Highway Equipment 80th Anniversary by Construction Equipment Guide

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Highway Equipment Company Celebrates Eight Decades in Business By Giles Lamberstson

above Marcellus shale gas deposits in Western Pennsylvania and is benefiting these days from the fracking boom of the past three years. The company serves contractors working in both the Marcellus and Utica shale fields in the northeast. “We are fortunate by being where we are in the country,” said company president Thomas Reynolds, the third generation of family leadership. “But there were lean years, particularly in 2009. It wasn’t fun. Nothing was easy at that time.” What’s more, prosperity can bring challenges. The enormous impact of the shale natural gas drilling activity in the region meant a major adjustment. It also ramped up activity at Machinery Rental, a division of Highway Equipment since 1951. “Fracking is a rental business,” is how Thomas Reynolds describes the effect of the drilling activity. “So rental is a huge part of our company right now and that will be going on for years. It is a different mind-

CEG CORRESPONDENT

Eighty years after opening its doors, Highway Equipment Company is still doing what it did in the beginning: prospering in difficult times. A common characteristic of the company in 1933 and 2013 is leadership with the last name of Reynolds. Business 101 “You need to pay attention to business,” said Dan Reynolds, CEO and chairman of the board of Highway Equipment, explaining the company’s success. “Keep your nose to the grindstone. Watch what’s going on. Be careful how you spend money and allocate resources. You get into trouble if you overextend yourself.” Add to those nostrums good old luck. Highway Equipment is located

D.L. Reynolds. 4

Pictured at an early board of directors meeting (L-R) are Norm Sarver, ES Shannon, D.L. Reynolds, Dave Knight and Al Dalessio.

Highway Equipment Company’s first location on 7th Street in Pittsburgh, Pa.

Renovations to Highway Equipment Company’s facility on Hamilton Ave.

Highway Equipment Company’s fleet of service and parts delivery vehicles on display at the dealership’s 6465 Hamilton Ave. location in Pittsburgh, Pa.

Congratulations to Highway Equipment ... a valuable resource for 80 years Gradall Industries, Inc., congratulates Highway Equipment Company for its 80 years of dedication to contractors and governments that require productive, versatile construction equipment in the western Pennsylvania area. Highway Equipment Company is your authorized source for versatile Gradall excavators including the new Series IV highway speed models that deliver greater productivity and versatility along with new mobility benefits. You’ll appreciate faster, easier travel up to 60 mph with a new Tier 4i engine and an automatic transmission. From the upper cab, mobility is also improved with a new transfer case and other features. See Highway Equipment Company for details about Gradall excavators with the power and versatility to handle the work of many different machines, and undercarriages to handle virtually any terrain. For information, demos, parts and service, contact your nearest Highway Equipment Company location:

Headquarters: Zelienople, PA (724) 452-7800 Branches: McKean, PA (814) 476-7755 DuBois, PA (814) 371-3600 Pittsbugh, PA (412) 361-3600

Brian McKinney is Highway Equipment Company’s heavy equipment sales manager.

Gordon Meeder is a field journeyman of Highway Equipment Company.

John McNally is Highway Equipment Company’s light equipment sales manager.

Mark Rudolph is a field journeyman of Highway Equipment Company.

Jim Fost is Highway Equipment Company’s asset and attachment manager.

John Nickl is a Highway Equipment Company field journeyman. 8

A common characteristic of the company in 1933 and 2013 is leadership with the last name of Reynolds. Dan Reynolds (L), CEO and chairman of the board and second generation family member, and Thomas Reynolds, president, a third-generation family member.

set. You operate differently. The whole team has to be rental-minded.” “We’ve always been in rental,” the youngest Reynolds added. “This is a different level than before, but we are comfortable operating in this environment. Highway Equipment can operate the way the market wants it to work.”

brands, a process driven by shifts in the market. At one time, bulldozers were the earthmoving equipment of choice and Highway Equipment moved a lot of them. In the 1980s, excavators started taking a bigger slice of sales and now dominate the realm, copping market share from both the top (dozer) and bottom (backhoe) of the dirt-moving market. An example of how economic activity and market trends affect marketing strategies is Highway Equipment’s experience with Hyundai, which the company added to its lineup a couple of years ago. “We invested a lot in Hyundai, adding it as a value brand when the economy went down,” said Thomas Reynolds. “But its performance and quality is such that we ended up marketing it widely.” Today, the company offers 19 full-size Hyundai excavators, five Hyundai mini-excavators, and three Hyundai wheeled excavators. Besides shifting brands, the past 80 years at Highway Equipment Company has seen a tectonic shift in construction equipment technology. Essentially, machinery in the field has evolved from almost purely mechanical to electronic and computer-dominated, from clankclank to whirrrrr. This evolution has been marvelous in some respects, not so much in others. The complexity and miniaturization that enhances function and performance has made them sometimes “virtually impossible to repair easily for the contractor,” Dan Reynolds observed, sometimes leading to swapping out of engines rather than dismantling them. “I don’t think that’s

Family Business When Lee Reynolds established the company in the Pittsburgh area in a one-room building that was both equipment showroom and office, he probably didn’t see it becoming a company with display rooms — and separate offices in four Pennsylvania locations — nor was the fam-

Pictured are employees at work in the Light Repair shop at the facility at 6465 Hamilton Ave.

ily’s central role necessarily part of his vision. Proximity played a role in how the legacy part played out: His son Dan grew up around machinery and turned out to be a “a nuts-andbolts guy.” He went on the payroll in 1954, and came on board full-time in 1961 after earning a business degree from the University of Notre Dame and spending a year in law school. (“It has come in handy over the years,” he said of his dalliance with the legal profession.) Allis-Chalmers was the mainstay brand in the early years and remained so when the equipment manufacturer became Fiat-Allis. That brand eventually was folded into the New Holland line of equipment; Highway Equipment today represents the New Holland line of skid steer and tractor loader backhoes. An early photo of Highway Equipment Company’s facility in Somerset, PA. The dealer’s product line has swelled into an array of dozers, wheel loaders, excavators, material handlers, trucks, progress.” trailers and specialty equipment. Mainline manufacturers represented Nevertheless, he praises the new machinery, its high-speed hydraulics include John Deere, Hyundai, Kawasaki, Kobelco, Dressta, Terex, and operator cabs that make equipment “so much easier to work with MOXY, Gradall — the entire list is quite lengthy. that it’s amazing. There have been a lot of changes and I like what I see.” He added that, overall, equipment is of higher quality than was true Equipment Evolution several decades ago. “There used to be quite a bit of difference between Through the years, the mix of equipment has changed along with the good and not-so-good machinery. Today, you can’t get by selling a bad 10

Pr Proud oud to help out with the heavy lifting Congratulations to our friends at Highway Equipment on 80 years of delivering great products and great ser vice. Winkle understands what it takes to keep customers working safely and productively day in and day out. It’s our job to make sure they can rely on Highway Equipment for lifting magnets, par ts and rebuild ser vices that work as long and hard as they do.

W inkle Industries Inc. 2080 West Main Street, Alliance, Ohio 44601 Tel: e 330.823.9730 Fax: 330.823.9788 www.winkleindustries.com

product.” Service Focus Even when the equipment is good — and especially when it is crammed with electronics — maintaining it is the key to profitable operation. Highway Equipment Company has been sending service technicians into the field since 1937. Somewhere between then and now, the company made technical support its byword, as in the slogan, “Service Is Our Best Product.” “We have invested a lot in our people and in tooling,” said Thomas Reynolds. “The market demands it. We talk about service all the time in our meetings. It’s part of our DNA.” Dan Reynolds said the company “makes a concerted effort to keep our technicians up to date, with more and more factory training every year. We have a stellar group of people, a really good blend of rookies and guys who have been here a long time and have a little gray in their hair.” Each of the four company locations has a service department. The new equipment

(L-R): Lon Mead, general parts manager; Jack Porter, general service manager; Tom Williams, field service manager; and Ken Roxberry, shop service manager are ready ready when customers need them.

Highway Equipment Company Field Journeyman Bill Ellser.

(L-R): Scott Gass, Gary Weaver, Ray Heusey, and Chuck Hartzell, all parts countermen of Highway Equipment Company are always ready to find the find the right parts for customers. 14

showroom-offices are in Zelienople (outside Pittsburgh), DuBois, and McKean. The rental office is in Pittsburgh proper and specializes in such contractor needs as light towers, compressors, and small excavators. When a call for support comes in, one of 28 technicians can be dispatched. Twentyfive service vehicles roll on demand, moving among contractor working sites and equipment yards. They perform minor repairs and routine service as required by manufacturers, or they can rebuild major components in a disabled machine. They are, in turn, backed by a parts department with an estimated 75,000 pieces on hand. This “enormous” inventory reduces downtime, Thomas Reynolds said. On average, 92 percent of parts requested by service technicians are grabbed from Highway Equipment shelves. The others are sped to shop or field through well-developed factorydirect channels. “Our inventory has more than tripled from just a few years ago,” said Paul Cunningham, chief financial officer, attributing the increase to the mushrooming shale-tapping activity. Though the pad-building phase of the frack-

and Utica oil and gas industry contractors, who took away the requisite knowledge that Highway Equipment is a prime source for equipment and service needs. After a company becomes a customer of Highway Equipment, Springer said it is not just satisfaction with the new equipment that keeps them customers. “First and foremost, it’s service,” he said. “As we say, service is our best product. People come to us and keep coming back to us because they know they are going to be taken care of, they are going to be treated well, their equipment is going to be kept up and running and making money for them.” In Lee Reynolds’ day, marketing was mostly word of mouth. It was satisfaction passed along in a personal recommendation here, a tip there. These individual pats on the back were augmented by occasional printing and distribution of fliers to offices of contractors, which took company marketing to a different level — direct mail, in current marketing parlance. Today, Highway Equipment’s recently updated Web site is an interactive marketing resource for the company. Phone apps

Joe Ow, field journeyman of Highway Equipment Company.

ing industry slowed somewhat, the company is staying busy meeting other “midstream” equipment needs — and now pad-building has begun to increase. Sales and Communication Even in a burgeoning market, equipment doesn’t sell itself, manufacturers’ claims notwithstanding. Highway Equipment has a heavy equipment sales manager and a light equipment sales manager, each with a cadre of salespeople. “They work very well together,” said Sales and Marketing Director Al Springer. The peer departments freely share any sales opportunities that pop up and are better suited for one or the other. This culture of mutual support seems widespread throughout the company. Springer has been with Highway Equipment for just two years, a period of steady sales and business growth stemming from the local economic boom. He has not, however, been sitting back and watching buyers walk in the door. “In the last two years, we have done a tremendous number of local trade shows in western Pennsylvania and Ohio,” he said. The promotional events mostly targeted Marcellus

Highway Equipment Company’s Dubois, Pa., facility.

Highway Equipment Company carries Kobelco equipment and Allied shears. 15

Highway Equipment Company iron was instrumental on the the demolition of Mellon Arena, the former home of the Pittsburgh Penguins.

When it came time for the Igloo (once home to the Pittsburgh Penguins) to be razed in 2012, Highway Equipment Compamy equipment played a key role. 16

keep industry executives in easy touch with the company. Social media reach new customers Lee Reynolds never dreamed of reaching. “We get inquiries for equipment from all over the world,” Springer said.

Looking Ahead Policy-making uncertainty notwithstanding, Highway Equipment Company isn’t standing still. The Marcellus explosion has spawned innovation, new ways of doing things, which translates into new equipment. It follows that the company has added “a lot of new products” from old and new suppliers, noted Thomas Reynolds. “We treasure our suppliers and partners. We hope to maintain strong relationships and, down the road, to gain more suppliers.” Highway Equipment Company moves with the market. The business was built on the strength of western Pennsylvania coal mines, then on steel fabrication, then on oil and gas fracking. Today, in the words of Dan Reynolds, the company is “in a little bit of everything. We’re in the pipeline industry, gas, coal, lumber, county and city (municipal), the scrap industry … and highway work gives us a lot of opportunities for business. There’s always something going on.” This mix of customers is keeping the company healthy at age 80 and looking down the road. Expansion, in fact, is a possibility, Thomas Reynolds said. “We’re going to have some things happening this year. It’s a well-mapped plan. We envision our company being a multi-state operation.” He said the company prefers to be guided by his grandfather’s enduring dictum that “service is our best product,” rather than to work up a formal mission or vision statement. But the vision is there. “We think we try to do a good job every day, and we try to look out years and years into the future. I think you have to do that. If you don’t, somebody else is.” (This story also can be found on Construction Equipment Guide’s Web site at www.constructionequipmentguide.com.) CEG

Global and Local During Dan Reynolds’ tenure with the company, he has seen this shift in business from local to global. Not only are inquiries dropping in from the other side of the world, the companies making the equipment are abroad, too. “When I started, most everything was made in the country,” he said, “and now very little is made in the U.S. It has been a major change moving to a global economy, a global market.” The move included a shift in interaction with manufacturers. Time was that a dealer could head to a plant in Moline or Peoria or Springfield and get to the bottom of a supply problem. It’s not that easy now. “Communication is a lot different these days,” Dan Reynolds said. “It used to be you could pick up and talk to the president or the parts guy and they were right here in the country. Now your chief engineer could be in Japan, Germany, Korea or Atlanta, Ga. Both Reynolds expressed chagrin about the federal government’s performance in recent years, the impact that Washington is having on the economy in general and construction in particular. Dan Reynolds said the future is bright for the company and the country. “If we can get the government out of the way, we’ll be in great shape.” Added Thomas Reynolds: “We always look for certainty and clarity in how to operate. Clarity out of Washington would be helpful.”

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