Modern Machinery 75th Anniversary by Construction Equipment Guide

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ishes to exten nd ations to NERY RY niversary niversary. y. rers of Falcon Forestrry rtner with Modern more productive ste eep ment.com

CONGRATULATIONS CONGRATULA ATULA ATIONS TIONS

OUR CUSTO OMER DEMANDS BETTER QUA ALITY AND PERFO ORMANCE. The WA A600-8 is a top p performer in quarries acrosss North A America. i The Th powerful f l Komatsu K t engine, i enhanced h d torque t converter and Smart Loader Logic allow the WA60 A 00-8 to achieve low fuel consumption and high travel speeds. A newly designed easy fill 9.2 cubic yard bucket retains matterial better and provides better visibility, which contributes to siggnificant improvements in machine efficiency and productivvity.

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An International Harvester dealer opened for business in 1944 in Spokane, Wash., and named itself “Modern Machinery.” International Harvester had prospered during World War II by building trucks for U.S. military branches and Raymond Loewy-designed tractors for farmers. In 1944, the nation shifted gears. Businesspeople across the country were ready to put aside the constraints and dislocations of the war and enter a shiny new and “modern” era. This was the environment in which Modern Machinery was born. Seventy-five years later, it is clear the company has lived up to its name. Modern Machinery is an energetic, forward-looking heavy machinery resource for customers in several industries. Its diverse equipment lines are state-of-the-art, its service a model for how to satisfy customers and retain their loyalty. While “International Harvester” has been subsumed by history, Modern Machinery has emerged as a contemporary success story with an ending nowhere in sight. ** A defining moment for Modern Machinery came in 1976 when the company became a dealer for Komatsu Ltd., which had established a U.S. subsidiary just a few years before. Today, Komatsu is the secondlargest manufacturer of heavy equipment in the world and Modern Machinery is one of its busiest local partners with exclusive dealership rights in the Pacific Northwest. “It took a while to build that product line,” said Bill Crandall, Modern’s senior advisor to President Mark Fallon. “It took a while to learn the products and build a support network for them. We succeeded, though. Today, we are at a point where, by volume, Komatsu products account for two-thirds of our business.” Crandall has been around long enough to have personally witnessed much of that development of the flagship brand’s position. A Montana native, he ventured in his career as far as Alaska before returning to his home state and to Modern Machinery in 1986, joining the firm as controller. He subsequently served as chief financial officer and vice president of operations before moving to his current position.

y r e n i h c a M n r e d o M RAISIN NG YOUR EXPECTA X ATION T NS SINCE 194 44 Congratulations to Modern Machinery from SENNE EBOGEN on its 75th anniversary of dedicated d service and supporrt Modern Machinery has been teaching customerrs to expect more from their equipment e and their dealer forr 75 years. With each succeeding generation, Modern Machinery renews its sense of o purpose in business leadersship: • Ongoing investtment in the northwest’s best equipped service shops

Erich Sen nnebogen Owner an nd Managin ng Director SENNEBOGEN Maschineenfa abrik GmbH

• Sustained support for its communities throu ugh the Dennis & Phyllis P Washington Foundation From the SENNEB BOGEN family to all the employees and customers off Modern Machinery, we wish you y continued successs and prosperity.

www.senneb bogen-na.com | +1-7040 347-4910 7

Constantino Lannes nes President SENNEBOGEN LLC

Before his arrival, industrialist Dennis Washington put his stamp on the company. He bought and merged Modern Machinery with two Montana firms in Billings and Missoula, where he relocated the company headquarters. Branches were subsequently opened in Idaho (Boise and Pocatello), Oregon (Portland and Eugene) and, eventually, two more Washington branch offices in Kent and Rochester, and another Idaho branch in Jerome. Modern Machinery today is a key component of Washington Companies with 11 dealerships in four states connected by a closely integrated parts and service network. And then there is Russia. The 2001 acquisition of Pacific North Equipment gave Modern Machinery access to the coastal city of Magadan. The company ships Komatsu equipment to that eastern Russian city from where it is transported to non-stop goldmining operations in Siberia. A second Modern branch operates in the same region of Russia. Together, the two branches turned Modern Machinery into the top Komatsu dealer in Russia, an outcome surely never envisioned in 1944 by company founders. The international venture came together for Modern Machinery at a propitious time — on the eve of the severe recession that slammed construction and construction equipment industries in the United States. While companies here at home struggled to survive the economic downturn, Russian operations never slowed. Consequently, more revenue was generated in Russia during the period than in the United States. “It was

nice to be diversified at that time,” Crandall said in something of an understatement. Today, about half of Modern Machinery’s 700 employees are in Russia. Crandall has visited the overseas operations four times 9

himself. While no one on the United States side speaks Russian at this time, communication technology has lowered language barriers. More daunting is trying to do business across non-contemporaneous time zones. “We only have a couple hours out of the day when both sides are at work,” Crandall said. “That’s a challenge.”

“Falcon is one of the more recent.” The years of relationship-building have begun.

** Besides expanding its footprint, Modern Machinery has broadened its machinery offerings to meet the equipment needs of its general construction, mining, forestry, aggregate, utility and material-handling customers. Komatsu remains the principal product line, including Komatsu Forestry machinery, but numerous other equipment-yard mainstays are represented. To name a few: Wirtgen Group, Sennebogen, Madill. LeeBoy and Epiroc (Atlas Copco). The brand second in sales for the company was acquired only a couple of years ago — KPI-JCI/Astec Mobile Screens. The consortium of companies produces crushing, screening, washing, classifying and conveying machinery for aggregate operations along with portable, stationary and track-mounted plants. The equipment is absolutely indispensable to quarry work. Modern Machinery now offers the full KPI lineup for its customers across the Northwest and, more distantly, in Hawaii and Alaska. How does the company go about assembling such a catalog of topof-the-line brands? It is a two-way process, Crandall said. “Manufacturers contact us from time to time, particularly smaller ones, but bigger ones, too. After we agree to represent a company, what follows over years and years is the building of a relationship.” Example: A brand taken on in 2018 is Falcon Forestry, an Irelandbased company that manufactures purpose-built equipment for the timber sector including log-splitters and forwarders. “Most of our top brands we have had for years,” Crandall said.

** Modern Machinery generates some $700 million in business volume annually selling and servicing large industrial equipment in the United States. Ranking by industry, the biggest portion of the company’s equipment sales is general construction, followed by aggregate operations and then the forestry sector. Some of the machinery lines it represents do not fit neatly in one market sector or another — such as Komatsu dozers, which are sold across the segmented markets. Every company needs an excavator, it seems. The more specialized equipment has unique customer bases, such as Wirtgen and Hamm equipment for highway and parking lot pavers, Madill and TimberPro for logging companies, Sennebogen materialhandlers for recycling yards, KPI-JCI for the quarry industry and Komatsu dump trucks (40-ton to 690-ton) for mining. Whatever pieces of equipment are needed, Modern Machinery has them. Not everyone chooses to buy them, however. Like elsewhere in the heavy equipment world, renting machinery has somewhat changed the way companies do business. The deep recession seems to have permanently altered thinking about owning equipment. Consequently, rentals have become a key component of equipment dealers’ business. At Modern Machinery, it accounts for some 10 percent of business volume. Crandall sees no end to the rental trend. 10

“Renting of machinery definitely has grown, probably doubling in the last five or six years. It’s likely to keep growing.” He added that equipment rental touches every sector of the company’s business, though it is not as prevalent among forestry operators. Will Modern rent any piece of equipment? “Not exactly everything. We do reserve some products for sales. And some trade-ins you wouldn’t want to rent because they probably would break down on you. But, in general, the rest of what we have is for rent or sale.” All of that rented or sold equipment moving off Modern Machinery lots and onto job sites across the Northwest enjoys dealer support. Whether tied to Modern by a sales agreement or a rental contract, customers know the machines they’ve procured will operate as advertised or Modern Machinery service techs will make it right. Maintenance programs are systematic. Buyers and renters of new Komatsu Tier IV construction machines receive complimentary Komatsu CARE three-year scheduled maintenance agreements and five-year emissions maintenance assurances. Factorycertified technicians do the work on the machines using OEM parts. Those agreements complement Komatsu’s Komtrax telematics system, which tracks maintenance intervals. Modern Machinery built out the Komatsu service agreements with what it calls ModernCare. That program includes a 50-point inspection of equipment at every scheduled service call and sampling of oil in the company’s long-established oil analysis lab in Missoula. The oil analysis can be contracted for routine assessment, ensuring the viscous fluid is doing its critical job. Need dynamometer testing of an engine? Not a problem. Need a forestry forwarder rebuilt? Can do. Modern Machinery has the facilities for both. Because things break in machines that day after day

crack open boulders, or fell and move entire trees, or lay and compress molten asphalt products — tough work that stresses even the best-built machines — Modern Machinery has a fleet of trucks equipped to diagnose, repair and service equipment in the field. They are backed up by service facilities at each company location where machines are brought in for fine-tuning or more extensive overhauling. The company keeps a $15 million inventory of OEM parts, much of it in branch locations and the rest at central warehouses in Spokane and Portland. That sounds good, but when a pulley breaks or a gear strips in Montana, what good is a replacement part in a Washington warehouse? Much good, actually. Every weeknight, Modern runs a truck from its Washington warehouses clear to the other end of its service area so a needed part will be at the most distant dealership by 7 a.m. the next day. What’s more, if the broken component is on a customer-owned Komatsu machine, Komatsu will finance the cost of the repair. These heavy machines are expensive, after all, and their components can be costly. To help keep machines working, Komatsu offers a finance rate of 0 percent for 15 months on repairs costing anywhere from $7,500 to $100,000. “Komatsu has done that for a long time,” Crandall said. “I don’t know if other manufacturers offer that or not.”

gy recovery system in the Sennebogen material-handler that combines hydraulic and compressed nitrogen gas systems to store and reuse energy when a boom is lifted and lowered, recovering up to 30 percent of expended energy. Or how about autonomous trucks — that is, driverless? They are losing their novelty in the mining industry due to Komatsu’s so-called “autonomous haulage system” vehicles, which across the world have moved 2 billion tons of mined material in the past decade. Did the founders see that coming in 1944? Probably not. Modern Machinery is progressive in its hiring initiatives, too. It promotes college-level technical education and has established a pipeline for tech graduates. A Washington Companies foundation donated a quarter-million dollars to Montana State University-Northern in Havre to help fund the school’s new four-year diesel technology program and extend its partnership with the school. A similar relationship has been established with Centralia College in Washington, which also has a highprofile technology and trades curriculum. “We have relationships with those colleges and are looking for similar relationships elsewhere,” Crandall said. The involvement with the schools is not just charity. With construction trades struggling to entice young people into technical careers, the college initiatives are benefiting Modern Machinery by channeling tech graduates into its work force. “Our first and foremost goal in hiring is to attract talented people,” Crandall said. “The college connections certainly have helped. We want young people to know how much promise exists in a technical career. If a person will work hard, he can make money with us.” Because Modern Machinery makes money. It is a successful company with 75 years of growth and expansion to prove it. 

** The “Modern” in Modern Machinery is evident in the advanced technology and metallurgy incorporated into so much of the equipment the company sells. This includes Komatsu’s “intelligent machine control,” a GPS system that monitors the precise positioning of a dozer blade and coordinates it with the 3D model of a project. Or the GreenHybrid ener15

Timeline 1944 Modern Machinery opens in Spokane, Wash. 1976 Dennis Washington purchases the company. 1978 Mr. Washington purchases Western International (Missoula, Mont.) and Allied Equipment Company (Billings, Mont.) and incorporates the three into Modern Machinery Co., Inc. 1978 Modern Machinery becomes the Komatsu dealer for northwestern Wyoming, northern Idaho and eastern Washington. 1979 A new corporate headquarters is built in Missoula.

1998 The company purchases an IngersollRand dealer in Boise and becomes the Komatsu dealer for southern Idaho. 1999 Modern Machineryâ&#x20AC;&#x2122;s state of incorporation is changed to Montana. 1999 An additional branch is opened in Pocatello, Idaho, to serve the mining, construction and dairy industries in that area. 2002 The operating assets of Pacific North Equipment are purchased, and Modern Machinery becomes the Komatsu dealer in western Washington and Oregon, which adds branches in Kent and Chehalis, Wash.; Portland and Eugene, Ore.; and Magadan, 16

Russia. 2004 A new branch is established in Kalispell, Mont. 2005 The Chehalis, Wash., branch is moved to Rochester, Wash. 2009 A new a location is added in Jerome, Idaho. 2009 The company purchases Spomac, a Spokane fabrication business, and consolidates it with the existing location there. 2016 Modern Machinery assumes ownership of crushing and screening dealer AggReCon and becomes the KPI/JCI distributor for its entire four-state area. ď&#x201A;§

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FORESTRY America’s Northwest grows lots of trees. The four states that comprise the service area of Modern Machinery — Washington, Oregon, Idaho and Montana — contain 35 national forests and more than 18 million acres of private forestland. Russ Smith knows all about it. A territory manager at Modern Machinery for 11 years, the Washington native has been working in and around timber for almost four decades. He was a sales representative for a Washington logging supply company at age 21 before moving on to a timber harvesting equipment firm 11 years later. Twelve years of representing Madill Corp., the venerable Canadian builder of loaders and yarders, carried Smith to 2008 when he joined Modern Machinery, the Missoula, Mont.headquartered heavy equipment dealer. Now Smith is constantly on the road, living out of a “tail-puller” attached to his truck, visiting customers in logging and timber processing sites across the region and into Canada. The region is home to 70 or more sawmills and innumerable logging operations, all of which are served by specialized machines with arcane names like feller and forwarder. “I do sometimes feel like I am speaking a foreign language,” Smith said about the forestry industry lexicon. Komatsu Forestry’s 901XC “thinning harvester,” for example, is an articulated 8-wheeled, 230-hp tree-cutting machine with a 30-ft. cutting boom and a tilt cab to keep the operator level as it climbs and descends timberland inclines. The manufacturer also builds the new XT430-5 “feller-buncher,” which drops trees and piles the trunks in an orderly way for subsequent recovery. One of six feller-buncher models, the XT430-5’s 310-hp Cummins diesel engine powers four hydraulic pumps for tools, saw and hydrostatic track system — all riding on a beefed-up undercarriage. Another of the numerous forestry products in the Modern Machinery lineup is the Madill model 172 “tower yarder,” which transfers logs from stump to roadside landing area. The 55-ton Volvo-powered unit has a telescoping 72-ft.-long tower and five 250-ft. guy lines. How about a Falcon F40-8 “forwarder?” It rides on 8-wheeled bogie axles, has a 17ft. boom and can carry 4 tons of limbs and smaller-dimensioned trunks. Smith is a fan of Falcon’s new steep slope logging system that’s keyed to an attachable drum and cable system, which lets operators winch their way back up steep inclines. The innovation eliminates some hand-cutting of trees and the hazards that come with it. “I’ve lost a lot of friends over the years in logging accidents. This is the kind of equipment that’s making the industry a lot safer than it ever was before.” Some manufacturers represented by Modern Machinery have competing products, but they are differentiated by size. Acquisitions happen, too, which clarifies product lines in the company’s lineup. Earlier this year, for example, Komatsu acquired TimberPro, a Wisconsin manufacturer of several types of forestry equipment. Modern Machinery offers both lines of equipment. In his travels, Smith sees equipment change slightly from place to place to accommodate the types of timber being harvested. Tree saws, for instance, vary across locations, he said. “Some areas use 22-inch saws, but where there is pretty goodsized wood they’ll have 27-inch saws. Bar saws are common but we’re seeing more disc saws out there. We see more bar saws in Oregon than in Washington, because the trees are bigger in Oregon.” His customer base for Modern Machinery includes all kinds of timber work, softwood and hardwood, chipping operations and logging operations. And they vary greatly in size.

“Some have one tower yarder working, but I’ve seen up to 10 of them at one location. Most have two or three working 80 acres or so.” Modern serves them all — and a lot of the service is on site. The nature of forestry operations — often carried out in rugged, rather inaccessible landscapes — makes tech calls a premium service. “That’s why you have the various Modern Machinery dealerships coming out to the logging sites in our service trucks,” Smith said. “Each location has six or eight or a dozen trucks to meet the need. We do work in the shops at the dealerships, including major rebuilds, but generally in the forestry industry we go out to the customers. We have very, very talented mechanics that can work on anything, and work on other brands, too.” The company also rebuilds swing yarders that were originally fabricated from old World War II tanks. The machines are given new undercarriages and otherwise modified with Madill drive motors and Cummins 450-hp engines. The rebuilding is done in Modern Machinery’s Rochester, Wash., facility. “They were built in the ’70s, ’80s and ’90s and we spruce them up,” Smith said. The 58-year-old Smith is an industry veteran. He has served as president of the Alaska Forestry Association and sits on various other industry boards in Washington. He toys with the idea of listening to CDs in his traveling to learn the Russian language. Modern Machinery has a significant aggregate customer base in Russia, though its presence in the Russian forestry industry is limited. Smith said he wants to be ready in case the company pursues a bigger share of that forestry market. “Modern Machinery is a really good place to work,” he said. “If you work hard, they treat you well. It is a very organized company. They get equipment out to customers in a very timely manner. The company works very hard at doing things right.” 

AGGREGATE The relationship of a state’s population to the amount of aggregate work occurring in the state may not be evident to all. It is clear to Sam Braithwaite. “The more people who live in a state, the more demand there is for aggregate, for asphalt and concrete infrastructure,” said Braithwaite, who is aggregate sales specialist and product manager of Modern Machinery. It is all based on population. The equation is simple. “More people live in Washington, about eight million, than in Montana, for example, which has about one million. So, there is more aggregate business in Washington.” It follows that the biggest share of Modern Machinery’s overall U.S. business volume is in Washington. The aggregate component of the company’s equipment sales in the state is augmented by robust sales and service activity in its general construction and forestry divisions. The other three states in Modern Machinery’s service area — Oregon, Montana and Idaho — also have aggregate customers, of course, split pretty evenly between sand and gravel operations and quarry rock work. While none of the four states is among the top 10 U.S. producers of aggregate, there is plenty of rock, sand and gravel being processed in the region. The American industry is huge, after all, with 280 million metric tons of crushed stone and 170 million metric tons of sand and gravel produced and shipped just in the first quarter of this year, according to the U.S. Geological Survey. More than 5,500 companies in the 50 states are

supplying all that aggregate and Modern Machinery is meeting the needs of producers in four of the states, selling more than 3,300 pieces of equipment each year. This is the industry that Braithwaite has spent a virtual lifetime working in. The 46-year-old began as an 18-year-old, but his father was a 50year veteran of the industry. Before coming to Modern Machinery seven years ago, Braithwaite had done such things as superintend a portable aggregate plant, been foreman of a pre-mix operation and represented a foundry and machine manufacturer as its western U.S. sales manager. Now with Modern Machinery, he is on the road most days, crisscrossing a company territory that encompasses Washington, coastal and central Oregon and the Idaho panhandle. A counterpart, Roy Addyman, covers the rest of Idaho and Montana. Together, they serve customers that range from relative mom-and-pop businesses doing $1 million or $2 million a year in business volume to corporations with multiple-million-dollar operations. “Basically I’m taking care of customer needs, whatever they might be,” he said of his daily contacts in the field with companies large and small. “I try to ensure that they have ongoing product support, whether that means parts or tech service.” His routine is irregular and his customer service responsibilities can take him all over the place. On a recent July day, he was on an Oregon river consulting with a customer about his aggregate barge-loading sys-

tem and the next day at a quarry across state answering questions about a rental machine. In every case, the goal is to help a customer become a self-performing contractor. That is, to help a company build its knowledge base and its skill levels so it can do in-house what it otherwise might have to subcontract out. “A lot of growth in our business has come from helping customers become more self-performing by giving them a high-level of support,” Braithwaite said. “It’s one of the reasons for Modern Machinery’s success. We help customers do more on site and rely less on others. Building self-performance has been a driving thing for us.” The growth of business in his territory is measurable and Braithwaite attributes it to company-wide efforts to be as productive as the customers it serves. “When I took over the territory, the company was doing about $3 million dollars a year in the territory. The last couple of years we have done about $25 million a year in that same territory. The company has grown the business by eroding other companies’ business. It has done it with excellent leadership and lots of training. The stars aligned.” Quality products are no small part of the success story. KPI-JCI/Astec Mobile Screens is a “core product line “for Modern Machinery’s aggregate division, Braithwaite said. The various types of machines produced by the U.S. coalition of companies have become standards for the industry, including track-mounted crushers and screens, washing and classifying units and material conveyors and stackers. Models are stationary or

portable depending upon the jobsite requirements of a customer. The company’s flagship manufacturer, though, is Komatsu. It produces rigid-frame and articulated dump trucks for aggregate work — a good example being the 473-hp HM400-5 with a 44-ton capacity body. Other Komatsu equipment is adaptable across industry lines for utilization in construction and utility work, such machines as hydraulic excavators, wheel loaders, dozers and road graders. So, what happens if a Washington quarry owner wants to buy a Komatsu D61EX-24 midsize dozer for cosmetic landscape work, does he contact Braithwaite? Not necessarily. “I’m a specialist,” Braithwaite said. “I strictly deal with the aggregate side of equipment. We have full-line product guys at every branch for general equipment sales. If one of them needs my assistance, he comes to me.” It sounds a lot like teamwork and Braithwaite gives full credit to Modern Machinery’s leadership for cultivating the company’s winning culture. “The leadership is key. They give you enough rope to go out and succeed. They worry about managing customers’ needs and doing the right thing by the customer rather than just managing profits. I couldn’t ask for a better group of individuals to work with. Working here is like winning the lottery.”  21

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