sarens’ customer money.

Question: My dealership sells equipment from overseas. What are the associated risks?

>> INDUSTRY NEWS

Response: Caterpillar One Of Woman Engineer Magazine’s Top 50 Employers In 2016 Many innovations and new equipment designs come from manufacturers overseas. While lenging the Caterpillar was recently ranked No. 7 on rotational program, the very positive interacit may Engineer presentmagazine’ an opportunity for a sale tions hereI in States,employees, there’s also of liastereotype Woman s “Top 50 Employhadthe hadUnited with Caterpillar the a risk bility if the equipment doesn’t meet U.S.reputation safety standards. Before taking possession: that women that Caterpillar has and the weight ers” in 2016. fill those brand holds.” selected companies where they • ReadersEnsure they’re insured: Confirmthat thatthethe manufacturer and the importercan’t (if there roles. ” Caterpillar’ s deliberate focus on attracting would most like to work and those they think is one) have product liability insurance of at least $1 million in the United States. Keep a “When I would provide a positive working environment copy of current policy limits on record. and retaining top women talent has taken many started my forms recently, including through the Women’s for women engineers. • Data stewardship Inspect the equipment: Check that all guards, labels and operating manucareer with Initiative Networkwarning employee resource group, consultant Cheryl Verbeke als held meet the guidelines sether by19the American National Standards Institute, Caterpillar, the Women in Leadership Initiative and thethe Occupationhas a variety of roles during years Breakthrough Leadership classgroup. for developing at including strategy, analytics, data or other alCaterpillar, Safety and Health Administration recognized safety Make sureI had all great labels opportunities mid-level women for more senior roles. governance and recruiting, among others. are printed in the language of those who’ll operate the equipment. to work and Many Caterpillar women engineers have of growing and developing our their • As partGive it a try: Test run the machinery to make sure it operates correctly and is in lead global team, Caterpillar has an Engineering Rotational also showed pride in their professions on social good condition. Make sure any safety guards, shut-offs, and other protective devices teams,”are saidin media by using “#ILookLikeAnEngineer.” Development Program where entry level engigoodcan order. EngineerCaterpillar’s Director director of Diversity neers experience different engineering roles

ing supervisor Priya Vaidyanathan, “such as diversity and Inclusion inclusion, Kelly Wojda, across the company. to partnering with my extended team in the said, “Caterpillar employs hundreds of female Andrea Osberghaus, an associate engineer in When it’s time to sell the equipment, here’s how you can further reduce your liability: United States to establish a Center of Excellence the program, said, “What ultimately swayed my engineers and women in many other technical • Have the customer confirm: Make a note on the sales contract that the operating manual and all guarding in India that provides IT infrastructure services jobs that have historically been associated with decision in Caterpillar’s favor were the comand labeling are there and are in good condition. Ask your customer to sign off on each one. globally.” men. #ILookLikeAnEngineer is about chalpetitive benefits for entry level engineers, the

• Provide a demonstration: Have the manufacturer or the distributor show the proper operation of the machinery—including all safety features. Record the demonstration so it can be used for future employee training. In Memoriam • Make sure it’s complete: If you’re selling a used machine, never allow it to be sold “as-is” if it’s missing any guarding, or the operating manual. Walterlabeling, Joachim Jr. Walter Fontaine Joachim Jr., 70, of

Remember, Springfield, Pa., insurance, went home to your be be able to show with the Lord on Sunday, July 10, exposure.

2016. He was born on September 28, 1945, in Upper Darby, Pa., to the late Walter Fontaine Joachim and Margaret Russell Joachim. He was a graduate of Upper Darby High School and Albright College. While at Albright he met and married the love of his life, Leslie Kepler Joachim, who preceded him in eternal life in 1993. He was a well-known icon in the heavy construction equipment industry in the Mid-Atlantic region, where he loved every day of his 45-year career. He was a respected and beloved top salesman, sales manager, boss, partner, mentor and friend. His integrity, humor and ability to relate to anyone laid the groundwork for his coworkers and customers becoming some of his closest friends. Up until this year, he was president and then vice chairman of Penn Jersey Machinery in Lionville, Pa.

if a foreign manufacturer fails to meet U.S. safety standards and has no liability dealership could be held liable if there’s an accident. By following these steps, you’ll CASE Construction Announces 2016your you did your part to ensure safetyEquipment standards were met before the sale, limiting

‘Diamond Dealer,’ ‘Gold Dealer’ Award Winners CASE Construction Equipment has released its list of 2016 “Diamond Dealer” and “Gold Dealer” award recipients as a part of its North American Construction Equipment Partnership Program. The awards recognize dealerships across the US and Canada for leadership in growing the CASE dealer network, as well as excellence in five categories: sales performance, marketing and communications, product support, parts support and training. The 2016 Diamond Dealer award winners are: ASCO (Texas), Birkey’s Construction Equipment (Ill.), J.R. Brisson Equipment (Ontario), Burris Equipment Company (Ill.), Groff Tractor & Equipment (Pa., Md. and N.J.), Hills Machinery (N.C., S.C.), Hitrac (Manitoba), Kucera Farm Supply (Ontario), McKeel Equipment (Ky.), Miller-Bradford & Risberg (Wis., Mi. and Ill.), Nueces Power Equipment (Texas), Redhead Equipment (Saskatchewan) and State Equipment (Ky., W.Va.). The 2016 Gold Dealer award winners are: Crawler Supply Company (La.), Diamond Equipment (Ill., Ind., Ky. and Tenn.), Eagle Power & Equipment (Pa., Del.), Hopf Equipment (Ind.),

Longus Equipment (Quebec), McCann Industries (Ill., Ind.), Medico Industries (Pa.), Monroe Tractor (N.Y.), OCT Equipment (Okla.), Potter Equipment (Ark., Mo.), RPM Machinery (Mich., Ind.), Scott Equipment (La., Ark.), Sequoia Equipment (Calif.), Townline Equipment (N.H., Vt.), Triebold Implement (Wis.) and Yukon Equipment (Alaska). “I would like to congratulate these exemplary dealers who have displayed true leadership and dedication in growing the CASE brand,” says Scott Harris, vice president for CASE Construction Equipment in North America. “These high-performing dealerships live up to the CASE brand promise throughout every aspect of their business: hiring the right people, delivering a differentiated level of service in market, and building enduring relationships with customers.” CASE’s Partnership Program is designed to increase dealer performance per the results of a dealer assessment while encouraging them to excel in their role as a “Professional Partner” with customers.

September 2016 | Construction Equipment Distribution | www.cedmag.com | 15

>> INDUSTRY NEWS KOBELCO USA Names Beard Equipment as Texas, New Mexico Dealer KOBELCO Construction Machinery USA continues to expand representation in the North American market by adding Beard Equipment to its growing dealer network. Beard Equipment will represent the full line of KOBELCO excavators in western Texas and southeastern New Mexico. “As a reputable excavator manufacturer, KOBELCO is known for top quality machinery,” says Jeff Beard, owner of Beard Equipment. “After looking at several different brands, our dealership determined KOBELCO was the best. We were immediately impressed by the innovative technologies and cutting-edge performance capabilities that KOBELCO excavators deliver on any job – no matter how tough. And they’re designed from the operator’s point of view, with added comfort features and spacious cabs. We look forward to providing our customers the value of industry-leading KOBELCO excavators.” KOBELCO has long been recognized for its world class line of excavators. In order to

continuously improve its singular product line, the team of KOBELCO engineers and field experts dedicate substantial time and effort to research and development of today’s leading technologies and machinery. KOBELCO ensures the delivery of excavators that can withstand the day-to-day rigors of demanding jobsites, while providing operators with all the production and comfort features

required for a profitable day’s work. The staff of Beard Equipment will be working closely with KOBELCO to gain the required sales and product support training to deliver on the KOBELCO promise of customer satisfaction. Beard Equipment will provide professional sales and service support on all KOBELCO excavators from their location in Midland, Texas. Beard Equipment is a specialized heavy equipment dealership with 10 years of experience serving the construction industry. They focus on the sales, rental, maintenance, service and after-sale support for the full line of KOBELCO excavators. For more information on Beard Equipment or KOBELCO excavators currently in stock, please call 432-6944530 or visit www.BeardEquipCo.com.

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16 | www.cedmag.com | Construction Equipment Distribution | September 2016

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>> PRODUCT PREVIEW Komatsu America Corp. Introduces New D85exi/Pxi-18 Crawler Dozer Start sooner and finish faster, courtesy of factory integration and a host of intelligent capabilities Komatsu America Corp., a leading global heavy equipment manufacturer, today introduced the new 264HP D85EXi/PXi18 crawler dozer, the smart choice for any machine owner looking for intelligence and efficiency beyond what is typically available in machine control systems. Eliminating the need to install and remove blade-mounted sensors each day not only saves on machine and operator wear and tear, it converts potential downtime into more time spent running the machine. “With the monthly production gains from starting sooner, finishing faster and using less fuel, the more owners of the D85EXi/ PXi-18 run their machines, the more they save,” said Sebastian Witkowski, Komatsu product marketing manager. “From heavy dozing to finish grading, this wide-blade dozer is perfect for large earthmoving jobs, where accuracy and efficiency are important,” Witkowski said. First-to-last pass, rough-to-finish automatic dozing extends production gains. Once engaged, the system automatically cuts and lowers the blade to grade in a typical

dozing pass. If the load increases to a maximum, the blade automatically raises to minimize track slip to keep dozing productively. This intelligence achieves up to 8 percent greater efficiency in moving material, based on start-to-finish grade testing against typical aftermarket machine control systems. The D85EXi/PXi-18, whether rented,

leased or purchased, is covered by the Komatsu CARE® program for the first three years or 2000 hours, whichever comes first. Komatsu CARE® includes scheduled factory maintenance, a 50-point inspection at each service and two complimentary Komatsu Diesel Particulate Filter exchanges and DEF tank flushes in the first five years.

Liugong North America Introduces New Dressta S-Series Dozers To North America LiuGong North America, a wholly owned subsidiary of LiuGong Machinery based in Liuzhou, China, introduced the new Dressta TD-8S and TD-9S dozers to North American construction equipment dealers at a recent event in Houston. Dressta is headquartered in Stalowa Wola, Poland, and is the sales, marketing and after-sales and service division of LiuGong Dressta Machinery Sp. Z o.o. The dealers converged in Houston for an in-depth look at LiuGong and Dressta operations and, of course, the opportunity to see the dozers in action. Guangxi LiuGong and LiuGong N.A. executives provided a company overview and corporate perspective while Dressta’s director of marketing and dealer development and technical product manager showcased the equipment’s features and benefits. The TD-8S and TD-9S, launched in Europe at Bauma Munich in April, are powered by 18 | www.cedmag.com | Construction Equipment Distribution | September 2016

environmentally friendly QSF 3.8 tier 4 final turbocharged Cummins engines, meeting U.S. EPA emission regulations and delivering 94 hp (70kW) and 113 hp (84kW), respectively. They are equipped with Rexroth dual path hydrostatic drive systems that transmit full power to both tracks in all conditions to ensure smooth speed changes, pivot turns and counter-rotation. The machines feature a strong six-way C-frame complemented by a robust undercarriage that is available in two options – the standard LT (long-track) version for better stability during driving and leveling and the LGP (low ground pressure) version for use in swampy or muddy terrain. The S-Series dozers are available with integrated technology options of Trimble Basic, Trimble Ready and full Trimble 3D control systems. For more information about the TD-8S and TD-9S please visit www.dressta.com or contact your nearest Dressta dealer.

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>> REGIONAL REPORT

MICHAEL DEXTER

2016 Ottawa Briefing: A Day on Parliament Hill for Industry Leaders The 2016 AED Ottawa Briefing will take place on October 27 at the historic Fairmont Chateau Laurier hotel just a few steps away from Parliament Hill.

AED’s annual Ottawa Briefing has become a top event for Canadian equipment industry leaders wanting to learn more about how government programs affect equipment demand and dealer costs of doing business. The meeting is also an opportunity to build relationships with government officials and influence federal policy. The 2016 Ottawa Briefing will take place on October 27 at the historic Fairmont Chateau Laurier hotel located just a few steps away from Parliament Hill. The focus of this year’s meeting is engagement with government. Quite a bit has changed in Ottawa since AED’s 2105 Briefing, and there are many new MPs to meet. The Liberals’ decisive election win last year, which propelled Justin Trudeau into the premiership, radically altered the complexion of the House of Commons. The 43rd Parliament of Canada contains over 200 new faces, including a record number of aboriginal (10) and female (88) MPs. Election 2015 unseated a number of high-profile MPs, including finance minister Joe Oliver, immigration minister Chris Alexander (who spoke at the 2014 AED Ottawa Briefing), environment minister Leona Aglukkaq and Toronto-area MP Julian Fantino, as well as well-respected NDP critics Megan Leslie, Paul Dewar and Andrew Cash.

The new parliament features 200 rookie MPs. All that change creates an important opportunity for AED members to start building relationships with lawmakers early in their careers. It also means there are a lot of people who don’t know our industry and don’t understand how policy decisions affect your company’s employees and bottom line. That makes your presence in Ottawa in October even more important. This year’s meeting starts with an intro briefing at the hotel by AED staff as well as experts from Blue Sky Strategies, AED’s Canadian public policy consultants. Dealers will then head to Parliament Hill for meetings with senior government officials to talk about transportation, infrastructure, tax, and workforce policy. The day includes lunch in the Parliamentary Dining Room and a Parliament tour. The AED group will also sit in on a “question period” to get a firsthand look at the workings of government. The day will finish off with a reception with members of the 43rd Parliament and leaders of the Ottawa policy community at Mill Street Brew Pub. The one-day conference will be an excellent opportunity to learn, engage and network. We hope you’ll join us. For more information, please contact Mike Dexter, AED senior regional manager, at mdexter@aednet.org or 630-465-2888.

MICHAEL DEXTER is AED’s Senior Director of Canadian Engagement. He can be reached at mdexter@aednet.org and 630-465-2888. 20 | www.cedmag.com | Construction Equipment Distribution | September 2016

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>> WASHINGTON INSIDER

CHRISTIAN KLEIN

Questioning the Cuba Embargo AED’s historic trip to Cuba in May gave industry leaders a chance to assess conditions firsthand. One takeaway was that construction opportunities are virtually limitless.

In recent years the Obama administration has pushed aggressively to normalize relations with Cuba. In 2009, the president eased restrictions on Americans traveling to the island, and he’s continued to make it easier for U.S. citizens to visit. Diplomatic ties were restored in 2015, commercial flights were allowed this past February, and in March President Obama traveled to Cuba himself. But despite the administration’s efforts, the president can’t unilaterally lift the embargo or legalize tourist travel. Among the many laws Congress has enacted to restrict trade with Cuba, one of the most important is the Cuban Liberty and Democratic Solidarity (Libertad) Act, more commonly known as “Helms-Burton.” The law contains a host of provisions designed to isolate Cuba from the international community and strictly limits U.S.-Cuban economic relations. Under the law, many restrictions must remain in place until the U.S. president can certify that a transitional government has taken power. Among the factors the president must consider in making the transitional government determination are whether Cuba has legalized all political activity, released political prisoners, allowed prison inspections by human rights groups, committed to holding free and fair elections, made progress toward an independent judiciary, and allowed trade unions. The law also requires that the government “not include Fidel Castro or Raul Castro.” Obviously those things haven’t happened and likely won’t anytime soon (although Raul Castro has said he will leave office in 2018). So, although President Obama may want to end the embargo, facts on the ground in Havana prevent him from doing so. For the trade sanctions to end, Congress must enact new legislation. As anyone who follows the legislative process knows, it’s much harder to pass a bill than it is to stop it. Although opposition to the embargo on Capitol Hill is growing, a few die-hard supporters of current U.S. policy can block action. They argue that it keeps pressure on the Castro government to improve human rights, that Cuba hasn’t made sufficient progress toward democracy to justify lifting sanctions, and that since Cuba’s private sector is small, the Cuban government would be the greatest beneficiary of a change in U.S. policy.

Those pushing to lift the embargo say it’s an anachronistic relic of the Cold War, which, after 50 years, hasn’t achieved its goals. They argue that Cuba poses no threat to the United States, that the embargo is causing misery for the Cuban people, that it allows the Cuban government to blame the U.S. for Cuba’s slow economy, and that U.S. policy is inconsistent since Americans can freely travel to, and do business with, other nondemocratic countries with questionable human rights records (China, for example). Another argument against the embargo is the impact on the U.S. economy. Many of our allies are actively trading with Cuba while U.S. companies are missing out on opportunities just 90 miles off our coast. A company from Singapore is helping to develop the new mega port at Mariel that will be capable of supporting the larger post-Panamax ships. According to media reports, companies from Mexico, Belgium and Spain are also involved. But American companies are generally prevented from participating in the project and related infrastructure development. The U.S. Chamber of Commerce has said the embargo costs the United States $1.2 billion annually in lost sales of exports. The Cuba Policy Foundation put the number higher, estimating as much as $4.84 billion annually in forgone agricultural exports and related activity. (An excellent comparison of the arguments on both sides of the Cuba debate is available at cuba-embargo.procon.org.) AED’s historic trip to Cuba in May gave industry leaders a chance to assess conditions firsthand. One takeaway was that construction opportunities are virtually limitless. Buildings need to be rehabilitated. Cuba’s transportation and utility infrastructure needs to be repaired and dramatically expanded. Although U.S. companies can send construction equipment to Cuba under limited circumstances, the island won’t truly be open for business for U.S. distributors until Congress gives the go-ahead. A recent Pew survey found that 72 percent of Americans – and 59 percent of Republicans – now favor lifting the embargo. It’s time for Congress to reexamine the issue as well and consider whether the negative impact on Americans and Cubans alike is justified.

CHRISTIAN KLEIN is AED’s vice president of Government Affairs. He can be reached at caklein@aednet.org and 703-739-9513. Note: This article is for informational purposes only and does not constitute legal advice. 22 | www.cedmag.com | Construction Equipment Distribution | September 2016

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Taking the Top Off the Ticket

AED’s Exclusive Analysis of How Your Representatives and Senators Voted on Issues that Matter to Distributor Businesses By Christian A. Klein, Daniel B. Fisher and Brett Levanto AED Government Affairs Team

he 2016 presidential election campaign has been full of surprises. Between the unforeseen rise of Republican presidential candidate Donald Trump and the expected, but tortuous and controversial, road to the Democratic nomination taken by Hillary Clinton, few could have predicted the events of this political cycle. In the countless column inches, web posts and social media updates committed already to the wildness on top of the ticket, it can be easy to overlook the many congressional races vying for attention. With the entire House of Representatives and 34 Senate seats up for election on Nov. 8, conscientious voters must see through the noise radiating from the presidential candidates and invest in their current and prospective members of Congress. For the equipment distribution industry, this is an important challenge. AED members must make their vote selections not only as citizens performing a civic duty, but as the owners, executives and employees of small and medium-sized businesses. Your ballot should not only represent what is best for your family, but also reflect what’s at stake for your company, your industry, and the economic future of our nation. This article is designed to help you answer one important question: when my economic prosperity and my employees’ futures were at stake, how did my elected representatives act? AED carefully selected the most important House and Senate votes for our industry and produced the following report card.

Making an Informed Decision

AED’s key votes (and all the association’s policy priorities) focus on proposals that lower equipment distributors’ cost of doing business, expand equipment markets and restore certainty and growth to the broader economy. Consequently, AED supported efforts to invest in our nation’s infrastructure, expand business markets, protect earnings and incentivize capital investment. The voting charts in this report card provide an objective measure of how lawmakers voted on issues important to the equipment industry. These issues represent only a portion of each lawmaker’s record for this Congress; the House and Senate combined to vote on hundreds of measures over the past two years. While the votes listed in this piece are important, there are of course other factors you should consider when casting your ballot in the upcoming election, such as a candidate’s character, professional qualifications or positions on other issues that matter to you personally. AED’s analysis should neither be read as an endorsement of any candidate nor as a statement of opposition to a lawmaker’s reelection. As you analyze this information, it is important to remember that legislation is rarely simple and almost never straightforward. While a bill may contain important provisions for the equipment industry, unrelated issues may cause a member to vote no. Finally, remember that not all members served for the entirety of the 114th Congress. In these circumstances, their vote totals may be skewed because they cast fewer votes than their colleagues. This chart provides a quick reference to allow you to see where your elected officials stood on issues that affect your markets and cost of doing business. When you encounter candidates on the campaign trail, use this information as a starting point for a conversation with incumbents about why they voted as they did and to inquire of challengers how they would have voted had they been in office. When you reach the ballot box or step into the voting booth, remember how they’ve represented your interests. 24 | www.cedmag.com | Construction Equipment Distribution | September 2016

AED Legislative Scorecard: 114th Congress 1.

Joint Resolution Disapproving of the NLRB Ambush Election Rule (S.J. Res. 8)

Surface Transportation Reauthorization & Reform Act (H.R. 22)

Export-Import Bank Reform and Reauthorization Act of 2015 (H.R. 597)

FAST Act (H.R. 22)

Keystone XL Pipeline Approval Act (S. 1)

Consolidated Appropriations Act of 2016 (H.R. 2029)

PATH Act (H.R. 2029)

Trade Preferences Extension Act of 2015 (H.R. 1295)

Joint Resolution Disapproving of the Rule Redefining “Waters of the United States” (S.J. Res. 22)

10.

Death Tax Repeal Act (H.R. 1105)

11.

“Devolution” Amendment Proposed by Rep. DeSantis (R-Fla) to the FAST Act (H. Amdt. 802)

1. Joint Resolution Disapproving the NLRB Ambush Election Rule (S.J. Res. 8) House Vote: 114-1-128, March 19, 2015 Senate Vote: 114-1-67, March 4, 2015 AED Position: Yes On Dec. 15, 2014, the National Labor Relations Board (NLRB) finalized the “ambush election rule,” which makes it

U.S. House Voting Record Representative

Score

Rep. Young, Don (R-AK)

91%

Rep. Aderholt, Robert (R-AL)

100%

Rep. Brooks, Mo (R-AL)

55%

Rep. Byrne, Bradley (R-AL)

82%

Rep. Palmer, Gary (R-AL)

45%

Rep. Roby, Martha (R-AL)

82%

September 2016 | Construction Equipment Distribution | www.cedmag.com | 25

easier for labor unions to organize. One of many efforts during the Obama administration’s tenure to significantly alter labor law through rulemaking and executive action (and circumventing Congress), the new rule significantly reduces the period between the filing of a petition and a union election, denying employers an adequate opportunity to educate their workers on the impact of unionization prior to employee voting. The NLRB’s actions also infringe on the privacy rights of workers and their families by mandating that employers provide, within two business days of the election agreement or decision directing an election, employee personal telephone numbers and personal email addresses.

The U.S. House of Representatives, 114th Congress. Representative

Score

Rep. Rogers, Mike (R-AL)

91%

Rep. Sewell, Terri (D-AL)

73%

Rep. Crawford, Rick (R-AR)

73%

Rep. Hill, French (R-AR)

82%

Rep. Westerman, Bruce (R-AR)

73%

Rep. Womack, Steve (R-AR)

91%

Rep. Franks, Trent (R-AZ)

45%

Rep. Gallego, Ruben (D-AZ)

45%

Rep. Gosar, Paul (R-AZ)

33%

Rep. Grijalva, Raul (D-AZ)

36%

Rep. Kirkpatrick, Ann (D-AZ)

64%

Rep. McSally, Martha (R-AZ)

100%

Rep. Salmon, Matt (R-AZ)

55%

Rep. Schweikert, David (R-AZ)

45%

Rep. Sinema, Kyrsten (D-AZ)

73%

Rep. Aguilar, Pete (D-CA)

60%

Rep. Bass, Karen (D-CA)

55%

Rep. Becerra, Xavier (D-CA)

36%

Rep. Bera, Ami (D-CA)

64%

Rep. Brownley, Julia (D-CA)

64%

Rep. Calvert, Ken (R-CA)

100%

Rep. Capps, Lois (D-CA)

55%

Rep. Cardenas, Tony (D-CA)

55%

Rep. Chu, Judy (D-CA)

55%

Rep. Cook, Paul (R-CA)

91%

Rep. Costa, Jim (D-CA)

91%

Rep. Davis, Susan (D-CA)

55%

Rep. Denham, Jeff (R-CA)

100%

Rep. DeSaulnier, Mark (D-CA)

55%

26 | www.cedmag.com | Construction Equipment Distribution | September 2016

In an attempt to nullify the ambush election rule, the House (232 – 186) and Senate adopted Congressional Review Act (CRA) resolutions disapproving and effectively halting the rules. Unfortunately, the resolution was vetoed by President Obama and the effort’s supporters didn’t have a twothirds majority in both the House and Senate to override the veto. The vote is a clear indication of where lawmakers in the 114th Congress stood on one of AED’s top labor policy priorities.

2. Surface Transportation Reauthorization & Reform Act (H.R. 22) House Vote: 114-1-624, Nov. 5, 2015 (as “STRR Act”) Senate Vote: 114-1-260, July 30, 2015 (as “DRIVE Act”) AED Position: Yes Following consideration of more than 100 amendments, the House approved its version of a highway reauthorization bill: the Surface Transportation Reauthorization & Reform (STRR) Act, 363 to 64. The legislation provided $325 billion for roads, bridges and transit infrastructure. However, under the bill, the duration of the authorization – six years or three – would depend on Congress’ ability to come up with a way to pay for the final three years. Similar to the Senate-passed DRIVE

Act (see discussion in Senate vote #2), which provided three years of guaranteed investment in a six-year authorization, the STRR Act was essentially a threeyear proposal. The STRR Act’s passage resulted in the appointment of a House–Senate conference committee to determine the investment blueprint’s exact duration and funding levels.

3. Export-Import Bank Reform and Reauthorization Act of 2015 (H.R. 597)

Representative

Score

Rep. Eshoo, Anna (D-CA)

60%

Rep. Farr, Sam (D-CA)

55%

Rep. Garamendi, John (D-CA)

80%

Rep. Hahn, Janice (D-CA)

60%

Rep. Honda, Michael (D-CA)

55%

Rep. Huffman, Jared (D-CA)

55%

Rep. Hunter, Duncan (R-CA)

82%

Rep. Issa, Darrell (R-CA)

82%

Rep. Knight, Steve (R-CA)

90%

Rep. LaMalfa, Doug (R-CA)

64%

Rep. Lee, Barbara (D-CA)

60%

House Vote: 114-1-576, Oct. 27, 2015 Senate Vote: 114-1-256, July 27, 2015 (As “Kirk Amendment to FAST Act”) AED Position: Yes

Rep. Lieu, Ted (D-CA)

50%

Rep. Lofgren, Zoe (D-CA)

45%

Rep. Lowenthal, Alan (D-CA)

55%

Rep. Matsui, Doris (D-CA)

60%

The Export-Import (Ex-Im) Bank is an independent, self-sustaining federal agency providing financing tools to international buyers of U.S. exports. The Ex-Im Bank has been an important resource for both manufacturers and U.S. dealers sending equipment abroad. During the 114th Congress, the Ex-Im Bank became a target of the Freedom Caucus and tea-party-aligned lawmakers who cited the Bank as evidence of corporate welfare and big government. On June 30, 2015, despite broad bipartisan and business community backing, the Ex-Im Bank’s charter expired, preventing the entity from guaranteeing any new loans.

Rep. McCarthy, Kevin (R-CA)

82%

Rep. McClintock, Tom (R-CA)

50%

Rep. McNerney, Jerry (D-CA)

64%

Rep. Napolitano, Grace (D-CA)

50%

Rep. Nunes, Devin (R-CA)

100%

Rep. Pelosi, Nancy (D-CA)

55%

Rep. Peters, Scott (D-CA)

64%

Rep. Rohrabacher, Dana (R-CA)

55%

Rep. Roybal-Allard, Lucille (D-CA)

55%

Rep. Royce, Ed (R-CA)

82%

Rep. Ruiz, Raul (D-CA)

78%

Rep. Sanchez, Loretta (D-CA)

56%

Rep. Sanchez, Linda (D-CA)

55%

Rep. Schiff, Adam (D-CA)

55%

Rep. Sherman, Brad (D-CA)

64%

In the House, standalone legislation (Export-Import Bank Reform and Reauthorization Act of 2015 (H.R. 597)) to reauthorize the bank’s charter passed, 313 – 118. However, the Senate didn’t take up the legislation. Efforts to revive the Ex-Im Bank eventually bore fruit when a provision to renew and reauthorize it through 2019 was attached to the new surface transportation law, the FAST Act (see discussion at House vote #4).

Rep. Speier, Jackie (D-CA)

55%

Rep. Swalwell, Eric (D-CA)

64%

Rep. Takano, Mark (D-CA)

45%

Rep. Thompson, Mike (D-CA)

55%

Rep. Torres, Norma (D-CA)

55%

Rep. Valadao, David (R-CA)

100%

Rep. Vargas, Juan (D-CA)

55%

Rep. Walters, Mimi (R-CA)

100%

Rep. Waters, Maxine (D-CA)

45%

Rep. Buck, Ken (R-CO)

45%

Rep. Coffman, Mike (R-CO)

64%

Rep. DeGette, Diana (D-CO)

55%

Rep. Lamborn, Doug (R-CO)

55%

Rep. Perlmutter, Ed (D-CO)

55%

Rep. Polis, Jared (D-CO)

45%

Rep. Tipton, Scott (R-CO)

50%

Rep. Courtney, Joe (D-CT)

64%

Rep. DeLauro, Rosa (D-CT)

64%

Rep. Esty, Elizabeth (D-CT)

64%

Rep. Himes, Jim (D-CT)

55%

Rep. Larson, John (D-CT)

64%

4. FAST Act (H.R. 22) House Vote: 114-1-673, Dec. 3, 2015 Senate Vote: 114-1-331, Dec. 3, 2015 AED Position: Yes Following conference committee negotiations to reconcile differences between the House (STRR Act) and the Senate (DRIVE Act) surface transportation reauthorization proposals,

September 2016 | Construction Equipment Distribution | www.cedmag.com | 27

Representative

Score

Rep. Carney, John (D-DE)

36%

Rep. Bilirakis, Gus (R-FL)

82%

Rep. Brown, Corrine (D-FL)

55%

Rep. Buchanan, Vern (R-FL)

91%

Rep. Castor, Kathy (D-FL)

55%

Rep. Clawson, Curt (R-FL)

45%

Rep. Crenshaw, Ander (R-FL)

100%

Rep. Curbelo, Carlos (R-FL)

100%

Rep. DeSantis, Ron (R-FL)

55%

Rep. Deutch, Ted (D-FL)

60%

Rep. Diaz-Balart, Mario (R-FL)

91%

Rep. Frankel, Lois (D-FL)

60%

Rep. Graham, Gwen (D-FL)

82%

Rep. Grayson, Alan (D-FL)

50%

Rep. Hastings, Alcee (D-FL)

55%

Rep. Jolly, David (R-FL)

82%

Rep. Mica, John (R-FL)

91%

Rep. Miller, Jeff (R-FL)

55%

Rep. Murphy, Patrick (D-FL)

73%

Rep. Nugent, Rich (R-FL)

64%

Rep. Posey, Bill (R-FL)

45%

Rep. Rooney, Tom (R-FL)

82%

Rep. Ros-Lehtinen, Ileana (R-FL)

91%

Rep. Ross, Dennis (R-FL)

73%

Rep. Wasserman Schultz, Debbie (D-FL)

55%

Rep. Webster, Daniel (R-FL)

73%

Rep. Wilson, Frederica (D-FL)

55%

Rep. Yoho, Ted (R-FL)

45%

Rep. Allen, Rick (R-GA)

82%

Rep. Bishop, Sanford (D-GA)

90%

Rep. Carter, Earl (R-GA)

82%

Rep. Collins, Doug (R-GA)

73%

Rep. Graves, Tom (R-GA)

73%

Rep. Hice, Jody (R-GA)

45%

Rep. Johnson, Hank (D-GA)

45%

Rep. Lewis, John (D-GA)

55%

Rep. Loudermilk, Barry (R-GA)

73%

Rep. Price, Tom (R-GA)

73%

Rep. Scott, David (D-GA)

80%

Rep. Scott, Austin (R-GA)

70%

Rep. Westmoreland, Lynn (R-GA)

80%

Rep. Woodall, Rob (R-GA)

91%

Rep. Gabbard, Tulsi (D-HI)

64%

Rep. Takai, Mark (D-HI)

43%

Rep. Blum, Rod (R-IA)

73%

Rep. King, Steve (R-IA)

64%

Rep. Loebsack, Dave (D-IA)

73%

Rep. Young, David (R-IA)

73%

Rep. Labrador, Raul (R-ID)

40%

Rep. Simpson, Mike (R-ID)

100%

Rep. Bost, Mike (R-IL)

100%

28 | www.cedmag.com | Construction Equipment Distribution | September 2016

conferees agreed to the Fixing America’s Surface Transportation (FAST) Act, an AED-supported five-year transportation authorization bill. On Dec. 3, 2015, the House overwhelmingly passed the FAST Act, 359 – 65. AED projects the $305 billion bill (which authorized $207.4 billion for the core federal aid highway program) will generate more than $13 billion in equipment market activity (sales, rental and product support) nationwide through 2020 and support more than 4,000 dealership jobs each year. The FAST Act also included other reforms important to the construction equipment industry, including a provision to renew and reauthorize the Export-Import Bank through 2019 (see discussion at House/Senate vote #3), removal of a limitation prohibiting tax-exempt financing tools from being used for projects funded under the Water Infrastructure Finance & Innovation Act (WIFIA), and reforms to the Federal Motor Carrier Safety Administration’s process for seeking exemptions from burdensome hours of service regulations. The FAST Act also allowed more commercial motor vehicle drivers to take advantage of a shorter “restart” period (24 hours as opposed to 34 hours) by increasing the air mile radius for transporting construction material and equipment from 50 miles to 75 miles.

5. Keystone XL Pipeline Approval Act (S. 1) House Vote: 114-1-75, Feb. 11, 2015 Senate Vote: 114-1-49, Jan. 29, 2015 AED Position: Yes In recent years, AED established itself as the construction industry’s leader on energy issues, including the Keystone XL pipeline project. While the pipeline’s construction was expected to create thousands of jobs and generate significant economic activity, the Obama administration delayed approval (and eventually rejected it) because of perceived environmental concerns. The Keystone XL Pipeline Approval Act (S. 1) would have superseded presidential authority to issue the Keystone XL pipeline’s permit. It passed the House with bipartisan support (270 – 152) and the Senate, but the bill was vetoed by President Obama and the effort’s supporters didn’t have a two-thirds

Representative

Score

Rep. Bustos, Cheri (D-IL)

73%

Rep. Davis, Rodney (R-IL)

100%

Rep. Davis, Danny (D-IL)

55%

Rep. Dold, Robert (R-IL)

100%

Rep. Duckworth, Tammy (D-IL)

70%

Rep. Foster, Bill (D-IL)

55%

House Vote: 114-1-705, Dec. 18, 2015 Senate Vote: 114-1-339, Dec. 18, 2015 (Combined vote with PATH Act) AED Position: Yes

Rep. Gutierrez, Luis (D-IL)

45%

Rep. Hultgren, Randy (R-IL)

73%

Rep. Kelly, Robin (D-IL)

55%

Rep. Kinzinger, Adam (R-IL)

100%

Government funding battles headlined President Obama’s White House tenure, and the 114th Congress was no exception. With the appropriations process broken, Congress needed to pass legislation funding the federal government before leaving for 2015. The so-called “omnibus” appropriations bill, a $1.1 trillion spending bill to keep the government open through Sept. 30, 2016, was the bookend to one of the most productive congressional months in recent memory (FAST Act, PATH Act, and omnibus all passed in just over two weeks).

Rep. LaHood, Darin (R-IL)

86%

Rep. Lipinski, Daniel (D-IL)

64%

Rep. Quigley, Mike (D-IL)

64%

Rep. Roskam, Peter (R-IL)

67%

Rep. Rush, Bobby (D-IL)

44%

Rep. Schakowsky, Jan (D-IL)

55%

Rep. Shimkus, John (R-IL)

100%

Rep. Brooks, Susan (R-IN)

100%

Rep. Bucshon, Larry (R-IN)

100%

Rep. Carson, Andre (D-IN)

55%

Rep. Messer, Luke (R-IN)

82%

Rep. Rokita, Todd (R-IN)

82%

Rep. Stutzman, Marlin (R-IN)

55%

Rep. Visclosky, Peter (D-IN)

55%

Rep. Walorski, Jackie (R-IN)

91%

Rep. Young, Todd (R-IN)

70%

Rep. Huelskamp, Tim (R-KS)

45%

Rep. Jenkins, Lynn (R-KS)

73%

Rep. Pompeo, Mike (R-KS)

45%

Rep. Yoder, Kevin (R-KS)

82%

Rep. Barr, Andy (R-KY)

91%

Rep. Guthrie, Brett (R-KY)

91%

Rep. Massie, Thomas (R-KY)

55%

Rep. Rogers, Harold (R-KY)

100%

Rep. Whitfield, Edward (R-KY)

89%

Rep. Yarmuth, John (D-KY)

55%

Rep. Abraham, Ralph (R-LA)

73%

Rep. Boustany, Charles (R-LA)

100%

Rep. Fleming, John (R-LA)

45%

Rep. Graves, Garret (R-LA)

91%

Rep. Richmond, Cedric (D-LA)

70%

Rep. Scalise, Steve (R-LA)

82%

Rep. Capuano, Michael (D-MA)

64%

Rep. Clark, Katherine (D-MA)

64%

Rep. Keating, William (D-MA)

64%

Rep. Kennedy, Joseph (D-MA)

63%

Rep. Lynch, Stephen (D-MA)

55%

Rep. McGovern, Jim (D-MA)

70%

Rep. Moulton, Seth (D-MA)

64%

Rep. Neal, Richard (D-MA)

70%

Rep. Tsongas, Niki (D-MA)

55%

majority in both the House and Senate to override it.

6. Consolidated Appropriations Act of 2016 (H.R. 2029)

Importantly, the bill also included two AED policy priorities: Lifting of the crude oil export ban and delay of the Obamacare “Cadillac” tax on some health insurance plans until 2020. The omnibus passed the House, 316 – 113, and was combined with the PATH Act before receiving Senate approval.

7. PATH Act (H.R. 2029) House Vote: 114-1-703, Dec. 17, 2015 Senate Vote: 114-1-339, Dec. 18, 2015 (Combined vote with Consolidated Appropriations Act) AED Position: Yes Despite promising to complete work to reinstate expired business tax provisions early in 2015, lawmakers once again waited until the end of the year to consider a tax extenders package. However, it was worth the wait as Congress approved the Protecting Americans from Tax Hikes (PATH) Act, which temporarily reinstated bonus depreciation and permanently increased and indexed Sec. 179 expensing levels. Reinstating and extending these capital investment incentives was a huge victory for AED and once again established the association as the construction industry’s

September 2016 | Construction Equipment Distribution | www.cedmag.com | 29

Representative

Score

Rep. Cummings, Elijah (D-MD)

55%

Rep. Delaney, John (D-MD)

55%

Rep. Edwards, Donna (D-MD)

55%

Rep. Harris, Andy (R-MD)

45%

Rep. Hoyer, Steny (D-MD)

60%

Rep. Ruppersberger, C.A. Dutch (D-MD)

70%

Rep. Sarbanes, John (D-MD)

55%

Rep. Van Hollen, Chris (D-MD)

55%

Rep. Pingree, Chellie (D-ME)

64%

Rep. Poliquin, Bruce (R-ME)

91%

Rep. Amash, Justin (R-MI)

27%

Rep. Benishek, Dan (R-MI)

100%

Rep. Bishop, Mike (R-MI)

91%

Rep. Conyers, John (D-MI)

60%

Rep. Dingell, Debbie (D-MI)

60%

Rep. Huizenga, Bill (R-MI)

64%

Rep. Kildee, Dan (D-MI)

56%

Rep. Lawrence, Brenda (D-MI)

55%

Rep. Levin, Sander (D-MI)

55%

Rep. Miller, Candice (R-MI)

91%

Rep. Moolenaar, John (R-MI)

91%

Rep. Trott, Dave (R-MI)

100%

Rep. Upton, Fred (R-MI)

100%

Rep. Walberg, Tim (R-MI)

82%

Rep. Ellison, Keith (D-MN)

45%

Rep. Emmer, Tom (R-MN)

82%

Rep. Kline, John (R-MN)

100%

Rep. McCollum, Betty (D-MN)

55%

Rep. Nolan, Rick (D-MN)

73%

Rep. Paulsen, Erik (R-MN)

100%

Rep. Peterson, Collin (D-MN)

91%

Rep. Walz, Tim (D-MN)

82%

Rep. Clay, William Lacy (D-MO)

55%

Rep. Cleaver, Emanuel (D-MO)

64%

Rep. Graves, Sam (R-MO)

100%

Rep. Hartzler, Vicky (R-MO)

91%

Rep. Long, Billy (R-MO)

73%

Rep. Luetkemeyer, Blaine (R-MO)

91%

Rep. Smith, Jason (R-MO)

73%

Rep. Wagner, Ann (R-MO)

91%

Rep. Harper, Gregg (R-MS)

100%

Rep. Kelly, Trent (R-MS)

86%

Rep. Palazzo, Steven (R-MS)

80%

Rep. Thompson, Bennie (D-MS)

36%

Rep. Zinke, Ryan (R-MT)

91%

Rep. Adams, Alma (D-NC)

55%

Rep. Butterfield, G.K. (D-NC)

55%

Rep. Ellmers, Renee (R-NC)

100%

Rep. Foxx, Virginia (R-NC)

73%

Rep. Holding, George (R-NC)

55%

Rep. Hudson, Richard (R-NC)

45%

30 | www.cedmag.com | Construction Equipment Distribution | September 2016

leading voice on tax issues. The House approved the PATH Act 318 – 109.

8. Trade Preferences Extension Act of 2015 (H.R. 1295) House Vote: 114-1-388, June 25, 2015 Senate Vote: 114-1-178, May 14, 2015 AED Position: Yes The Obama administration made the Trans-Pacific Partnership (TPP) the cornerstone of their second term’s economic agenda. However, in summer 2015, it looked like the president’s trade agenda would be halted by members from the far wing of his own party. Nonetheless, President Obama and the broader business community scored a major victory as the Trade Promotion Authority (TPA) and Trade Adjustment Assistance (TAA), related to the TransPacific Partnership, passed the House, 286 – 138. TPA, also known as “fast tracking,” is a legislative procedure through which Congress defines U.S. negotiating objectives and spells out a detailed oversight and consultation process for trade negotiations. TPA has been granted numerous times since the early 1970s. Under TPA, Congress retains the authority to review and decide whether any proposed U.S. trade agreement will be implemented. However, it may not amend trade deals negotiated under fast track legislation; rather, Congress will approve or reject them on simple up-ordown votes. TAA is a workers’ assistance program for Americans negatively impacted by increased foreign trade. The Trade Preferences Extension Act of 2015 (H.R. 1295) permitted the Obama administration to continue negotiating the TPP, the biggest trade deal in history. The 12-nation accord would account for 40 percent of the world’s GDP and primarily includes Pacific Rim countries.

9. Joint Resolution Disapproving of the Rule Redefining “Waters of the United States” (S.J. Res. 22) House Vote: 114-2-45, Jan. 13, 2016 Senate Vote: 114-1-297, Nov. 4, 2015 AED Position: Yes In what has become the epitome of the Obama administration’s out-of-control regulatory agenda, on May 27, 2015, the Environmental Protection Agency (EPA) and the Army Corps of Engineers issued their final “waters of the United States” rule, significantly expanding federal jurisdiction under the Clean Water Act (CWA). The new rule gives the EPA expansive new powers to regulate development, farming, mining and other activity in large swaths of the country. While the regulation has been challenged in court, Congress attempted to bring clarity to the situation by preventing the rule’s implementation. A joint congressional resolution was approved by the House (253 – 166) and the Senate. However, it was vetoed by President Obama and the effort’s supporters didn’t have a two-thirds majority in both the House and Senate to override it.

10. Death Tax Repeal Act (H.R. 1105) House Vote: 114-1-161, Apr. 16, 2015 Senate Vote: None AED Position: Yes

Representative

Score

Rep. Jones, Walter (R-NC)

27%

Rep. McHenry, Patrick (R-NC)

91%

Rep. Meadows, Mark (R-NC)

64%

Rep. Pittenger, Robert (R-NC)

73%

Rep. Price, David (D-NC)

64%

Rep. Rouzer, David (R-NC)

73%

Rep. Walker, Mark (R-NC)

50%

Rep. Cramer, Kevin (R-ND)

100%

Rep. Ashford, Brad (D-NE)

90%

Rep. Fortenberry, Jeff (R-NE)

91%

Rep. Smith, Adrian (R-NE)

73%

Rep. Guinta, Frank (R-NH)

91%

Rep. Kuster, Ann (D-NH)

64%

Rep. Frelinghuysen, Rodney (R-NJ)

100%

Rep. Garrett, Scott (R-NJ)

45%

Rep. Lance, Leonard (R-NJ)

64%

Rep. LoBiondo, Frank (R-NJ)

91%

Rep. MacArthur, Tom (R-NJ)

100%

Rep. Norcross, Donald (D-NJ)

73%

Rep. Pallone, Frank (D-NJ)

55%

Rep. Pascrell, Bill (D-NJ)

64%

Rep. Payne, Donald (D-NJ)

50%

Rep. Sires, Albio (D-NJ)

73%

Rep. Smith, Christopher (R-NJ)

82%

Rep. Watson Coleman, Bonnie (D-NJ)

55%

Rep. Lujan, Ben (D-NM)

55%

Rep. Lujan Grisham, Michelle (D-NM)

64%

Rep. Pearce, Steve (R-NM)

82%

Rep. Amodei, Mark (R-NV)

73%

Rep. Hardy, Cresent (R-NV)

82%

Rep. Heck, Joe (R-NV)

73%

Rep. Titus, Dina (D-NV)

64%

Rep. Clarke, Yvette (D-NY)

55%

Rep. Collins, Chris (R-NY)

82%

Repealing the federal estate tax has been one of AED’s long-standing tax priorities. Some estimates indicate eliminating the tax could stimulate the creation of over a million jobs and over a trillion dollars in new capital formation. AED’s tax survey found that association members pay $31.82 million on estate tax-related insurance premiums each year in addition to the hefty fees for lawyers and accountants. The work of restoring certainty and simplicity to the tax code would be aided greatly by eliminating these costs along with the so-called “death tax.”

Rep. Crowley, Joseph (D-NY)

64%

Rep. Donovan, Dan (R-NY)

100%

Rep. Engel, Eliot (D-NY)

64%

Rep. Gibson, Chris (R-NY)

91%

Rep. Hanna, Richard (R-NY)

100%

Rep. Higgins, Brian (D-NY)

64%

Rep. Israel, Steve (D-NY)

55%

Rep. Jeffries, Hakeem (D-NY)

50%

Rep. Katko, John (R-NY)

100%

Rep. King, Peter (R-NY)

91%

Rep. Lowey, Nita (D-NY)

64%

Rep. Maloney, Sean (D-NY)

73%

Rep. Maloney, Carolyn (D-NY)

64%

The Death Tax Repeal Act (H.R. 1105) would scrap this onerous levy on family businesses once and for all. The legislation was approved by the House, 240 – 179,

Rep. Meeks, Gregory (D-NY)

50%

Rep. Meng, Grace (D-NY)

64%

Rep. Nadler, Jerrold (D-NY)

60%

Rep. Rangel, Charles (D-NY)

55%

September 2016 | Construction Equipment Distribution | www.cedmag.com | 31

Representative

Score

Rep. Reed, Tom (R-NY)

100%

Rep. Rice, Kathleen (D-NY)

64%

Rep. Serrano, Jose (D-NY)

55%

Rep. Slaughter, Louise (D-NY)

55%

Rep. Stefanik, Elise (R-NY)

100%

Rep. Tonko, Paul (D-NY)

55%

Rep. Velazquez, Nydia (D-NY)

50%

Rep. Zeldin, Lee (R-NY)

91%

Rep. Beatty, Joyce (D-OH)

64%

Rep. Chabot, Steve (R-OH)

64%

Rep. Fudge, Marcia (D-OH)

55%

Rep. Gibbs, Bob (R-OH)

91%

Rep. Johnson, Bill (R-OH)

100%

Rep. Jordan, Jim (R-OH)

40%

Rep. Joyce, David (R-OH)

100%

Rep. Kaptur, Marcy (D-OH)

70%

Rep. Latta, Bob (R-OH)

64%

Rep. Renacci, James (R-OH)

91%

Rep. Ryan, Tim (D-OH)

64%

Rep. Stivers, Steve (R-OH)

100%

Rep. Tiberi, Pat (R-OH)

100%

Rep. Turner, Michael (R-OH)

100%

Rep. Wenstrup, Brad (R-OH)

55%

Rep. Bridenstine, Jim (R-OK)

55%

Rep. Cole, Tom (R-OK)

100%

Rep. Lucas, Frank (R-OK)

91%

Rep. Mullin, Markwayne (R-OK)

91%

Rep. Russell, Steve (R-OK)

91%

Rep. Blumenauer, Earl (D-OR)

64%

Rep. Bonamici, Suzanne (D-OR)

64%

Rep. DeFazio, Peter (D-OR)

50%

Rep. Schrader, Kurt (D-OR)

64%

Rep. Walden, Greg (R-OR)

100%

Rep. Barletta, Lou (R-PA)

91%

Rep. Boyle, Brendan (D-PA)

55%

Rep. Brady, Robert (D-PA)

64%

Rep. Cartwright, Matt (D-PA)

50%

Rep. Costello, Ryan (R-PA)

100%

Rep. Dent, Charlie (R-PA)

100%

Rep. Doyle, Mike (D-PA)

64%

Rep. Fattah, Chaka (D-PA)

55%

Rep. Fitzpatrick, Michael (R-PA)

100%

Rep. Kelly, Mike (R-PA)

91%

Rep. Marino, Tom (R-PA)

91%

Rep. Meehan, Patrick (R-PA)

91%

Rep. Murphy, Tim (R-PA)

100%

Rep. Perry, Scott (R-PA)

60%

Rep. Pitts, Joe (R-PA)

100%

Rep. Rothfus, Keith (R-PA)

73%

Rep. Shuster, Bill (R-PA)

91%

Rep. Thompson, Glenn (R-PA)

100%

32 | www.cedmag.com | Construction Equipment Distribution | September 2016

but did not receive consideration by the Senate.

11. “Devolution” Amendment to FAST Act Proposed by Rep. DeSantis of Florida (H. Amdt. 802) House Vote: 114-1-606, Nov. 4, 2015 Senate Vote: None AED Position: No AED and the broader construction industry have battled efforts to eliminate the federal highway program and the federal gas tax (“devolution”). While not as prevalent as in the last Congress, once again proponents of reducing the federal role in surface transportation investment attempted to attach harmful amendments to highway reauthorization legislation. Rep. Ron DeSantis (R-Fla.) sought to amend the STRR Act with a “sense of Congress” (a nonbinding resolution) declaring “it is critical for Congress to phase down the federal gas and diesel taxes and empower the states to tax and regulate their highway and infrastructure projects.” The amendment, while not obligatory, was viewed by the business community and transportation advocates as a dangerous step toward full devolution of the federal highway program. The resolution was defeated handily, 310 – 118.

Representative

Score

Rep. Cicilline, David (D-RI)

64%

Rep. Langevin, Jim (D-RI)

64%

Rep. Clyburn, James (D-SC)

60%

Rep. Duncan, Jeff (R-SC)

40%

Rep. Gowdy, Trey (R-SC)

55%

Rep. Mulvaney, Mick (R-SC)

45%

Rep. Rice, Tom (R-SC)

82%

Rep. Sanford, Mark (R-SC)

60%

Rep. Wilson, Joe (R-SC)

82%

Rep. Noem, Kristi (R-SD)

91%

Rep. Black, Diane (R-TN)

64%

Rep. Blackburn, Marsha (R-TN)

50%

Rep. Cohen, Steve (D-TN)

64%

Rep. Cooper, Jim (D-TN)

73%

Rep. DesJarlais, Scott (R-TN)

45%

Rep. Duncan, John (R-TN)

73%

Rep. Fincher, Stephen (R-TN)

80%

Rep. Fleischmann, Chuck (R-TN)

82%

Rep. Roe, Phil (R-TN)

70%

Rep. Babin, Brian (R-TX)

64%

Rep. Barton, Joe (R-TX)

91%

Rep. Brady, Kevin (R-TX)

100%

Rep. Burgess, Michael (R-TX)

55%

Rep. Carter, John (R-TX)

82%

Rep. Castro, Joaquin (D-TX)

55%

Rep. Conaway, K. Michael (R-TX)

73%

Rep. Cuellar, Henry (D-TX)

88%

Rep. Culberson, John (R-TX)

64%

Rep. Doggett, Lloyd (D-TX)

50%

Rep. Farenthold, Blake (R-TX)

64%

Rep. Flores, Bill (R-TX)

55%

Rep. Gohmert, Louie (R-TX)

50%

Rep. Granger, Kay (R-TX)

90%

Rep. Green, Gene (D-TX)

73%

Rep. Green, Al (D-TX)

73%

Rep. Hensarling, Jeb (R-TX)

55%

Rep. Hinojosa, Ruben (D-TX)

80%

Rep. Hurd, Will (R-TX)

82%

Rep. Jackson Lee, Sheila (D-TX)

64%

Rep. Johnson, Sam (R-TX)

60%

Rep. Johnson, Eddie Bernice (D-TX)

60%

Rep. Marchant, Kenny (R-TX)

73%

Rep. McCaul, Michael (R-TX)

73%

Rep. Neugebauer, Randy (R-TX)

55%

Rep. Olson, Pete (R-TX)

73%

Rep. Oâ&#x20AC;&#x2122;Rourke, Beto (D-TX)

55%

Rep. Poe, Ted (R-TX)

82%

Rep. Ratcliffe, John (R-TX)

45%

Rep. Sessions, Pete (R-TX)

82%

Rep. Smith, Lamar (R-TX)

45%

Rep. Thornberry, Mac (R-TX)

91%

September 2016 | Construction Equipment Distribution | www.cedmag.com | 33

Representative

Score

Rep. Veasey, Marc (D-TX)

82%

Rep. Vela, Filemon (D-TX)

82%

Rep. Weber, Randy (R-TX)

64%

Rep. Williams, Roger (R-TX)

60%

Rep. Bishop, Rob (R-UT)

73%

Rep. Chaffetz, Jason (R-UT)

64%

Rep. Love, Mia (R-UT)

73%

Rep. Stewart, Chris (R-UT)

64%

Rep. Beyer, Don (D-VA)

55%

Rep. Brat, Dave (R-VA)

45%

Rep. Comstock, Barbara (R-VA)

100%

Rep. Connolly, Gerald (D-VA)

64%

Rep. Forbes, J. Randy (R-VA)

73%

Rep. Goodlatte, Robert (R-VA)

64%

Rep. Griffith, Morgan (R-VA)

82%

Rep. Hurt, Robert (R-VA)

55%

Rep. Rigell, Scott (R-VA)

91%

Rep. Scott, Robert (D-VA)

50%

Rep. Wittman, Rob (R-VA)

73%

Rep. Welch, Peter (D-VT)

50%

Rep. DelBene, Suzan (D-WA)

64%

Rep. Heck, Denny (D-WA)

64%

Rep. Herrera Beutler, Jaime (R-WA)

91%

Rep. Kilmer, Derek (D-WA)

64%

Rep. Larsen, Rick (D-WA)

55%

Rep. McDermott, Jim (D-WA)

45%

Rep. McMorris Rodgers, Cathy (R-WA)

100%

Rep. Newhouse, Dan (R-WA)

91%

Rep. Reichert, Dave (R-WA)

100%

Rep. Smith, Adam (D-WA)

75%

Rep. Duffy, Sean (R-WI)

64%

Rep. Grothman, Glenn (R-WI)

73%

Rep. Kind, Ron (D-WI)

55%

Rep. Moore, Gwen (D-WI)

55%

Rep. Pocan, Mark (D-WI)

45%

Rep. Ribble, Reid (R-WI)

91%

Rep. Ryan, Paul (R-WI)*

83%

Rep. Sensenbrenner, Jim (R-WI)

73%

Rep. Jenkins, Evan (R-WV)

100%

Rep. McKinley, David (R-WV)

82%

Rep. Mooney, Alex (R-WV)

64%

Rep. Lummis, Cynthia (R-WY)

64%

34 | www.cedmag.com | Construction Equipment Distribution | September 2016

U.S. Senate Voting Record Senator

Score

Sen. Murkowski, Lisa (R-AK)

78%

Sen. Sullivan, Dan (R-AK)

75%

Sen. Sessions, Jeff (R-AL)

78%

Sen. Shelby, Richard (R-AL)

56%

Sen. Boozman, John (R-AR)

78%

Sen. Cotton, Tom (R-AR)

56%

Sen. Flake, Jeff (R-AZ)

63%

Sen. McCain, John (R-AZ)

89%

Sen. Boxer, Barbara (D-CA)

50%

Sen. Feinstein, Dianne (D-CA)

56%

Sen. Bennet, Michael (D-CO)

67%

Sen. Gardner, Cory (R-CO)

89%

Sen. Blumenthal, Richard (D-CT)

44%

Sen. Murphy, Christopher (D-CT)

44%

Sen. Carper, Thomas (D-DE)

44%

Sen. Coons, Chris (D-DE)

50%

Sen. Nelson, Bill (D-FL)

56%

Sen. Rubio, Marco (R-FL)

60%

Sen. Isakson, Johnny (R-GA)

100%

Sen. Perdue, David (R-GA)

67%

Sen. Hirono, Mazie (D-HI)

56%

Sen. Schatz, Brian (D-HI)

56%

Sen. Ernst, Joni (R-IA)

89%

Sen. Grassley, Charles (R-IA)

78%

Sen. Crapo, Michael (R-ID)

56%

Sen. Risch, Jim (R-ID)

56%

Sen. Durbin, Richard (D-IL)

56%

Sen. Kirk, Mark (R-IL)

89%

Sen. Coats, Dan (R-IN)

100%

Sen. Donnelly, Joe (D-IN)

75%

Sen. Moran, Jerry (R-KS)

89%

Sen. Roberts, Pat (R-KS)

100%

Sen. McConnell, Mitch (R-KY)

89%

September 2016 | Construction Equipment Distribution | www.cedmag.com | 35

Sen. Paul, Rand (R-KY)

56%

Sen. Cassidy, Bill (R-LA)

75%

Sen. Vitter, David (R-LA)

75%

Sen. Markey, Edward (D-MA)

25%

Sen. Warren, Elizabeth (D-MA)

33%

Sen. Cardin, Benjamin (D-MD)

56%

Sen. Mikulski, Barbara (D-MD)

56%

Sen. Collins, Susan (R-ME)

89%

Sen. King, Angus (I-ME)

56%

Sen. Peters, Gary (D-MI)

50%

Sen. Stabenow, Debbie (D-MI)

56%

Sen. Franken, Al (D-MN)

56%

Sen. Klobuchar, Amy (D-MN)

56%

Sen. Blunt, Roy (R-MO)

100%

Senator

Score

Sen. McCaskill, Claire (D-MO)

56%

Sen. Cochran, Thad (R-MS)

100%

Sen. Wicker, Roger (R-MS)

100%

Sen. Daines, Steve (R-MT)

67%

Sen. Tester, Jon (D-MT)

56%

Sen. Burr, Richard (R-NC)

89%

Sen. Tillis, Thom (R-NC)

89%

Sen. Heitkamp, Heidi (D-ND)

78%

Sen. Hoeven, John (R-ND)

100%

Sen. Fischer, Deb (R-NE)

78%

Sen. Sasse, Ben (R-NE)

56%

Sen. Ayotte, Kelly (R-NH)

100%

Sen. Shaheen, Jeanne (D-NH)

56%

Sen. Booker, Cory (D-NJ)

44%

Sen. Menendez, Robert (D-NJ)

44%

Sen. Heinrich, Martin (D-NM)

44%

Sen. Udall, Tom (D-NM)

44%

Sen. Heller, Dean (R-NV)

100%

Sen. Reid, Harry (D-NV)

50%

Sen. Gillibrand, Kirsten (D-NY)

44%

Sen. Schumer, Charles (D-NY)

44%

Sen. Brown, Sherrod (D-OH)

44%

Sen. Portman, Rob (R-OH)

89%

Sen. Inhofe, James (R-OK)

89%

Sen. Lankford, James (R-OK)

56%

Sen. Merkley, Jeff (D-OR)

33%

Sen. Wyden, Ron (D-OR)

33%

Sen. Casey, Bob (D-PA)

56%

Sen. Toomey, Patrick (R-PA)

67%

Sen. Reed, Jack (D-RI)

44%

Sen. Whitehouse, Sheldon (D-RI)

56%

Sen. Graham, Lindsey (R-SC)

100%

36 | www.cedmag.com | Construction Equipment Distribution | September 2016

Sen. Scott, Tim (R-SC)

67%

Sen. Rounds, Mike (R-SD)

100%

Sen. Thune, John (R-SD)

78%

Sen. Alexander, Lamar (R-TN)

100%

Sen. Corker, Bob (R-TN)

75%

Sen. Cornyn, John (R-TX)

89%

Sen. Cruz, Ted (R-TX)

56%

Sen. Hatch, Orrin (R-UT)

89%

Sen. Lee, Mike (R-UT)

56%

Sen. Kaine, Tim (D-VA)

56%

Sen. Warner, Mark (D-VA)

56%

Sen. Leahy, Patrick (D-VT)

56%

Sen. Sanders, Bernard (I-VT)

25%

Sen. Cantwell, Maria (D-WA)

56%

Sen. Murray, Patty (D-WA)

56%

Sen. Baldwin, Tammy (D-WI)

56%

Sen. Johnson, Ron (R-WI)

100%

Sen. Capito, Shelley (R-WV)

89%

Sen. Manchin, Joe (D-WV)

67%

Sen. Barrasso, John (R-WY)

89%

Sen. Enzi, Michael (R-WY)

89%

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Conventional Opportunities Here’s how an enterprising AED member used the Republican National Convention as a platform to build Ohio’s technical workforce of the future. By Brett Levanto

“The government is not an entity apart from us … [it] is us.” Rep. Virginia Foxx, the outspoken advocate for improvements to the American technical education system, was in her usual form. The North Carolina lawmaker was taking a break from her role as co-chair of the GOP’s platform committee to participate in a workforce development panel held as part of the Republican National Convention’s Policy Forum – where Ohio industry stakeholders and technical educators had come to discuss workforce development. The panel, part of a full day of activity focused on workforce solutions for Ohio businesses, was the vision of Ken Taylor, Paul Liesem and the team at AED member Ohio CAT. From its headquarters facility a short drive south of Cleveland, the Ohio CAT staff turned the RNC’s national stage into their own platform for growing the skilled technical workforce. Taylor, Ohio CAT’s president, AED Board member and member of the Cleveland convention host committee, saw an opportunity from the beginning: use the RNC as a lure to draw together state-level policymakers, interest groups, allies and customers to tackle the challenge of sourcing, cultivating and retaining skilled workers. On this hot July day in Cleveland, 30 or so attendees met at Ohio CAT’s Broadview Heights headquarters first thing in the morning. Buses bearing identification as “VIP Transportation” delivered the group to downtown Cleveland for a morning panel headlined by Taylor and Foxx and moderated by the president of Cuyahoga Community College. A short walk from the convention center, lunch waited in a local restaurant, where the group participated in a roundtable discussion with representatives from the Ohio governor’s office, AED, AGC, SkillsUSA, FFA and Jobs Ohio. After more than four hours of engaged discussion, attendees headed to Ohio CAT’s demonstration booth outside the convention for some “hands-on” time atop an equipment simulator (in an air-conditioned tent powered by a Caterpillar generator). In retrospect, the effort was more than just a fun excursion at a national event; it could be a blueprint for all AED members – an example of the local, independent leadership demanded by our national needs: (1) Identify an opportunity – any event that would draw attention and entice attendees. For Ohio CAT, it was the nation’s political attention focusing on their own back yard. (2) Engage your network. Invite suppliers, customers, colleagues, associations, interest groups and even government officials. (3) Take care of the logistics. As you are able, provide transportation, food, credentials, materials, etc. Make things as simple for your participants as possible. (4) Be open. Don’t turn your participants into spectators. Involve them with discussions, demonstrations and activities. Share the microphone.

(5) Have a specific goal or desired outcome for the event. What behavioral actions or objectives are you trying to produce? For the Ohio CAT team, that objective was to stimulate broader and ongoing collaboration. The company’s two-decade relationship with Owens Community College in Perrysburg, Ohio, is a perfect example of community-based partnership. The school and Ohio CAT provide a tailored curriculum as well as dealer-based internships, under the umbrella of Caterpillar’s “ThinkBIG” program, to potential service technicians who graduate into jobs – complete with tuition reimbursement – at one of the dealer’s many locations. Together, the company and the school produce loyal, high-caliber, specialized technicians, unburdened by school debt and eager to hit the ground running as CAT Dealer Service Technicians. Yet, even with such an exemplary workforce development pipeline, Ohio CAT suffers from the skills gap as acutely as any other business. In a 2015 study for The AED Foundation, researchers at the College of William & Mary found the “skills gap” costs equipment distributors in the United States at least $2.4 billion each year and sends ripples up and down the supply chain. In Ohio – just as in any other area of the country – that means real money taken out of the pockets of hardworking men and women, real business opportunity unrealized and real loss in homes and communities. With so many different groups and so many independent approaches to the workforce crisis, nobody can fully benefit from isolated effort, however well-intentioned or effectively designed. So, the gathering at the RNC meeting marked the formation of a steering committee to “connect and unite Ohio’s workforce development programs,” which will continue to gather across the state throughout 2016 and into 2017. As Rep. Foxx, who chairs the House of Representatives subcommittee with jurisdiction over career technical education, explained during her morning appearance, only through investment and involvement can we improve government and policy. Foxx said that we are “the people” after all, in whose name the Constitution was written. While members of Congress and other national figures can help add perspective and attract attention to specific issues, real, lasting change is a community effort. As the group prepared to adjourn in the afternoon, Taylor rose and offered a few closing remarks. He thanked everyone for attending, praised the good work of his staff for making it happen and then illustrated the whole purpose of the day’s work – indeed, the underlying tenet of active citizenship and the kind of “grasstops” leadership demanded of AED members: “This wasn’t an event,” Taylor said, “it was a joint commitment to act.”

BRETT LEVANTO is AED’s director of government affairs. He manages regulatory and legislative policy initiatives in conjunction with government-affairsrelated communications. 38 | www.cedmag.com | Construction Equipment Distribution | September 2016

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Solutions-Based JCB of Georgia Gets Innovative Results JCB of Georgia is known for its exceptional service and products. By Dayna Maeder JCB of Georgia tackles problems head-on and provides innovative and successful results for its customers. In its 15-year history, JCB of Georgia has grown from its humble beginnings in a single-wide trailer to inhabiting a brand new facility adjacent to the JCB North American Headquarters. The company aims to provide exceptional service and a quality product for its community. “We’re a solutions provider,” said Gayle Humphries, JCB of Georgia's chief financial officer. “We like to provide solutions for our customers’ needs.” “We never settle for second best,” Humphries says of JCB of Georgia. “We have a skilled and educated team that’s able to provide solutions for construction and agricultural markets — and we never stop listening or learning.” She says JCB of Georgia not only provides quality products and innovative solutions, but it operates with high ethical values and offers exceptional service. “Our people have a genuine concern for the team, all of us,” she says. “We’re a family. We have a genuine concern for our team members and our customers.” This marriage of solutions-based customer service and concern for its employees is a winning combination for JCB of Georgia, and it was this effort that helped fuel their successes even through the recession. “Surviving the recession was a major challenge, and I’m very proud that we were able to keep our core people,” Humphries says. “Keeping the doors open was a challenge, (but) we did it and we did it well.” Well, indeed: JCB of Georgia recovered from the recession and is now experiencing their best year ever in 15 years; as of August 2016, the company is up over last year by 48 percent. Humphries credits AED with assisting in its success. As a board member, she has seen firsthand the benefit of AED membership not only for JCB of Georgia but for all companies involved in the organization. “The education that The AED Foundation provides enables me to devote my time to the dealership, and I’m confident that, in the training our team is receiving, they’re becoming stronger in their prospective fields,” she says. “I can focus on professionalism, customer satisfaction, and measuring financial metrics.” Through AED’s educational branch, Humphries can set up courses for her team in areas that she feels they need to improve

on or develop in, hand it over to AED, and they provide the training and information her employees need. She says this is valuable to JCB of Georgia both technically and financially. Those who attend AED’s courses can take Humphries modules on finances, parts, sales, rentals, and more, but Humphries points out that the value in networking with fellow dealers and peers is paramount for success in business. “Networking, sharing ideas with people in the industry, is invaluable,” she says. “All of us in this industry — and in any industry, really — face challenges. Networking together at the Equipment Economic Forum and Summit, the Financial/HR Symposium and other events allows us to share solutions.” She’s quick to point out that companies who comprise AED and attend these events need not worry about competing with each other. “There’s a sense of security that you’re not on an island; with the relationships you build, you can pick up the phone and ask if they’ve experienced this. Amongst members of AED, all the manufacturer competition is gone. You’re a team.” Although Humphries is currently not at liberty to share the changes that are in the works for JCB of Georgia, she does imply that the company is poised for growth. To learn more about JCB of Georgia, call 888-809-3612, visit www.jcbofgeorgia.com or connect with the team on Facebook at www.facebook.com/lowcountrymachinery.

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>> LEAD GENERATION

CHRISTINE CORELLI

Are You

“Referral-Worthy”? B

e honest now. How often do you ask for and/or receive referral leads? If you do ask, you probably need to step up the pace. If you don’t, you are not alone. It is truly amazing how many equipment distributors and their salespeople tell me they rarely ask for referrals. Some don’t know how to ask. Most, even if they know how, simply won’t do it. They’re just not comfortable doing it. Asking for referrals is probably the most important aspect of generating new business, and most professionals leave it up to fate.

Why are referrals invaluable?

Referral business is the least expensive way to obtain new customers. In addition, it has the highest possible leverage and the best potential payoff. Most importantly, a prospect whose name you receive through a referral is much more likely to listen to your pitch and less likely to seek out other sources to meet his or her equipment needs. You come to them with a built-in reference! Before you can ask for referrals, it’s wise to determine whether you and your dealership are “referral-worthy.” To do so, respond to the following questions to give you some insight into your customers’ experience with you and your company.

The Referral-Worthy Assessment

• Did you come to your customer with a level of expertise, product knowledge, and industry knowledge that far exceeds that of your competitors? • Did you first seek to “help” and build a trusted relationship before you started selling? • Did you provide your customer with ideas and solutions to their problems? • Did you LISTEN more than you talked? • Did you conduct yourself with the utmost integrity and professionalism? • Did you make sure your customer did not see any errors or find any unexpected surprises when they received their invoice? • Did you return their calls within 90 minutes? • If a problem occurred, did you immediately apologize and rectify the situation? • Did you call after the order to thank them, tell them how much you appreciated their trust in you, and make sure they were happy? • Did you and your entire staff make them feel like family? • Did you demonstrate how much you appreciate their business by sending them a handwritten thank-you note and, if appropriate, a small but meaningful gift? • Have you established a strong connection with them on both a business and personal level? 42 | www.cedmag.com | Construction Equipment Distribution | September 2016

• Did you and everyone who had customer contact end every call with, “Is there anything more I can do for you today? Thanks for your business.” • Did everyone in your company that had customer contact think and act as your dealership’s brand ambassador and display the highest level of professionalism? • Did you deliver on what you promised? • If your customer called to ask a question, did they speak with someone who is knowledgeable about all the issues involved with your equipment and service? • Did the people in your dealership sound friendlier and more caring than any competitor? • Was it easy to do business with your company? • Has your company gone through every touch point of customer contact to make sure your customer’s experience is always flawless, and do you consistently improve on each touch point? • Did your company consistently demonstrate a higher level of service throughout the entire customer experience? Hopefully, you answered “yes” to all of these questions. If you did, then you and your dealership are definitely referral-worthy. If you didn’t, make the necessary improvements in your sales endeavors and in customer service that will guarantee that you and your company are referral-worthy. Without it, your company will fall short in performance, especially at a time when leads are vital to create and sustain success.

The art of asking for referrals

Challenge yourself to make it a habit to ask for referrals. There is no magic bullet to approaching customers for that all-important referral. It just takes good instincts, honesty and professionalism.

Timing is everything

When should you ask for a referral? The ideal time to ask is simple: whenever your customers tell you how pleased they are! Ask after they have purchased new equipment or rented. Ask when they say they have received the benefits you promised. Ask when they order a part and receive it immediately. Ask after they bring a machine in for service.

from referrals. Is there anyone you might suggest I contact who would also love this new model?” “Joe, did our service department take good care of you? That’s great to hear. Joe, my service manager would appreciate any referrals you might be willing to give me. Is there anyone in your other facility who may want to look at our new equipment and have us take care of your parts and service needs?” The best way is to be direct and unassuming. Say something like, “Would you be comfortable introducing me?” If the lead might mean big business for you, invite both parties to dinner. Don’t oversell. Connect first. Find out about them, their job, their families, their interests. Talk football. Then, book an appointment with them.

Follow up FAST

This should be common sense: Don’t let referral leads sit on your desk or in your database without acting quickly. Your referral source may have told them about you. Like you, customers have a great deal on their minds. Call quickly or they may have moved on. The more you ask, the more you will get If you are too proud or uncomfortable to ask for referrals, you will lose out on some great possibilities. To increase your sales and build your business, you have always had to take on challenges and move out of your comfort zone. Getting in the habit of asking for referrals is just one more challenge to meet. Interestingly, the more referrals you ask for, the more referrals you’ll get. If customers know you want them and will act on them professionally, they will be inclined to watch out for you. After all, your good future is theirs as well.

CHRISTINE CORELLI (www.christinespeaks.com) is the author of six business books. She is a conference speaker and workshop facilitator who has worked with numerous equipment manufacturers and dealers and has been a popular speaker at numerous AED events. Reach her at 847-477-7376.

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Asking for referrals is just one aspect of doing business. If you do everything else well, this should be no exception. A face-to-face request is best. (If you hold an annual customer appreciation event, or entertain customers, those would be great times to ask!) A phone call is second best. Always ask for referrals graciously and not in a pushy manner. The three-step approach to tapping your customer base To obtain a substantial number of referrals, focus first on your existing customer base. Use the following three-step technique:

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BRUSH UP ON THE

FAIR LABOR STANDARDS ACT OVERTIME Are your exempt employees really exempt? Here’s what the new DOL overtime rule means for your company.

s you probably know by now, on December 1, 2016, most of your company’s exempt employees will need to earn almost twice as much as they do now if they are to remain exempt from the minimum wage and overtime requirements of the Fair Labor Standards Act, more By Maureen A. Murphy commonly referred to as the FLSA. The United States Department of Labor Partner (DOL) has increased the salary level Kopon Airdo, LLC from $455 per week to $913 per week and from $23,660 per year to $47,476 per year. These amounts will be increased every three years effective January 1, 2020. With this new rule, it seems like a good time to go back to the basics and review what the FLSA requires of employers, what liability can result from not complying with the FLSA, and what you can do to avoid liability and make sure your exempt employees are really exempt. AED hosted a webinar on this topic on July 14, 2016. You can view it at AED’s LMS: lms.aedu. org. 44 | www.cedmag.com | Construction Equipment Distribution | September 2016

What is the FLSA?

The FLSA was enacted in 1938 to ensure that employees were adequately compensated for their work. The law established a 40-hour work week, a minimum hourly wage, and a requirement that employers pay time-and-a-half for all hours over 40 actually worked per week. The FLSA also requires employers to maintain timesheets for its nonexempt employees, to provide equal pay for equal work and to post FLSA signage in the workplace. The DOL enforces the FLSA and adopts rules, like the new overtime rule, to implement the FLSA. The FLSA provides an exemption from the minimum wage and overtime requirements for the executive, administrative and professional staff of an organization. These employees are commonly referred to as “exempt” employees and include outside salespersons and highly skilled computer professionals – computer systems analysts, programmers and software engineers. Liability Under the FLSA When Congress enacted the FLSA, it wanted employers to take the law seriously, so the law includes provisions that make violating the FLSA costly for employers. Em-

ployers who don’t pay a nonexempt employee the minimum wage, or who don’t pay overtime to nonexempt employees, or who don’t maintain timesheets for their nonexempt employees are subject to liability for back pay, an equal amount as liquidated damages, civil penalties in some cases, and payment of the employee’s attorney’s fees. Damages can be assessed for up to three years of violations. Moreover, the FLSA exemptions are very narrowly construed, which means that if an employer misclassifies an employee as exempt, the employer can be subject to liability for unpaid overtime and other damages. Therefore, properly classifying your employees as exempt or nonexempt is critical to avoiding liability under the FLSA.

Who is an Exempt Employee?

In most cases, an employee is considered an exempt employee only if he or she meets all of the following three tests: Salary Basis Test: An exempt employee must be paid a predetermined and fixed salary. Because of this, an exempt employee can be expected to work more

than eight hours a day to complete their tasks; on the other hand, an exempt employee is not to be docked pay if he works less than a full day. Over the years, it has become customary for many employers to overlook both the “duties” test and the “salary level” test for purposes of determining whether an employee is an exempt employee or not, and instead to base an exempt determination on whether an employee is compensated by salary or by an hourly rate. Employers will often say that an employee is exempt because they receive a salary. The new DOL overtime rule reminds employers that the “salary basis” test is only one of three that must be satisfied in order for an employee to be considered an exempt employee. Duties Test: The DOL has not changed the basic “duties” test for determining whether an employee is an exempt or nonexempt employee. Consequently, the following tests still apply to determine whether someone’s duties constitute executive, administrative or professional duties: ▶ An executive employee must have as

his/her primary duty the management of at least a subdivision of an enterprise which includes the supervision of at least two employees and the authority to make hiring and firing decisions; ▶ An administrative employee must have as his/her primary duty office or non-manual work directly related to the operations of the employer or its customers and must have the responsibility to exercise discretion and independent judgment with respect to significant business matters; and ▶ A professional employee must have as his/her primary duty work requiring specialized knowledge acquired through prolonged education and the work must require the consistent exercise of discretion and judgment. Skilled computer employees – computer systems analysts, programmers and software engineers – are considered professional employees. For purposes of determining whether an employee meets one of these three tests, the job description for the position that the employee is employed in is the critical factor. Make sure you have a job description for each of your employees

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September 2016 | Construction Equipment Distribution | www.cedmag.com | 45 2016-08-03 11:19 AM

that accurately reflects the duties, skills and minimum education required for the position in which they are employed. Make sure that job titles and job descriptions match up – if you have three administrative assistants, then all three should have the same job description. Also, if one of your three administrative assistants is classified as nonexempt, then all three should be classified as nonexempt. If your three administrative assistants are classified differently because they have different duties and responsibilities, then they should have different job titles with job descriptions that accurately match the differences in their responsibilities. Salary Level Test: Until the new DOL rule, employers tended to overlook this test, which was easy to do because the salary level was so low: $455 per week or $23,660 per year. Most exempt employees earned at least this much. The salary level has now

been set at the standard salary level equal to the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region (currently the South): $913 per week and $47,476 per year. For purposes of determining whether an employee earns at least $47,476 per year, nondiscretionary bonuses, incentives and commissions can count toward up to 10 percent of the required salary level, as long as employers pay those amounts at least quarterly. A bonus is nondiscretionary if either the fact of the bonus or the amount of the bonus is promised. For example, an employer who promises a $500 bonus if business is good has established a nondiscretionary bonus, since the amount of the bonus has been promised; likewise, an employer

who promises a bonus to all employees at the end of the year has established a nondiscretionary bonus because the payment has been promised.

Special Rules for Salespersons

“Outside Salesperson” Exception to the Salary Level Test. Outside salespersons are exempt employees regardless of amount earned. This means that these employees are considered exempt employees even if they do not earn at least $47,476 per year. To qualify as an outside salesperson, the employee must regularly and consistently work off-site and must have as his/her primary duty the responsibility for making sales or securing orders for services or the use of facilities. Inside Salespeople: Inside sales personnel are nonexempt employees based upon their job duties, not because of the new salary level test. If you are not already paying your inside sales staff on an hourly basis, subject to overtime and minimum wage requirements, then you should do so. Tips for applying these new rules to your organization: 1) Prepare a spreadsheet of all employees that are currently classified as exempt, categorized by job title. 2) Remove the following from your report: Outside salespersons—they are exempt even if they make less than $47,476 Inside salespersons—they are nonexempt employees 3) For your remaining employees, review their job descriptions and determine whether their job duties match the description of an executive, administrative or professional employee. If they do not meet exemption requirements based upon their duties, they should be reclassified as nonexempt.4) If you determine that you have employees who receive a salary and fulfill the duties of an executive, administrative or professional employee, but who are paid less than the new salary requirements, then you need to determine whether you can increase their salaries to meet the new DOL threshold. If you cannot do so, then those employees need to be reclassified as nonexempt, and they must be paid overtime for hours actually worked over 40 per week. Importance of time sheets. The law requires that you maintain accurate time records for your nonexempt employees. Some states require that you maintain them for your exempt employees too. If you don’t use timesheets, now is the time to start.

MAUREEN A. MURPHY is an attorney with Kopon Airdo LLC, which practices in the area of complex civil litigation including commercial litigation, employment law, university and college law, products liability, construction law, insurance coverage and tort litigation. The firm represents a diverse group of not-for-profit and commercial organizations. 46 | www.cedmag.com | Construction Equipment Distribution | September 2016

How to improve your management skills to the

next level! October 16-18, 2016

January 8-10, 2017

April 3-5, 2017

Time: Sunday 4:00 pm Tuesday, 4:30 pm

Introducing A New Management Development Institute Specifically for Professionals within the Construction Equipment Industry The AED Management Development Institute (MDI) offers the opportunity for both new and experienced managers to strengthen core leadership abilities, deepen functional knowledge, and explore the strategic connections across lines of business. Learning sessions are facilitated by expert leadership development professionals and business instructors, with successful executives from across the association participating as keynote speakers. Participants gain from applying the insights from psychological assessments, and leadership coaching between sessions. For more information, please contact AED at info@aednet.org or 630-574-0650.

Strategies for Success — What will you Learn? Key program highlights • Key synergies between Sales, Service, Parts, Rentals, HR and Finance - learn from industry representatives who are prominent dealer executives.

• Self-awareness and insights from a battery of assessments, including AED’s Management Excellence 360-Feeback Assessment — discover yourself from every angle within the industry. • Methods for developing Emotional Intelligence • One-on-one coaching by an industry professional throughout the program — each student will meet in person with their coach throughout the sessions and then meet monthly by phone. Your coach provides guidance on applying what you learn and using your skills.

NEW! AED’s Management Development Institute — view more details at bit.ly/aedmgmt

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>> PROBLEM SOLVED

TROY OTTMER

Supporting the Customer After the Sale When is the last time you evaluated your “product support” sales team?

Who does this? In past articles, I have written that this is the job of every person at the dealership, and yes, I still feel this applies without question. However, in this case I want to dive deeper into the “After the Sale Specialist” role, or, as is commonly used to describe this position, the “customer service advisor (CSA),” “customer support representative (CSR)” or “parts & service support representative (PSSR).” There is a new description for this position, “customer technical sales specialist (CTSS),” which seems to follow the continued evolution of the equipment we sell and the technology on this equipment. Dealers are recognizing that the role of an “aftermarket sales representative” is ever-changing and has reached a point in the evolutionary process that has dealers asking what they can expect from this person or group. Traditionally, this position used to focus solely on selling undercarriage replacement parts, along with the associated labor. From there, this position would also upsell on any other items that were identified after the machine inspection. Now this position is dealing with machines that are in many ways far more reliable, as well as far more technical, than in the past. Does this mean the machines have less after-sale revenue potential? No, not at all. What it means is that we must recognize and identify the differences in catering to the latest and greatest technologies, as compared to selling “old school” style repairs, such as undercarriage, line boring, etc. When is the last time you evaluated your “product support” sales team? If you’ve done this, then have you identified the required skill sets needed for each sales approach? If you haven’t, then you should. Technical sales are more about being proactive and using current technology and techniques to proactively sell the customer on preventative repairs, or “fixbefore-fail” methodology. The traditional sales

method did have a proactive aspect; however, this was usually focused on measuring someone’s undercarriage every 500 hours or so. This style of selling was often driven by the customer having an issue and then calling their local representative and asking them to come take a look. I’ve been doing this now for 30-plus years, and embracing technology for the sake of improving sales penetration has certainly seen a slow take rate in the industrial distribution arena. Yes, there is a cost to access or add this technology; however, considering the massive advancement in the available technology in the last ten years, and more specifically in the last five years, can we afford not to equip and align our CSAs with the correct tools to do the job? Now we have to ask ourselves, do we have the right managers managing the right people with the right skill set to use these tools? It’s a simple question, which oftentimes we all hesitate to ask, and yes, we all do this. In order for us as dealers to grow to the next level and improve our parts and service sales penetration, then we must not only look at the tools we have or do not have, but also at the people we have or do not have, at all levels. And most importantly, can these people engage our customer base and move the needle forward? This is about bringing the right people (managers and employees) together with the right tools (processes) in one common format, so that your dealership can support your respective customer base in a manner that will bring in the maximum amount of after-sales support revenue. Competition is fierce in today’s markets, and this will not get easier, so using your customer technical sales specialist, or whatever you choose to title them, to differentiate your dealership from the competition could very well be what sets the stage for future success.

TROY OTTMER is vice president of Fixed Operations at Doggett Heavy Machinery Services LLC in Houston. Ottmer has worked in the equipment and automotive industry for 24 years. He can be reached at troy.ottmer@ doggettmachinery.com.

48 | www.cedmag.com | Construction Equipment Distribution | September 2016

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Aims to Do the Impossible

Game-changing strategies and innovative results fuel its core business. By Dayna Maeder With a mission to do the impossible through innovation and game-changing solutions, VeriTread president Jeffrey G. Cox Jr. says the company has crafted the capability of being the only company that can electronically match hard-to-move freight with specific carrier capacity. “This unique capability has very wide-ranging implications that are proven to drive higher levels of efficiency for the entire industry,” he says. “We are more than cutting-edge technology, however. We have a unique company background that has provided us with a wide-ranging perspective on the daily shipping challenges distributors and transport companies are forced to overcome.” Cox points out that no amount of money can buy that type of hands-on expertise that took more than a decade to translate properly into an online toolset. He believes that VeriTread’s long-term approach and the refusal to skip steps along the way lends itself to the high level of industry credibility it enjoys. “The entire industry was completely undocumented,” he says. “It took years to catalog equipment dimensions, compile pricing data, and develop our proprietary rating system. I invested nearly all of our profits from the trucking business into building out these online decision tools. It was a big gamble.” Cox, 41, has a rich background in education and experience. Armed with a BS in management information systems and a master’s in business administration–specialty finance, Cox worked for a decade as a software architect for Lockheed Martin, 11 years as the founder and owner of Rounders Logistics, a Heavy Haul trucking business, and then the last two years as the owner and founder of VeriTread. Additionally, Cox comes from a third generation heavy equipment legacy. His grandfather cofounded Linder Machinery, and his father was its president for nearly three decades. Cox is also a third generation AED member. “My family had a long legacy in the construction equipment industry," he said. “However, most people thought I had lost my mind when I left Lockheed. On the surface it looked like I had traded in a high-paying technology job 50 | www.cedmag.com | Construction Equipment Distribution | September 2016

to start a small hauling company. Only my close friends and family knew what I was really up to.” What Cox was up to was creating a company designed to improve transportation efficiency for heavy equipment dealerships, manufacturers, and rental companies by building easy-to-use technology that connects and empowers all the stakeholders in a way that is innovative and familiar. “Innovation isn’t always obvious at first glance, but look a little closer at VeriTread and you’ll find that we have fundamentally improved the transportation experience. All of the critical tasks have been fully automated. Making fully informed business decisions in key areas like price, vendor selection, and service levels is intuitive and natural. You can easily enforce centralized freight management disciplines enterprise-wide. It is not just easier, it is better and more complete.” He’s quick to point out that this business is about the desire to improve the industry and about his genuine care for the people who make it run. He emphasizes that transportation is one of the most inefficient, expensive, and frustrating parts of the industry. “It is a top 4 COGS item for most distributors and remains highly fragmented and disconnected — we believe that this is where we can have the greatest impact and where we can do the most good,” he says. “VeriTread generates meaningful savings to distributors and OEMs, but we also make the trucking companies more profitable and successful. Everyone wins and everyone benefits.” On the horizon for VeriTread is a mobile app, which will continue companies’ innovation paths and extend their advantage. “Consider the efficiency gained from knowing where all the trucks are that are capable of hauling a particular load – company owned trucks or outside haulers. Now add to that equation the ability to know which trucks are properly insured and provide reliable service. VT is crafting the ability to engage those optimal haulers in real time.” For more information on VeriTread LLC, visit www. veritread.com.

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>> DEALER >> DEALERDEVELOPMENT DEVELOPMENT

Construction Equipment Technician Careers From “Vo-Tech” to “Career and Technical Education”: It matters. By Steve Johnson

Recently I have had some conversations with people about how much Career and Technical Education (CTE) has changed in the last 40 years or so. This is especially true in our industry where diesel-equipment technology has become far more sophisticated and complex and technology continues to change rapidly. When you visit a top-flight diesel-equipment technology program at a career and technical college today, it’s “not your grandfather’s shop.” Education for this kind of work used to be referred to as “vo-tech,” commonly perceived back then as where people went for training if they “couldn’t do anything else.” “Grease monkey” was a common term. Those were awful characterizations of the job back then, and of the people doing those jobs. Even today, our culture reflects some of the same stereotypes and obstacles. This is true even though our industry would perhaps describe the ideal prospective tech student for college recruitment as one who has completed a “pre-engineer” high school curriculum. It has struck me that sometimes we in the equipment industry inadvertently contribute to the old stereotypes in the way we communicate. That “old baggage” can be a hindrance to successful student recruitment for careers in construction equipment technology. The diesel-equipment technician career has evolved into something that demands rigorous education and sophisticated skills and knowledge. The career needs to be communicated to many different audiences as the high-tech position it is. Note that when I say “communicate” here, I’m referring to both what people hear and what they see as they explore the career and the industry. Here are eight suggestions to consider when communicating about our industry that can help us present the dealer technician career as the professional and rewarding profession it is. 1.) Present diesel-equipment technology as a “profession” to career decision-makers and decision-influencers, a profession that requires professional career preparation in high school and college. It may sound trite, but it’s not; perception is reality and our industry image remains a serious issue. Words make a difference. For example: ▶ There is a difference between “training,” commonly used to describe CTE, and “education.” Some people would say “dogs are trained; people are educated.” ▶ It’s “career and technical education,” not “vo-tech.” ▶ It’s “career and technical colleges,” not “vocational schools.” ▶ It’s “service technician,” not “mechanic.” 2.) Point out that the industry is looking for students with excellent high school academic performance, especially in math, the sciences, and computer technology. This is a prerequisite to ensure a successful college technical program experience. Remember that the “pre-engineering curriculum” mentioned above is the best high school preparation for a 52 | www.cedmag.com | Construction Equipment Distribution | September 2016

technician career. 3.) Emphasize the need for a diesel/equipment technology associates degree from a top-flight technical college as the best foundation for a successful technician career. Earning that degree is important to many students and their career influencers, parents included. Emphasize the word “career.” It isn’t merely a job; it’s the starting point for a career with multiple rewarding options for the future. 4.) When you refer a prospective student and his/her parents to a particular high school or college program, what they see and experience will speak volumes about our industry. Four things you may want to ask yourself before you make such a referral are: 1) Does this college program and facility reflect the professionalism that is so important, 2) Will this program provide the student with the program excellence and the skills and knowledge they are paying for, 3) Would I send my kids here, and 4) How do I feel about graduates that I have hired from the program? 5.) When looking at the service department and/or other facilities at your dealerships, ask yourself this question: If I bring students, career counselors, parents and others into these facilities, does what they see reflect the “professional career” that we are talking about in this article, or does it reinforce the old stereotypes? 6.) Students exploring diesel-equipment technician careers will want to talk with not only dealer management, but with service managers and technicians as well. Are all these employees able to represent the career as it should be presented? Do they present a consistent message without contradictions? You may want to educate these decision-influencers as to how to present the career honestly in a straightforward fashion, but in the context of issues presented here. 7.) The words “equipment technician” have not in the past and do not necessarily now mean “opportunity, excellent pay and rewarding career” to a lot of people. We need to communicate those benefits. For example: 1) No, these are not low paying jobs for those who cannot do something else. These are positions that offer excellent pay as well as personal and professional growth. 2) The outlook for technician demand is excellent both short- and long-term. We in the industry know that the technician shortage has been and continues to be a chronic problem. 8.) Heavy construction equipment is interesting and fascinating for many people. Let’s not forget that potential personal attraction to working on “big iron.” And it doesn’t hurt to emphasize that when you have big, expensive equipment like this, nobody is going to let just anyone work on it. You have to earn the right to be able to do that. For more information on technician recruitment and diesel/equipment technology college programs, including dealer tools that will help you in these areas, please visit www.aedfoundation.org.

>> DEALER DEVELOPMENT

Becoming a Top-Performing Branch Manager As the leader for your branch location, you are responsible for people, assets, business relationships, and profitability. This course is designed to address all the skill sets, processes, techniques, and even the time management skills to become a top performing branch manager. You are required to get things done through other people and have a following as the leader of your location team. You also need to be able to work on the business and not as much working in the business. This program will reset your perspective, giving you ideas, suggestions, and tools to become that top-performing leader to drive the mission of creating and keeping more customers while making money doing it. This course is key for corporate or branch location managers, general managers, and dealer principals who also have this responsibility.

Executive Summary Outline November 10, 2016

1:00 - 2:00 Market responsibilities Determining revenue potential Wholegoods potential Parts & service labor revenue potential Determining market participation & closing success Establishing market share goals

▶ Financial responsibilities Delivering an expected rate of return to the business owner Managing the assets of the organization Protecting the organization’s data Customer lists/customer purchase history/any data with financial value especially to a potential competitor

2:00 – 2:30 Customer service Establishing levels of employee authority Training employees to use the level of authority provided Coach a conflict resolution process Providing a communication method of customer feedback

8:00 – 8:15 8:15 – 9:00

Welcome and Introductions The role of a branch manager overview

▶ Market responsibilities Understand all market opportunities Establish & grow all market positions Grow customer satisfaction and customer base People Responsibilities Provide a clean, safe, productive, and fun work environment Appropriately staff for current/future operations Attract top talent Train & retain top performers Provide a path for growth 9:00 – 10:00 Financial responsibilities Establishing departmental goals/budgets Choosing key performance indicators 10:00 – 10:20 Break 10:20 – 11:00 Managing physical assets: Land/Building/Fixtures/Furniture; IT system; Parts; Wholegoods Inventory; Service Trucks & Tools 11:00 – 11:45 Protect the organization’s data: General ledger information; Customer lists; Website 11:45 – Noon Attendees complete assessment on financial responsibilities Noon – 1:00 LUNCH

2:30 – 2:50 Break 2:50 – 4:30 Strategic account growth plans Determining key customers Developing loyalty programs and services Conducting “How are we doing meetings” with key accounts 4:30 – 5:00 assessment

Day one wrap up and attendees complete market

November 11, 2016 8:00 – 9:30

People responsibilities: Properly staffing your dealership

9:30 – 9:50 Break 9:50 – 10:30 Recruiting top talent: Providing clear job descriptions, best sources for recruiting talent and establishing a hiring process 10:30 – 11:00

Initial onboarding training programs

11:00 – 11:30

Coaching & mentoring

11:30 – 11:45 Attendees complete the people responsibility assessment 11:45 – Noon

Wrap up & evaluations

Noon

Program concludes

September 2016 | Construction Equipment Distribution | www.cedmag.com | 53

>> DEALER DEVELOPMENT

Equipment Business War Games October 19-20 Philadelphia, Pennsylvania What is Equipment Business War Games? It’s a unique training event that that combines computerized business simulation and classroom lectures. It is customized to AED Dealership utilizing data from Cost of Doing Business. Participants work in teams of to “run” a dealership. Teams compete in real-time with other participants to see who has the best dealership.

Four benefits of attending Equipment Dealer Business War Games: ▶ Improve Business Acumen ▶ Practice Strategic Thinking and Business Planning ▶ Increase Financial Understanding and Confidence ▶ Build Leadership and Teamwork

Featured Upcoming Events: AED/AEM Equipment Economic Forum September 21-23, Chicago, Ill. Join AED and AEM as they join forces to present the new Equipment Economic Forum. Manufacturer and distributor executives will gather to learn current economic trends and market insight geared to inform business decisions for the upcoming year. Ottawa Public Policy Briefing October 27, Ottawa, On. During this meeting, you will hear from a range of impactful speakers about policy issues affecting the construction, energy, farming and mining equipment industries in Canada. In addition, you will have the opportunity to meet and network with peers from across the country.

54 | www.cedmag.com | Construction Equipment Distribution | September 2016

Two simple ways to register: ▶ Online at bit.ly/aedevents ▶ Call your regional manager at 630-574-0650

Branch Manager Seminar November 10-11 2016, Orlando, Florida As the leader for your branch location, you are responsible for people, assets, business relationships, and profitability. This course is designed to address all the skill sets, processes, techniques, and even the time management skills to become a top performing branch manager. You are required to get things done through other people and have a following as the leader of your location team. You also need to be able to work on the business and not as much working in the business. This program will reset your perspective in giving you ideas, suggestions, and tools to become that top performing leader of people to drive the mission of creating and keeping more customers while making money doing it. This course is appropriate for corporate or branch location managers, general managers, and dealer principals who also have this responsibility.

>> DEFINING CONSUMERS

TROY HARRISON

Want the Best Customers? Define Them If you want to succeed, you have to figure out your Fred.

Your best customers will have some common elements, whether they be demographical (size/location/ industry) or attitudinal and cultural, or some combination of the two.

Most sales forces underachieve, and that’s putting it kindly. Maybe yours does. Maybe you don’t even know or understand how it underachieves. But, in my 25+ years of experience, few sales forces fully justify the time and effort that the company invests. The reason is simple. Their salespeople spend way too much time making meaningless, agenda-free sales calls on people who can’t buy – and whose purchase wouldn’t move the needle if they could. In short, they spend too little of their time calling on their Freds. I’ve been consulting with business owners, sales managers, and training salespeople for a dozen years now. Sometimes it’s hard for me to remember what it was like to have a job working for someone else. But if there’s anything I’ve discovered in that twelve years, it’s that those business owners, sales managers and salespeople have an incredibly difficult time with defining their “Fred.” OK, full disclosure – I don’t remember where I got this expression but I’ve been using it for a long time. “Fred” is my shorthand name for my ideal target client. Not a client that I will accept, mind you – but the ideal target for me. I can ask the toughest questions of my clients and get the straightest answers – but when I ask my clients to define their Fred (and I explain what Fred means), I get weasel words. Why? I think it’s because we want to leave ourselves a lot of opportunities to accept non-Fred business (non-ideal business), and that’s where we go wrong. If you want to succeed in sales, figure out your Fred. Let’s take a deep dive into this. Figure out who your best customers are. Notice that I said “best” and not “biggest.” That’s because the two are not necessarily the same customer. What attributes do you assign to your best customers? I’d suggest that measurements like profit, growth, and time/labor spent to service would be big attributes. A customer that is profitable for you, that grows well, and that has an acceptable amount of TLS is your ideal client. Feel free to use your own measurements here,

but I’d advise you not to use gross revenue as your measurement – we’ve all seen high volume customers that weren’t profitable, didn’t grow, and required an extraordinary amount of TLS to keep. Your best customers will have some common elements, whether they be demographical (size/ location/industry) or attitudinal and cultural, or some combination of the two. Start writing them down on paper – you can always revise them. The key is to make your window fairly narrow – remember, we’re talking about your ideal business, not the business you accept. Don’t just settle for demographics; remember the WHO. What I mean by the “who” is this: I might describe my typical client as a business-to-business company from $5 million to $500 million. That’s a big window. But then I have to apply the “who,” as in, “A business to business company, from $5 million to $500 million, who has a sales force and intends to use that sales force as a key growth driver.” The “who” defines the attitude and culture. This works on an individual level, too. Individualize your Fred. OK, so now we’ve got the demographics and the attitude. We’re still not done, because for all you B2B types, you have defined your Fred in terms of companies. The problem is that you don’t sell to companies. You’d look pretty silly making a sales presentation to a brick building. You sell to people. So, now, who’s your Fred? Look at your company “Freds.” Who is your key point of contact within those companies? Again, I’m betting you’ll find some commonalities. Remember, your point of entry into a company determines your chances of success at selling to them; where do you need to enter? Most likely it’s at the top of whatever department buys and uses your products and services. Don’t just settle for an ideal company as your Fred, or even a company with an attitude (the WHO). Define it all the way down to the person or the title. If you do not define your Fred this far, you will never have success finding more Freds. Period.

TROY HARRISON is the author of “Sell Like You Mean It!” and “The Pocket Sales Manager,” and is a speaker, consultant, and sales navigator. He helps companies build more profitable and productive sales forces with his cutting-edge sales training and methodologies. For information on booking speaking/training engagements, consulting, or to sign up for his weekly E-zine, call 913-645-3603, e-mail Troy@TroyHarrison.com, or visit www.TroyHarrison.com. September 2016 | Construction Equipment Distribution | www.cedmag.com | 55

Webasto Offers Increased Productivity, Cost Reduction With locations around the globe, Webasto has unlimited resources to get its customers’ jobs done. By Dayna Maeder

ith an established global network of nearly 12,000 employees worldwide operating in 50 subsidiaries, Webasto Thermo & Comfort North America Inc. is in the business of growth through developing customer relationships. This strategy of understanding customer requirements has led to Webasto’s immeasurable success in creating long, trusting relationships in the off-highway business. Bob Lesher, national account manager off-highway for Webasto Thermo & Comfort North America The Engine-Off Climate systems from Webasto make it easy for that, with such Inc., says a large ou to manage your projects more cost-efficiently. Savings perand established network, his team is able to be close to its customehicle average in the upper 4-digit range. How much you actually ers, and also collaborate across business units and ave in each case can be found online. thewhich Webasto Fuel global With regions, in turn provides unlimited resources. Calculator you can estimate the savings for your construction Lesher, 64, has worked in this industry for and agricultural machines. 46 years, choosing to shift into this family-run business about five years ago. As he learned more about Webasto, he realized it was an outstand-

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ing fit for his own experience, background and industry knowledge. “It kept me in the industry in a somewhat different kind of role, and then of course I was most excited about and receptive of the opportunity presented by the fact that Webasto products benefit all off-highway users,” he said. “The product we offer is not tractor-brand specific, but helps every customer who purchases one — this product appeals to the entire industry.” The appeal of Webasto exists in its ability to measurably reduce all-in-all costs, extend equipment life, increase productivity and respect the environment, according to Lesher, and this claim is verifiable. In an Independent Emissions Testing Lab study, using a Webasto coolant heater on diesel engines was found to decrease PM levels at initial startup, extend DPF cleaning intervals, eliminate unnecessary engine idling, decrease CO and NOx emissions and enable starting during Calculate your winter. Webasto is a family-owned business that repersonal savings mains today in the sole ownership of the founder’s potential here! family, the Baier family. “In my career, I’ve had the opportunity to work in large corporate public companies as well as

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in family-owned, and I have found that the culture of a famiThis seemingly simple yet effective form of management is ly-owned company really is very different,” Lesher said. “The how Webasto applies its internal culture to its worldwide sucvalues of any organization come from the top down, and with cesses. a family, that sense of being part of something, the sense of As a member of AED, Webasto enjoys many of its benefits. belonging and sense of family, does find its way down the line. It Lesher has been a member since 1983 and has attended and been brings along with it a strong sense of teamwork and accountabili- involved with many activities and trainings. “The value I derive ty, one to another.” is the information that is shared and disseminated, along with As someone education and who has spent the networking “The values of any organization come from the top down, nearly half a value,” he said. “It’s and with a family, that sense of being part of something, century in this interesting, if you industry, Leshhang around as the sense of belonging and sense of family, does find its way er has advice long as I have, you down the line. It brings along with it a strong sense of teamfor other leadlook forward to ers who desire work and accountability, one to another.” every AED event. similar sucIt’s been a rewardcesses in their -- Bob Lesher, Webasto Thermo & Comfort North America Inc. ing relationship for businesses. me, personally and “A lot of professionally.” leaders work Despite its global on the business presence, Webasto is not yet a household name, and Lesher’s goal but don’t spend enough time working on the culture,” he said. is to remedy that. “Culture will always defeat strategy. You can have the most clear“On the immediate front, our focus is on raising market ly defined strategy, but if the culture is counter to that strategy, awareness,” Lesher said. “It’s remarkable to me that still today, so it’s not going to happen.” many of our equipment users have never heard of Webasto or the Lesher goes on to say, “Hire the right kind of people, then benefits that Webasto products provide. There’s a tangible, meaclearly define to them what your expectations are of their perforsurable cost savings and benefit through the use of our products.” mance. Give them the tools and trainings they need, get out of To learn more about Webasto products and offerings, visit their way so they can perform, and reward them well when they www.webasto.us. succeed.”

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Reduce DEF tank and injector issues

Eliminate cold starts

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September 2016 | Construction Equipment Distribution | www.cedmag.com | 57

>> LIKE-KIND EXCHANGE

STEVE CHACON

Selling Equipment at Auction? Don’t Ruin Your Like-Kind Exchange! Understanding the basics is one thing; the correct application of Section 1031 is something entirely different.

A successful 1031 like-kind exchange requires careful planning. Planning should include the following: ▶ Reviewing the transaction’s form and timing ▶ Understanding the like-kind exchange regulations ▶ An examination of the equipment owner’s larger tax picture ▶ An assessment of the equipment owner’s cash flow requirements For equipment owners selling at auction, the like-kind exchange (LKE) basics are fairly easy to understand. However, as a seller of equipment it’s critical to avoid being tempted into conducting an LKE without taking a thoughtful approach. If you are planning on selling and purchasing equipment under Section 1031, be sure to coordinate with a team of qualified professionals and begin the coordination before any sale takes place. Understanding the basics is one thing; the correct application of Section 1031 is something entirely different. Let’s review two common ways equipment owners run the risk of ruining their LKE before the transaction even starts.

First Mistake: Not Contacting an Experienced Qualified Intermediary

Created by tax law, a qualified intermediary (QI) is a neutral/disinterested third-party service provider that is a required component of most LKE transactions. QIs vary in areas of expertise and experience, so be sure to do your research and ask for referrals through your auctioneer. QIs are prohibited from giving tax and legal advice, but are often Certified Exchange Specialists®, certified public accountants and/or attorneys, and possess a wealth of exchange experience. QIs can provide critical information to help you structure and conduct your LKE neatly, within the requirements of the law. Be careful. Not everyone can act as a QI, and knowing who is qualified and who is disqualified from acting as your intermediary is critical. Generally speaking, a disqualified person is defined as a related party or agent of the seller conducting

the LKE. Related parties are described under Internal Revenue Code Section 267(b) or 707(b). An agent is defined under Treasury Regulation 1.1031(k)-1(k)(2) as someone who has recently acted as the consignor’s ▶ Employee ▶ Attorney ▶ Accountant ▶ Banker ▶ Broker It’s important to note that auctioneers and dealers can also be regarded as having agency relationships and may be disqualified under Section 1031’s regulations. It cannot be stressed enough how important it is to contact an intermediary prior to the auction. Most intermediaries do not charge fees unless you conduct the transaction through them. A call to discuss whether their services are needed will likely not trigger any fees.

Second Mistake: Not Consulting with an Experienced Tax Advisor

Regardless of the level of trust a consignor has with a QI, or the level of legal/tax experience the intermediary may have, the owner should also consult with an experienced tax advisor. Remember, QIs are prohibited from acting as advisors, and the consignor’s current advisors are likely disqualified from acting as QI. Equipment owners need a competent and experienced advisor to act as the interested party on the owner’s behalf. A strong tax advisor can act as an advocate for the equipment owner by reviewing and assessing the goals of the LKE, within a larger tax picture; reviewing and assessing current and future cash flow needs; reviewing the LKE’s structure and plan; reviewing the LKE documents; and completing the related tax reporting requirements. Don’t endanger your like-kind exchange. By contacting a QI and tax advisor early, equipment owners can effectively mitigate the risk of ruining their like-kind exchange transaction.

STEVE CHACON, CPA, CES, is Director of Exchange Operations at Accruit. For over 15 years, Steve has provided skilled and practical guidance as a financial statement auditor, tax advisor, entrepreneur and educator on Section 1031 like-kind exchanges (LKEs). 58 | www.cedmag.com | Construction Equipment Distribution | September 2016

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By John Chapin

n the leadership role, you already get that sales is the key to massive success and prosperity. You know the most successful companies sell better and more than everyone else. Starbucks doesn’t have the best coffee, they’ve simply sold an enormous number of people on doing business with them. To ensure colossal success for your company, here are the sales

out The ll Ab

Good Leade r

w o n s K I t ’ p s i A hs

facts you want to ensure your company is living by.

Fact #1: Sales has to be at the

top of the food chain. Everything starts and stops with sales. Without sales, there is no service department, no installation department and, in fact, no people, because you’re out of business. Until a product is sold, nothing moves.

No money goes into the bank, trucks don’t move, customers aren’t helped, nothing gets installed or serviced, and economies stop. Companies go out of business because they don’t sell enough at high enough prices. Companies thrive because they sell enough at the right prices to cover bills, payroll, growth, and mistakes. If you want to thrive in

Fact #1 Fact #2 Fact #3 Fact #4 :

Sales has to be at the top of the food chain.

Your focus needs to be on attitude and activity within the sales department.

good times and bad times, independent of the economy, the president, rules, regulations, and other factors, you do so with lots of sales. Everyone and everything has to support sales first and foremost. Note: This is not permission for the sales department to run roughshod over everyone, treat anyone like a second-class citizen, or break rules in order to sell something. All business must be clean and ethical, and all other departments treated with the utmost respect and professionalism. Also, for the love of God, don’t ever verbalize “sales department first” to other departments. “Sales first” is an unwritten rule. I don’t want to see this in an email or even scratched on a random notepad in bad handwriting. The other departments need to know and be told they are important. The key point: when push comes to shove, sales comes first. When the receptionist says, “that’s not my job” to a simple, reasonable request from sales, the receptionist’s attitude is addressed, not the salesperson’s demands or expectations.

Fact #2:

Your focus needs to be on attitude and activity within the sales department. A sales team with superior attitude and activity levels will always outsell a sales team with superior skillset and products. While skillset and product are important, and will be discussed in Fact #3, the actual acts of going out and connecting with a high number of people are paramount. The most important factors are how motivated the sales team is and how many people they talk to and connect with. When you’re hiring salespeople, you’re hiring attitude. You can’t teach drive and work ethic. You’re looking for people who are hungry, with a blue-collar mentality and a thick skin. You’re also looking for people who are extremely persistent and resilient. They need to follow through and follow up, and follow up, and follow up. Next, what is the activity level? Are

You must invest in your sales team.

they coming in early and leaving late, are they working on the weekends? Are they working on the right things? Are they selling anything? If you aren’t sure of their activity, go on calls with them. You can also call them, ask where they are, and surprise them in the field. I know of one company that tracks their sales reps’ activity via GPS, being able to ensure they are making the required 10 to 12 sales calls a day, beginning by 9 a.m. at the latest and finishing by 4:30 p.m. at the earliest. For those of you cringing right now, the only people offended by this will be the people who aren’t doing what they’re supposed to be doing. Bottom line: Hire attitude, set expectations around activity level and hold people accountable. And remember, at the end of the day it’s all about production. They are either paying their way and getting the job done, or they’re not.

Fact #3:

You must invest in your sales team. A highly effective sales team needs tools, resources, training and support. Your goal is to have them spending as much time as possible prospecting, presenting and closing. This is going to take 1) support people to do paperwork, order entry and other non-sales related items, 2) tools and resources such as CRMs, computer systems and other technology, and 3) systems and processes that standardize operations and remove all guesswork. Among other items, you should have a selling system in place complete with scripts, competitive information, and anything else that a salesperson could possibly need during an interaction with a prospect or customer. Next, invest in the development of sales skills. While attitude and activity are most important, a sales team that also has great sales skills is lethal. Invest in learning tools such as books, CDs, DVDs, classes and

Everyone and everything affects sales.

seminars. Salespeople should be continually practicing, drilling and rehearsing sales skills in sales meetings, in the car, with you and other salespeople, and even with friends and family members. You should also be throwing objections at them when you simply walk by them in the office. Preparation and knowing exactly what to say are critical.

Fact #4:

Everyone and everything affects sales. Everyone affects sales at your company – from the receptionist, who is the first person people come in contact with, to the janitor, who runs into people walking in and out of your building, to your truckers, your customer service people, and your salespeople. All make an impression, good or bad, and that impression helps determine whether or not people do business with you. Taking it a step further, it’s my belief that because selling is your company’s most important activity, everyone should be directly involved in sales. Everyone knows people and they should all be looking for possible prospects for your product or service. Yes, even the janitor and receptionist. If they pass on a name to the sales department and a sale is made, they should be rewarded with money, a gift, or something else of value, but all employees should be sold on your product and be looking for people to help. Everything counts. From clean floors to correct shipments, to properly spelled names, to all employees interacting with customers with caring and enthusiasm, everything sends a message as to whether or not your company is one people should do business with. Even the smallest item can affect a sale. On that note, you should be shopping your company. Call and see how the phone is answered. Ask for information. Is it sent? Does someone follow up? How and when? If they’ll know it’s you calling, have a friend or family member call.

JOHN CHAPIN is a sales and motivational speaker and trainer. For his free newsletter, or if you would like him to speak at your next event, go to: www. completeselling.com. John has over 27 years of sales experience as a number one sales rep and is the author of the 2010 sales book of the year, “Sales Encyclopedia.” You can reach him at johnchapin@completeselling.com. September 2016 | Construction Equipment Distribution | www.cedmag.com | 61

PRINOTH snow groomers and tracked utility vehicles boast cost effectiveness, efficiency and strong design combined with excellent working performance.

PRINOTH Machines Shine in Extreme Conditions The snow groomers and tracked utility vehicles perform brilliantly in tough working environments. By Dayna Maeder Optimal performance in extreme and tough conditions is the goal of PRINOTH’s machinery, and through innovation, technology and teamwork, it delivers on its objectives. In addition to stellar products and impeccable performance, top service and close customer relationships are PRINOTH’s highest priorities. The company’s vision is simple: “With its snow groomers and tracked utility vehicles, PRINOTH offers innovative solutions for highest customer value. We stand for quality and cost effectiveness.” Its mission is to achieve this objective through innovative products, customer focus, quality leadership, efficiency and strong employee orientation. Philippe Gosselin of PRINOTH says the company comes from a long history of tracked vehicle manufacturing that started in Italy in the early 1960s. Since then, PRINOTH has evolved into one of the most successful in its industry, according to Gosselin. “Our mission is to provide our customers with the best vehicles possible, backed by a dedicated team of passionate professionals that have always pushed the boundaries of research and development.” Gosselin, 44, says PRINOTH is inspired to be its best knowing that its products are used in the toughest working environments and that they perform brilliantly in such settings. Its driving force in the industry is the desire to be innovative and create solutions for its clients. Gosselin says the team listens to customer requirements and adapts its products consequently. It’s this business model that he advises other leaders in the industry to mimic. “Listen to what the market tells you; the capacity to adapt to different requirements is the key for growth.”. Likewise, Gosselin says that being a member of Associated Equipment Distributors (AED) has been beneficial for PRINOTH due to its great insights on the market in general, and in alerting the company to new opportunities as it currently develops its dealer network. Each member of PRINOTH’s team demonstrates a passion for performance-driven off62 | www.cedmag.com | Construction Equipment Distribution | September 2016

road products distributed around the world to do tasks that no other machines in their class can offer. In fact, it was testing the company’s products for himself that led Gosselin to realize the effect an innovative machine can have on difficult off-road tasks. “During my initial training when I first started to work for PRINOTH, I had the chance to try out the Panther tracked carrier on our test track,” Gosselin says. “Initially I was not sure I could go over the obstacles on site, but after driving through more than three feet of thick mud over 200 yards without even slowing down — and fully loaded! — I became a true believer. I was now convinced I was going to like my job, and my goal would be to get potential customers to Gosselin learn more about what our products can do for their business when it comes to off-road work.” Gosselin, who works on marketing coordination and management, enjoys design and architecture and recognizes an impressive and effective group of machines in PRINOTH’s Panther line. In addition to its snow groomers and tracked utility vehicles, PRINOTH assists customers in vegetation management, including mulching, harvesting and milling. The company says it is also looking toward the global proliferation in biomass fuels. The company desires to orient all its equipment toward practical everyday needs, and says that through individual configuration, the most varied of requirements from its international clientele can be fulfilled. PRINOTH plans to continue product development, to increase its dealer network, and to unveil and introduce the newest member of the Panther tracked carrier family. The Panther T14R is a rotating dumper that boasts the highest payload and speed in the industry. To learn more about PRINOTH and its equipment offerings, visit www.prinoth.com.

THE 2016

TIER4 BENCHMARK REPORT

THE HEAVY EQUIPMENT INDUSTRYâ&#x20AC;&#x2122;S MOST COMPREHENSIVE REPORT September 2016 | Construction Equipment Distribution | www.cedmag.com | 63

n 2004, the Environmental Protection Agency under the Clean Air Act signed the final rule introducing Tier 4 emission standards, a set of ambitious emission reduction standards for offroad diesel equipment to be phased-in over the period of 2008-2015. Last year EquipmentWatch published the first Tier 4 report that measured the overall adoption, acquisition, and practical ownership of Tier 4 assets. Once again, EquipmentWatch and AEMP partnered to survey the heavy equipment community in the interest of gauging how heavy equipment operators are implementing new technology to meet Tier 4 emissions standards, as well as to better understand the reality regarding the regulation’s impact on the industry.

TOTAL COST OF OWNERSHIP

Overview: The number of survey respondents who claim to own or manage heavy equipment decreased by approximately 20% when comparing 2014 results to now. However, looking at fleet sizes by respondent category we still see a large variance. Contractors and sellers reported owning the largest fleets, followed by DOT’s, and rental companies. Currently, market penetration of Tier 4 equipment is relatively low. Down almost 15% from last year, only 10% of contractors report having no Tier 4 equipment at all. A 5% increase from last year, approximately 40% of contractors report that Tier 4 comprises less than 20% of their fleet. The growth in ownership of Tier 4 equipment was expected given that in the 2014 survey, half of all contractors indicated that they planned to invest in Tier 4-compliant equipment within the next 18 months.

Life Expectancy:

Down about 10% from last year, respondents expect their tier 4 equipment to yield 1,355 more hours on average than their Tier 3 equipment. However, due to the fact that most Tier 4 equipment hasn’t hit the end of its economic life, these expectations have yet to be seen. 64 | www.cedmag.com | Construction Equipment Distribution | September 2016

Tracking Total Cost of Ownership:

Only down 3% from last year, 76% of respondents track their equipment-related ownership costs. How these companies are tracking their costs hasn’t really changed from year to year with accounting software still being the overwhelming majority (63%).

Annual Maintenance Costs:

An increase over last year, 96% of respondents expect maintenance costs for Tier 4 assets to either increase or remain on par with Tier 3 maintenance. Only 4% expected maintenance costs to decrease when compared to Tier 3 equipment. Overall, people are reporting slightly lower maintenance costs this year when compared to last year. Respondents report spending a yearly average of $4,637.00 on Tier 3 equipment, and an average of $6,493.00 to maintain the average piece of Tier 4 equipment.

Equipment Overhaul:

Due to its recent entry into the marketplace, most Tier 4 equipment has not yet had the chance to age to a point requiring overhaul. However, most respondents expect Tier 4 equipment overhaul to be more expensive than that of Tier 3 equipment (65%). The typical respondent expects to spend an average 19% more (7% more than last year) to overhaul a piece of Tier 4 equipment. Respondents are reporting an average of $21,621.00 (significantly higher than last year) to overhaul a piece of Tier 3 equipment. This means that equipment owners can expect to pay approximately $25,729.00 on average to overhaul a typical Tier 4 asset.

Mechanic Wages:

We learned last year that many equipment owners were taking extra steps to train their mechanics on Tier 4 equipment, which in turn increases their wages as well as maintenance costs. A 3% decrease from last year, 70% of respondents expect mechanics wages to stay the same for those working on Tier 4 equipment. Mechanics wage is currently at $47.00 per hour, only $1.00 less than what was reported last year for those working on Tier 3 equipment. The respondents who do pay their Tier 4 mechanics more are averaging $75.00 per hour, $20 more than what was expected for Tier 4 mechanics last year.

Fuel:

Staying constant from last year, only 22% of respondents expect the hourly fuel costs to decrease for the supposedly more fuel efficient equipment. Last year we revealed about a $12.00 per hour difference with Tier 4 equipment having lower hourly fuel costs. September 2016 | Construction Equipment Distribution | www.cedmag.com | 65

This year, respondents are reporting a fairly equal hourly cost with TIER 3 BEING $23.95 PER HOUR, and TIER 4 COSTING $23.40 PER HOUR.

FINANCING TIER 4

Reflecting drastic change, Tier 4 equipment now accounts for a majority of new heavy equipment acquisitions, which is unsurprising since newly manufactured heavy equipment must meet the EPAâ&#x20AC;&#x2122;s Tier 4 emission standards; approximately 63% of the heavy equipment financed or leased in the past 12 months is Tier 4, compared to 35% in 2014. On average, businesses can expect to pay 15% more for financing Tier 4 equipment compared to Tier 3.

INSURING TIER 4

Increased acquisition of Tier 4 equipment has impacted the insurance world as well. On average, approximately 43% of the policies written in the past 12 months have been for Tier 4 equipment. Predictably, the higher costs of Tier 4 equipment are associated with increased insurance rates. Businesses can expect to pay an average 30% more to insure their Tier 4 equipment relative to Tier 3 equipment.

RENTING TIER 4

What Rental Companies Say:

66 | www.cedmag.com | Construction Equipment Distribution | September 2016

Our recent survey revealed the vast majority of rental companies (81%) currently rent out Tier 4 equipment, down 11% from last year. Approximately 31% (a decrease from last year) of those who do rent out Tier 4 equipment charge more, reporting a 21% increase in rental costs for Tier 4 equipment (up from 13% in 2014). What the Renters Say: A growing majority of contractor respondents report that their companies rent Tier 4 equipment 74% (a 16% increase from last year). Contractors can expect Tier 4 equipment rental costs to be either on par or slightly more expensive than Tier 3 equipment rental. Contractor respondents experiencing increased Tier 4 rental costs reported an average 12% increase over Tier 3 equipment.

OVERALL THOUGHTS + PERCEPTIONS

Summary: Unlike our previous survey when more than half of respondents indicated an initial disappointment in the performance of Tier 4 equipment, it appears that the fears of equipment managers and

operators have been allayed somewhat since then. Several factors are likely contributing to higher TCO for some heavy equipment including increased purchase price, increased maintenance costs and additional training for employees and mechanics, as well as increased downtime for their Tier 4 equipment, which obviously negatively impacts their bottom lines. The impact of Tier 4 equipment’s increased original equipment costs on 2016 buying decisions varied among respondents. Half report it has no effect on 2016 buying decisions while one in five (21%) will be renting more equipment in 2016. Last year half of respondents had no plans to invest in Tier 4 equipment within the next 18 months -- regardless of industry seg-

ment (e.g., contractors, DOTs, rental companies). For those who are planning to invest in Tier 4 equipment, this year’s responses indicate a shift in preference for Tier 4 F equipment compared to Tier 4I equipment, which was most popular in the previous survey. In 2016, 78% of respondents who are considering investing in Tier 4 equipment indicated that they will be investing in Tier 4F equipment, with 43% preferring Tier 4I equipment. Overall preference for Tier 4F equipment is driven primarily by contractors and sellers, with DOT’s and rental houses leaning towards Tier 4I and Tier 3 Flex equipment. Following any planned Tier 4 equipment purchases, 38% of respondents overall still expect the Tier 4 saturation in their fleets to be less than 10%. While higher than the current rate of ownership, market saturation is likely to remain quite low through mid-2016. September 2016 | Construction Equipment Distribution | www.cedmag.com | 67

Social Media

>> SOCIAL EXPERIENCE

MARSHA FRIEDMAN

Can Make Or Break Your Brand

Through the power of social media, learn how to properly promote your brand and communicate with your customers. Often – much too often in my view – I talk with CEOs who are still resistant to getting involved with social media. It’s as if they view sites such as Facebook and Twitter as little more than pesky annoyances that are irrelevant to what they do. They fail to recognize just how powerful social media can be in promoting their brands, communicating with customers and handling damage control when complaints come tumbling in. What they don’t realize is that abstaining from social media really isn’t an option any longer. Social media carries on with or without you, and if you own or manage a business there’s a chance you are already a part of it – through people’s reviews and comments – whether you like it or not. Recently, I was thinking about the changing ways in which businesses and customers interact, and I asked Jay York and Brittany Vaill, two social media strategists at my company, for their insight about the role social media sites play in that interaction. “One good example is how Facebook is being used as a customer-service platform,” Jay says. “Customers can go to a company’s Facebook page and send the company a message instead of making a phone call or sending an email. People want to talk to you on social media and they expect you to talk back.” If you don’t have anyone managing your social media accounts, though, those consumer questions and complaints are met with silence – and that’s not good. Jay encountered such a situation not long ago when he began handling social media for a client. Previously, no one had monitored the company’s accounts. Ill will had been building with customers who had issues with the company’s product but were getting no response to their complaints. One of Jay’s first tasks was to begin responding to those unanswered social media posts. He was able to start building good will as a result. “You have to be there,” says Jay. “If the only way to contact you is through email or by phone, then that takes away a quick means of communication that many people want and expect.” Brittany reminded me that many daily newspapers traditionally

have had restaurant critics, movie critics or theater critics whose opinions could sway an audience. “But today everybody can be a critic,” Brittany says. “That means you need to step it up and be on your game because you never know when a disgruntled customer is going to show up on Twitter with an angry tweet.” Brittany and Jay say there are at least four ways social media is transforming the interaction between businesses and consumers: ▶ Quality of communication. The rise of social media and various social media tools, such as Facebook Messenger, have made communication much quicker and much better. Anyone now can dash off a quick comment or question at nearly any time. The same speed of communication goes for you as a company for whenever you have an important or timely message to share. ▶ Variety of audiences. Social media isn’t something that only young people use. Every generation is represented. Name a demographic and you can target them and reach them through social media. ▶ Responsiveness. You can respond quickly to customers’ questions, concerns and needs. That helps you build one-on-one relationships with customers who become loyal and spread the good word about your company on their social media sites. ▶ Transparency. The whole world can check in on how you handle those consumer questions and complaints. “If you go on a site and see that a company is responding quickly to its customers, then you are more likely to want to do business with them,” Brittany says. Of course, the opposite is also true. Never before have companies had to compete in quite this way. Years ago, consumers had no quick and easy way to gauge the reputation of a business, unless perhaps a neighbor or a cousin happened to have done business with you. Now they can see what the world thinks about you. And you certainly want them to think only the best. That’s why social media is not just a pesky annoyance anymore. It’s an important piece of your marketing that should command your attention in as professional a way as every other part of your business.

“People want to talk to you on social media and they expect you to talk back.”

MARSHA FRIEDMAN is a public relations expert with 25 years’ experience developing publicity strategies for celebrities, corporations and media newcomers alike. Using the proprietary system she created as founder and CEO of EMSI Public Relations (www.emsincorporated.com), an award-winning national agency, she secures thousands of top-tier media placements annually for her clients. The former senior vice president for marketing at the American Economic Council, Marsha is a sought-after advisor on PR issues and strategies. She shares her knowledge in her Amazon bestselling book, “Celebritize Yourself,” and as a popular speaker at organizations around the country. 68 | www.cedmag.com | Construction Equipment Distribution | September 2016

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>> INTERNAL REPAIRS REX COLLINS, CPA, CVA

Internal Repairs: Don’t Leave Profits on the Table Conflicts over discounting occur mainly when it comes to reconditioning inventory for resale. So what are most dealers doing?

For decades, service and sales department managers have been at odds over charges for internal service work. Service managers, when labor rates are discounted, find it hard to justify attending to work that compromises their departments’ profitability. And sales managers argue for discounts on service work to make it easier to sell refurbished or reconditioned inventory. Generally internal work is done to recondition inventory that will be sold as used, as a make-good on work that was not done properly initially, or on vehicles or other equipment used by the dealer. While dealers need to properly cost all internal work, conflicts over discounting occur mainly when it comes to reconditioning inventory for resale. So what are most dealers doing? Roughly a quarter of dealerships discount their customer pay labor rates, some by as much as half, when pricing internal work. Another 20 percent approach discounting by marking up their actual costs, some as much as 100 percent. That leaves more than half of the dealership community that charge the same rates for internal work as they do their external service customers. For several reasons, we suggest using retail rates on internals (for parts as well as labor). The service department has a certain inventory of labor to sell. If they have to discount their hourly rate they will be inclined to put off internal work. The dealer’s work moves to the end of the line, and the resulting delay can cause aging problems with used inventory, which erodes gross profit. Further, sales personnel typically look at the total cost investment in a particular piece of used inventory when setting the selling price. Where markups are based on retail costs for internal work, gross profits are higher. Where discounts are offered, the discount is in essence passed along to a buyer, even before any negotiation – and that translates to profits left on the

table. We have heard the argument that internal service work has to be discounted because the shop’s retail charges are not competitive with external or aftermarket repair work. The truth is that dealerships are remarkably competitive in their service pricing; they have to be to survive in today’s environment. You, the dealer, have the right tools and properly trained mechanics, so the work can be done quicker and better. The more complex reconditioning issues usually have to be dealt with internally anyway, and aftermarket vendors often make mistakes that have to be corrected by you back in the shop. The message you are sending may be just as important: customers who know that you farm out your own service work are likely to jump to the conclusion that your service work is either too expensive or not up to par. There are times when discounting service work is appropriate. Dealers focused on frontend sales might offer some sort of benefits to the service department in exchange for discounts, usually flexibility in scheduling the work. Discounted labor might also be called for in such circumstances as when reconditioning at retail rates would render a resale price unreasonable. (Yes, we acknowledge that the availability of “market values” on the internet has an impact on the ultimate selling price and the gross profit that is realized. However, those dealers pricing internal work at customer pay rates are typically achieving higher overall profits.) A service department’s biggest customer is typically the manufacturer for warranty work. Second in volume is usually the dealership itself. Retail internal service pricing ensures that this substantial volume of work contributes just as substantially to dealer profitability.

REX COLLINS is a Principal at HBK CPAs and Consultants. He directs HBK’s National Dealership Industry Group, which provides tax, accounting, transaction and operational consulting exclusively to dealers. Rex can be reached at 317-504-7900 or at rcollins@hbkcpa.com. 70 | www.cedmag.com | Construction Equipment Distribution | September 2016

advertisers’ index AmTrust Specialty Equipment...................................... 21

LiuGong Construction Machinery N.A. LLC................. 69

Arctic Snow & Ice Control, Inc..................................... 19

Paramount Equipment................................................. 71

BekaWorld LP............................................................... 45

Prinoth.......................................................................... 16

CDK Global..................................................................... 2

Prisim............................................................................ 59

Diamond Mowers........................................................ 49

Ritchie Bros.................................................................. IFC

eBS Mechdata, Inc....................................................... 39

Screen Machine Industries LLC................................. OBC

e-Emphasys Technologies Inc........................................ 1

Sentry Insurance Company......................................... IBC

EPG Insurance, Inc.......................................................... 9

Tag Manufacturing, Inc............................................... 37

FieldAware.................................................................... 17

Unified Purchasing Group............................................ 23

JCB Inc.......................................................................... 41

Veritread....................................................................... 51

Leading Edge Attachments, Inc................................... 43

Webasto Thermo & Comfort North America, Inc........ 57

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 © 2016 by Associated Equipment Distributors. Construction Equipment Distribution (ISSN0010-7655) is published monthly as the official journal of Associated Equipment Distributors. Subscription rate – $39 per year for members; $79 per year for nonmembers. Office of publication: 650 E. Algonquin Road, Suite 305, Schaumburg, Ill. 60173 Phone: 630-574-0650. Periodicals postage at Schaumburg, Ill. 60173 and other post offices. Additional entry,

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Pontiac, Ill. POSTMASTER: Send address changes to Construction Equipment Distribution, 650 E. Algonquin Road, Suite 305, Schaumburg, Ill. 60173.

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>> RISK MANAGEMENT

ERIC STILES

Selling Equipment from Overseas Requires Some Extra Care Q: My dealership sells equipment from overseas. What are the associated risks?

If a foreign manufacturer fails to meet U.S. safety standards and has no liability insurance, your dealership could be held liable in case of an accident.

A: Many innovations and new equipment designs come from manufacturers overseas. While it may present an opportunity for a sale here in the United States, there’s also a risk of liability if the equipment doesn’t meet U.S. safety standards. Before taking possession: ▶ Ensure they’re insured: Confirm that the manufacturer and the importer (if there is one) have product liability insurance of at least $1 million in the United States. Keep a copy of current policy limits on record. ▶ Inspect the equipment: Check that all guards, warning labels and operating manuals meet the guidelines set by the American National Standards Institute, the Occupational Safety and Health Administration or other recognized safety group. Make sure all labels are printed in the language of those who’ll operate the equipment. ▶ Give it a try: Test run the machinery to make sure it operates correctly and is in good condition. Make sure any safety guards, shut-offs, and other protective devices are in good order. When it’s time to sell the equipment, here’s how

you can further reduce your liability: ▶ Have the customer confirm: Make a note on the sales contract that the operating manual and all guarding and labeling are there and are in good condition. Ask your customer to sign off on each one. ▶ Provide a demonstration: Have the manufacturer or the distributor show the proper operation of the machinery - including all safety features. Record the demonstration so it can be used for future employee training. ▶ Make sure it’s complete: If you’re selling a used machine, never allow it to be sold “as-is” if it’s missing any guarding, labeling, or the operating manual. Remember, if a foreign manufacturer fails to meet U.S. safety standards and has no liability insurance, your dealership could be held liable if there’s an accident. By following these steps, you’ll be able to show you did your part to ensure safety standards were met before the sale, limiting your exposure.

As the endorsed P&C carrier for AED, Sentry Insurance offers great coverage options and services to meet your dealership needs. ERIC STILES is Sentry’s lead Account Executive responsible for maintaining the AED/Sentry relationship. 72 | www.cedmag.com | Construction Equipment Distribution | September 2016

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A mile-wide EF4 tornado leveled Grossenburg Implement.

A Sentry Insurance associate submits the claim for processing.

Dealership sales and service operations resumed.

A dealershipâ&#x20AC;&#x2122;s survival after a tornado can be determined by the actions it takes well before the storm hits. Grossenburg Implement suffered $19 million in damages from a tornado that lasted seconds. Sentry Insurance helped them get back in business in 3 days. In less than 12 months, they celebrated a grand re-opening of an all-new facility, well before some neighbors began rebuilding. Sentry offers proactive risk management solutions to help prevent losses, and post-event assistance to help your dealership recover quickly. Weâ&#x20AC;&#x2122;re more than insurance. Call 1-800-447-0633, option 1, to find out how you can get started with Sentry.

Property and casualty coverages are underwritten by a member of the Sentry Insurance Group, Stevens Point, WI. Individual life insurance, group and individual annuities and group products are issued and administered by Sentry Life Insurance Company, Stevens Point, WI. For a complete listing of companies, visit sentry.com. Policies, coverages, benefits and discounts are not available in all states. See policy for complete coverage details. 73-659A

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