January 2016 ced final by Associated Equipment Distributors

January 2016

CED

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

Succession Planning Determine how to identify realistic options for the next level of leadership

n Get Social

Top benefits of incorporating social media

n New Member Spotlight

Tejas Equipment and its transformation

n Rebalance Your Business

Examine behavioral assets and liabilities

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contents CED Magazine | January 2016

vol. 82 no. 1

www.cedmag.com

>> FEATURES

Social Media for Your Business Here are 10 benefits of social media for business that skeptics need to know.

People Management: Is It Time To Rebalance Your Business? Balance sheets help determine if results and consequences of prior decisions add value or create disadvantages. What if your organization examined behavioral assets and liabilities this same way?

Succession Planning for the Equipment Distributors Identifying realistic options for the next layer of leadership is an essential process.

Summit 2016 AEDâ&#x20AC;&#x2122;s Summit & CONDEX is poised to begin - donâ&#x20AC;&#x2122;t miss it!

Case Study: Business Aircraft Work Hard for Construction Equipment Dealers Industry leaders explain the long-term benefits of aircraft ownership.

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

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

>> FEATURED COLUMNISTS Christian Klein

AED Vice President of Government Affairs

Kristin Crooks

AED Southcentral Regional Manager

Codie Taylor

Senior Consultant at Bluesky Strategy Group

Eric Stiles

Account Executive at Sentry Insurance

Brian Gareau Consultant and Author

contents CED Magazine | January 2016

>>COLUMNS

24 >> President’s Page

Brian P. McGuire looks back on The Foundation’s 25 years of building a dealer model for success.

16 >> Regional Report

Kristin Crooks explains how members can make a difference in the field.

26 >> Washington Insider

Discover the importance of supporting AED’s Political Action Committee (PAC).

28 >> Canadian Insider

Keith Butcher

Brandy Hearting

>> ADVERTISING CONTACTS

31 >> #AEDGetSocial

Managing Partner, Butcher Joseph & Co.

Vice President of Sales JON CRUTHERS 800-388-0650 ext. 334 jcruthers@aednet.org Advertising Sales Manager ALBERT J. RAMIREZ 800-388-0650 ext. 311 aramirez@aednet.org Production Manager MARTIN CABRAL 800-388-0650 ext. 313 mcabral@aednet.org Since 1920 Official Publication of

vol. 82 no. 1

Explore the expectations of the new liberal government.

30 >> Breaking Ground

Construction of the future home of Hydrema U.S. Inc. has begun in Cumming, Ga.

The new social experience for AED members.

44 >> Risk Management

Sentry discusses important safety questions for the construction equipment industry.

>>PLUS

34 >> Dealer Development

Review all of the latest updates from The AED Foundation including professional development and the 2016 annual campaign.

46 >> New Member Spotlight

AED welcomes the newest members to the association.

68 >> 9th Annual Foundation Auction 600 22nd Street, Suite 220 Oak Brook, IL 60523 630-574-0650 fax 630-574-0132

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

Bring your competitive A-game and bid on some great trips, items and more. The auction is sponsored by Ritchie Bros. and The AED Foundation.

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>> PRESIDENT’S PAGE

BRIAN P. McGUIRE

Twenty-Five Years of Building a Dealer Model for Success The AED Foundation’s Annual Campaign is in full effect.

By now you should have received some information in the mail, electronically in your inbox or seen the articles in Construction Equipment Distribution (CED) Magazine encouraging you to support the efforts of The AED Foundation (AEDF). Many of you have already made a tax deductible contribution in response to the annual appeal for financial support and I want to say thank you for your generous support. For those of you who have not yet made a contribution, I want to encourage you to please consider doing so today by visiting bit.ly/investaedf. The AEDF is celebrating its 25th anniversary this year, having been founded by a collection of industry leaders who knew that the construction equipment industry was lacking an institution that would be dedicated to ensuring a uniformed standard that colleges would teach future generations of technicians. They also saw the need for a unified voice when it came to promoting the careers available within the equipment

industry and the desire to see that high quality training would be available to all dealers. Fortunately, many of the founding fathers are still with us and able to witness just how far their vision has come. Today the AEDF has accredited just under 40 diesel technology programs across the country with a dozen more at various levels of the two year accreditation process. Thanks to the efforts of the regional managers and members, this number will continue to grow. This year we look forward to beginning the process of working with Canadian schools as well. In addition, The Foundation sponsors a one of a kind conference for diesel technology instructors every two years that allows for the sharing of best practices among these talented men and women. The next conference will take place on June 6 - June 9, 2016 at the State Technical College of Missouri in Linn, Missouri. Another accomplishment The Foundation has produced is materials that assist

dealers in promoting careers available within the industry. These materials are aimed at educating students’ parents and guidance counselors about the need and opportunity in the construction equipment business. Many dealers take advantage of The Foundation’s technical skill assessment and use it as part of their hiring and training programs. In 2016, with the transition to a new learning management system, many courses and webinars will be available to you on demand. If you or your training manager has not explored the industry-specific training options offered by The Foundation, you will want to make sure to do so. However, all this great work is only possible when you support The Foundation with your tax deductible contribution. I urge you to consider making a donation for the support and betterment of your industry today. If we do not support these efforts who will? No donation is too small and every donation helps.

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

>> OFFICERS

>> AT-LARGE DIRECTORS

>> REGIONAL DIRECTORS

DON SHILLING Chairman General Equipment & Supplies, Inc. WHIT PERRYMAN Vice Chairman Vermeer Texas-Louisiana WES STOWERS Sr. Vice President Stowers Machinery Corp. DIANE BENCK Vice President West Side Tractor Sales Co. TODD HYSTAD Vice President Vimar Equipment Ltd. DENNIS J. HELLER VP of Finance Stephenson Equipment, Inc. TIM WATTERS Immediate Past Chairman Hoffman Equipment Co. A. ROY KERN, JR. Foundation President Equipment Corporation of America

TODD BACHMAN Florida Coast Equipment, Inc.

RON BARLET West Reg. Bejac Corp. CRAIG DRURY Eastern Canada Reg. Vermeer Canada Inc.

JAMES P. COWIN Cowin Equipment Co., Inc. LARRY R. MILLER Kelbe Bros. Equipment Co. Inc. MITCH NEVINS Bell Trucks America KENNETH E. TAYLOR Ohio CAT COREY VANDER MOLEN Vermeer MidSouth, Inc.

RYAN GREENAWALT Midwest Reg. Alta Equipment Co. TODD HYSTAD Western Canada Reg. Vimar Equipment Ltd. CHRISTOPHER PALMER Northeast Reg. Wood’s CRW Corp. GILES POULSON Rocky Mountain Reg. Faris Machinery Co. JOHN RIGGS, IV South Central Reg. J A Riggs Tractor Co. JAY RODES Southeast Reg. Wilson Equipment Co., LLC

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

Event Spotlight Four Days — Two Different Programs!

Join AED for our Parts & Service Manager Development Seminars- Level 1. During these day-and-a-half programs, managers will discover unique tools to run a more efficient and profitable department. Mark your calendar Parts Manager Development SeminarLevel 1: March 15-16 Service Manager Development SeminarLevel 1: March 17-18

Register Now: bit.ly/aedevents Renaissance Schaumburg Convention Center Hotel 1551 Thoreau Drive N., Schaumburg, Illinois

Get Social with AED! Connect with AED on our new social media platforms.

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

Current events and news for the equipment distribution industry » AED Insider

17 » Industry News 24 » Data Trends 21 » Product Preview

8 | www.cedmag.com | Construction Equipment Distribution | January 2016

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>> AED INSIDER

President Signs FAST Act, Giving AED Huge Victory Following overwhelming House (359-65) and Senate (83-16) approval, on Dec. 4, President Obama signed into law the FAST Act (“Fixing America’s Surface Transportation” Act), an AED-supported five-year, $305 billion initiative (including $207.4 billion for the federal highway program). Following congressional approval, AED President & CEO Brian McGuire said, “After so many near misses and close calls, several cans kicked down the road and so many cliffs narrowly averted, we finally have long-term, fully funded highway legislation. The FAST Act is the culmination of more than a decade’s worth of effort by AED and its industry allies. Thanks in particular to all the equipment industry leaders who kept the political pressure on Congress to get the job done.” McGuire added, “This is more than a philosophical victory. Equipment dealers, manufacturers and their customers can now once again plan for the future. Over the next five years, the hundreds of billions of dollars in federal highway and transit investment guaranteed in the bill will stimulate more than $13 billion in equipment sales, rental and maintenance activity and support more than 4,000 dealership jobs each year.” Here are the highlights for the construction equipment industry: Funding. The FAST Act provides $207.4 billion over five years for the federal-aid highway program, a slight annual increase over MAP-21 (the last surface transportation authorization law). Based on an AED-funded study by Professor Stephen Fuller at George Mason University, we know that each dollar in highway spending generates 6.4 cents in construction equipment market activity (sales, rental, and product support). Consequently, AED projects that the FAST Act will generate $13.27 billion in equipment market opportunity (EMO) for construction equipment dealers over five years. The following table breaks the EMO down by fiscal year: Fiscal Year (Oct. 1-Sept. 30)

Federal Highway Apportionment

Equipment Market Impact

2015 (Actual)

$37,798,000,000

$2,420,000,000

2016 (FAST Act)

$39,724,000,000

$2,540,000,000

2017 (FAST Act)

$40,544,300,000

$2,590,000,000

2018 (FAST Act)

$41,420,500,000

$2,650,000,000

2019 (FAST Act)

$42,355,400,000

$2,710,000,000

2020 (FAST Act)

$43,369,800,000

$2,780,000,000

Total for FAST Act (2016-2020)

$207,414,000

$13,270,000,000

Despite urging by AED and its industry allies, Congress chose not to replenish the Highway Trust Fund (HTF) by increasing user fees (e.g., increasing the gas tax). Instead, the roughly $70 billion needed to fully fund the FAST Act and supplement the projected five-year HTF shortfall will essentially be a combination of general fund transfers resulting from savings and revenues generated by: ■ Passport revocation for “seriously delinquent” taxpayers ■ Federal Reserve Board dividend payment reduction and surplus 10 | www.cedmag.com | Construction Equipment Distribution | January 2016

account transfer ■ Strategic Petroleum Reserve sale of 66 million barrels of oil ■ Customs fees on airline and cruise passengers ■ Internal Revenue Service hiring private tax collectors ■ Office of Natural Resources Revenue royalty overpayment fix While five-years of guaranteed funding is welcomed and will restore much needed near-term certainty for transportation construction programs, there is work left to do. AED will continue to work with lawmakers to identify real and sustainable revenue streams to increase and stabilize the HTF for decades to come. Permit Streamlining. The Fast Act creates a new Permitting Council to establish best practices and model timelines with the goal of reducing the federal permitting process. The council’s authority extends to any project requiring authorization or environmental reviews from a federal agency involving infrastructure construction for renewable, conventional energy production, electricity transmission, and pipelines as well as surface transportation, aviation, ports and waterways. The hope is that the council will help expedite the approval of a vast array of infrastructure projects. The FAST Act contains several other provisions aimed to expedite the environmental review process Export-Import Bank. The FAST includes a provision to renew and reauthorize the Export-Import Bank through 2019, a top priority for the business community. WIFIA Fix. The FAST Act removes a limitation prohibiting projects funded under the Water Infrastructure Finance & Innovation Act (WIFIA) from being funded with tax-exempt financing tools. WIFIA’s effectiveness has been severely hindered by a bar on using tax-exempt financing (such as private activity bonds) to partially fund any project that also receives WIFIA assistance. Since WIFIA loans are only able to fund up to 49 percent of a project, local communities are left with a significant barrier to acquiring the remainder of the financing. The modification will allow local communities to take full advantage of the program by giving the option to use tax-exempt financing and other public-private partnerships in combination with WIFIA funds for major water and wastewater projects. Hours of Service. The FAST Act reforms the Federal Motor Carrier Safety Administration’s process for seeking exemptions from burdensome hours of service regulations, including making it more transparent and prompt. Furthermore, the legislation also allows 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. “The FAST Act is a major victory for transportation advocates and we thank Speaker Ryan for making it the top priority during his first weeks in office. But our work isn’t finished. AED will continue to press Congress to create new, sustainable revenue streams for the Highway Trust Fund to ensure the chaos surrounding the program in recent years is an historical aberration and not the new normal,” said McGuire.

>> AED INSIDER

AED Congratulates Its Longtime Members AED would like to recognize our longtime members in their achievements and contributions to the profession and encourage future progress in the construction equipment industry. Thank you for your membership!

25-year member award to Hyundai Construction Equipment: L-R Ben Yates, AED East Region Manager, Tom Owen, National Sales Director, Hyundai Construction Equipment Americas

25-year member award to Cecil I Walker Co.: L-R Joe Yoerg, VP & CFO, Cecil I Walker, Robert Henderson, VP & COO, AED

25-year member award: L-R Arlen Swenson, GM, Bobcat Enterprises, Thomas Trapp, President, Bobcat Enterprises, Robert Henderson, VP & COO, AED

25-year member award to State Equipment Inc.: L-R Jason Lamm, VP, State Equipment Inc., Congressman Alex Mooney (R-WV2), Terry Lamm, President, State Equipment Inc., Ben Yates, East Region Manager, AED

75-year member award to Rish Equipment Co.: L-R Ben Yates, AED East Region Manager, WD Burke, President, Rish Equipment, Congressman Evan Jenkins (R-WV3), Steven Hamilton, CFO at Rish Equipment

Announcing A New Location & Program for 2016 Financial Symposium

Don’t miss out on one of the top industry conferences for financial and human resource professionals to discover strategies for success! Join AED April 27-29 for our annual symposium in the exciting city of New Orleans, Louisiana! This year’s symposium will take place at the Loews New Orleans Hotel, and we are happy to announce that human resources will be included in the program as a separate track. Over the course of this day and half conference, attendees will have access to a variety of educational learning sessions with topics that include; next generation recruiting for technicians, legal must knows for financial executives, what to do if you get audited and more! Each year, attendees walkaway with an abundance of information to take back to their dealerships. View the full agenda and register today at bit.ly/2016aedsymposium and see what the buzz is about! Registration information Online: Register you and your team online by visiting: bit. ly/2016aedsymposium (link is case-sensitive). By phone: For more information and assistance, contact your regional manager today at 630-574-0650.

Reserve your hotel room By phone: 1-866-211-6411 Online: bit.ly/16symposiumhotel (link is case-sensitive) Rates start at $219 for single/double for deluxe accommodations.

Key Highlights To Take Back To Your Dealership: Finance • An analysis on essential tax information • Identifying when it is time to sell verse when to hang on to your equipment • Engage in an important economic outlook for 2016

Human Resources

• Listen to important explanations on crucial employment law changes • Reinvent your performance review process • Information to revamp your employee handbook

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

>> AED INSIDER

Summit’s Keynote Speakers to Deliver Unforgettable Messages Bush, Lacz, King and Stevens promise to inspire and inform. AED Summit’s keynote speakers will bear messages that we believe will remain long after you first hear them at Summit. We have four world-class speakers who will deliver unique and informative presentations. Former President George W. Bush and Canadian Deputy Head of Mission at the U.S. Embassy, Denis Stevens will share their experiences from their political positions. While former U.S. Navy SEAL, Kevin Lacz, and President of TaylorMade Golf, Mark King, will discuss their unique career experiences. Each speaker will provide insight and knowledge that can be applied back at your dealership. A Conversation with George W. Bush George W. Bush served in the Oval Office for eight of the most consequential years in recent American history. He faced challenges from a terrorist attack to a global financial crisis, resulting in difficult decisions that will shape the nation’s course and world affairs for decades to come. Join us for this unique opportunity to listen to the conversation about his experiences as the 43rd President of the United States of America. Behind American Sniper: Real-Life Accounts & Behind-theScenes Anecdotes with Kevin Lacz With a rare combination of passion and humor, Kevin Lacz shares his journey from borderline college dropout to commended U.S. Navy SEAL. While he struggled to define his own future as a college student, Lacz describes how the events of 9/11 were a turning point in his life, prompting him to enlist in the Navy and take the chance to not only prove himself, but also better himself. After nearly failing as an undergrad, where most people succeed, he risked it all and succeeded where most people fail (the SEAL program boasts an

85% attrition rate). Lacz inspires audiences with his transformation from struggling undergrad to honor student and college graduate following his eight years of service. Lessons in Leadership with Mark King Mark King, the president of adidas Group North America and chairman of TaylorMade Golf Company, was born and raised in Green Bay, Wisconsin and graduated from the University of Wisconsin-Green Bay. He joined TaylorMade Golf, then a start-up company, in 1980 and spent 20 years in sales before he was elevated to president in 1999 and CEO in 2002. Mark will reveal how he used the skills he mastered as a sales professional and how he acquired the other skills needed to successfully refresh and grow TaylorMade into a market leader. He will also share his experiences from starring in the television show Undercover Boss. Deputy Head of Mission Canada’s Embassy to the United States of America: Denis Stevens During his career with the Government of Canada, Stevens has served variously as Executive Director of the National Parole Board; Director of Operations at the Privy Council Office, the Department of the Prime Minister and Cabinet; Consul General in Seattle and since September 2013, Deputy Head of Mission at the Canadian Embassy to the United States. He has a Bachelor of Arts degree in Government with great honours from Harvard University, and a law degree and Master of Business Administration from McGill University.

Did you know that AED has a Polictical Action Committee (PAC)? To learn more about AED’s PAC, sign the consent form online today! AED’s PAC allows equipment distributors to speak with a common voice in the political process by helping to elect federal candidates who share the equipment industry’s political goals. The PAC is completely voluntary, supported by personal contributions from AED dealer members. However, contributions are only accepted from individuals employed at companies that have given their PAC solicitation consent in accordance with the Federal Election Campaign Act. You can fill out an AED PAC consent form by visiting aedaction.org/aed-pac. See Christian Klein’s article on page 26 for details on how PAC contributions are used.

AED Recognized by Washington D.C. Publication, The Hill The Association was mentioned as one of the most influential groups involved in the passing of the FAST Act. Early in December, President Obama signed into law the FAST Act (“Fixing America’s Surface Transportation” Act), a $305 billion initiative that will provide federal investment in infrastructure for the next five years, which AED estimates will generate more than $13 billion in equipment market activity. Read the top lobbying victories of 2015 here: bit.ly/AEDLobbyingVictory (link is case sensitive) 12 | www.cedmag.com | Construction Equipment Distribution | January 2016

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>> AED INSIDER

Rep. Paul Tonko Visits Milton CAT at Clifton Park Facility When U.S. Rep. Paul Tonko visited the Milton CAT facility in Clifton Park N.Y. in early November, it was a great opportunity to discuss several important topics that affect the construction equipment industry directly. The subject of conversation included; the passage of the longterm Highway Trust Fund, Section 179 depreciation rules of the tax code, Bonus Depreciation and workforce development programs. Wayne Clark, industry organization and government affairs manager of Milton CAT believes that distributors need to recognize the importance of participation in the industry trade organizations as well as AGC and their state Chapters, etc. Not just membership but engagement with oversight. Their members are our customers and if they are not able to operate their business in a sustainable and profitable business environment then none of us can accomplish our goals. Clark explains, “The grass-root lobbying efforts made by AED members had positive effects on DC legislators and brought tax issues (Sec 179 limit increase, Bonus Depreciation, like-kind replacement, inventory costing such as LIFO vs FIFO,

From left are Ben Yates of AED, Rep Tonko, Wayne Clark of Milton, Gib Gagnon of Milton, Jerry Leary, Pete Bardunias of the Chamber of Southern Saratoga, Chris Geel of Milton.

Ex-IM bank, Highway Bill, HTF funding, etc.) to their attention and offered explanation about what the effects are. We need to join the trade organizations in doing the same.” Ben Yates, AED’s Eastern Regional Manager, who was also present for the congressional visit stated that these meetings are important to our members because it gives owners and executives a

chance to speak to their representatives on issues that are important. “All of these topics have a direct effect on the construction industry and the equipment dealers that serve and supply it.” Yates said. “Construction firms need to have planned work in order to invest in new equipment. Without federal investment in infrastructure, growth and stability is severely impaired.”

Don’t Miss It Mark Your Calendar For details and to register, visit the AED online store at aednet.org or call 800-388-0650. April 27-29 2016 Financial Symposium Loews Hotel, New Orleans, La. June 8-9 Washington Fly-In Washington, D.C. August 23-26 Leadership Conference Las Vegas, Nevada

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

September 14-16 Executive Forum Chicago, Ill. October 27 Ottawa Briefing Ottawa, Ontario

Mark your calendars and save the dates!

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>> REGIONAL REPORT

KRISTIN CROOKS

You Can Make A Difference In The Field The industry’s workforce development initiatives need everyone to get on board. Technical training has been a focal point for AED members nationwide. Texas is no exception to the industry wide shortage of technical traning. Members in San Antonio previously started Your company’s working to get something accomplished locally, ROMCO, Holt CAT and Closner Equipment got tax-deductible involved with a career abd technical program donation will go through St. Phillips College in hopes of filling the void. While this program ended up not being towards accrediting successful, the effort and unity that the dealers demonstrated is a solid foundation to build on. two -year They are still on the hunt for a local school that construction would be ripe for an equipment program that could eventually become AED accredited. equipment San Antonio’s neighbors to the north, in technology Dallas, might be 274 miles away, but the major issues they experience remain the same. The programs for Dallas group is in desperate need for a local the construction technical program to partner with. There are two schools in the area that they would like to take a equipment better look at: Texas State Technical College and distribution Cedar Valley College. They hope to reinstate their local AED group and focus on a school. Vermeer industry. Texas Louisiana, Bane Machinery, Bobcat of Dallas, Darr JCB and S & H Equipment all see the value and need to get a program off the ground quickly. Going forward, AED is looking to set up a dealer meeting with both of the schools to discuss the accreditation process. This also will be a great way to revitalize the Dallas local group that our members would like to see get back on its feet. AED’s incoming chairman, Whit Perryman of Vermeer Texas-Louisiana, hosted his annual barbecue in October. Despite the rain, a great time was had by all. Congressman Pete Sessions joined in on the fun and made sure to personally interact with each and every person in attendance. With the highway bill in such sharp focus, interactions with members of Congress are Top: Congressman Pete Sessions with AED’s South Central critical for our industry. This is Regional Manager, Kristin Crooks. Above: AED Branch Manager a great way for AED members to Seminar, Presenter George Russell. get involved with public policy and push issues into focus that are

impacting their business. In November, the branch manager seminar was held San Antonio. This is a seminar that is designed to address skill sets, processes, techniques and time management skills to become a top performing AED’s South Central Regional Manager, Kristin Crooks, with Brian branch manager. and Hilary Grittner of Vermeer-TexWe are proud to as Louisiana. announce that this will become an annual event for the Association. George Russell took over 20 attendees through a stimulating, two day, hands-on training course. One of AED’s newest dealer members was in attendance and they were exceptionally happy with the course. Tejas Equipment joined AED in September this year and after a great experience, they plan to be involved in more events in the near future. President and CEO Matt Musgrave expressed how enthusiastic his employees were upon coming back from the conference. He said they were very motivated to get back to work and implement everything that they learned over the two days and they really liked the fact that there were dealerships of all sizes at the conference. They said it was nice to see that they had very similar problems and could compare notes and get some fresh ideas for how to solve their problems. You can help support local workforce development initiatives, like those in Texas, by making a donation to the AED Foundation – now celebrating its 25th anniversary. Your company’s tax-deductible donation will go towards accrediting two year construction equipment technology programs, generating awareness about careers in the industry and the development of continuing education programs – such as the branch manager seminar – for the construction equipment distribution industry. This year, donors who contribute $2,000 are given access to all 2015 webinars. Contact your AED regional manager for more ways you can get involved today.

KRISTIN CROOKS is AED’s South Central regional manager. Her region consists of Texas, Oklahoma, Louisiana, Mississippi and Arkansas. She can be reached at 630-465-6647 or at kcrooks@aednet.org. 16 | www.cedmag.com | Construction Equipment Distribution | January 2016

>> INDUSTRY NEWS

Bobcat Awards $4,000 In Grants To Support Stem Programs Bobcat Co. recently donated six grants totaling $4,000 to middle and high school classrooms in North Dakota and Minnesota to support science, technology, engineering and math (STEM) programs. This year’s Doosan Discovery Grants award winners were Simle Middle School and Cathedral School in Bismarck, North Dakota; Liberty Middle School in West Fargo, North Dakota; Milnor Public School in Milnor, North Dakota; and the Litchfield Public Schools in Litchfield, Minnesota. “Bobcat Co. and Doosan are proud to continue our support of STEM-related programs by providing support at all educational levels,” Rich Goldsbury, president of Bobcat Co. and Doosan in North America, said. “STEM areas are vital to the future of our company and to the communities where we do business.” The schools were chosen from an application process. Winning schools will use the funds on projects like designing rain barrels for a school garden and building circuits to transfer sound and energy. Bobcat’s grant

program is part of an increasing national focus on increasing education in the STEM fields, which have been linked to national competitiveness and in-demand career fields.

Andringa Legacy Continues at Vermeer With New CEO Jason Andriga took over the family business in the beginning of November as the Vermeer Corp.’s next CEO. Andriga joined the company since 2005, after leaving a career in aeronautics that included time with NASA’s Jet Propulsion Laboratory. Before assuming the CEO role, he was president and chief operating officer. He will retain his duties as president. “I’m excited, honored and humbled to have the opportunity to continue my family’s legacy of leadership at Vermeer into the third generation,” Andringa said. “We will continue to fulfill our promise to our customers by capitalizing on our strengths -innovative, high-quality products; entrepreneurial dealers; and the diligent practice of continuous

improvement while continuing to create opportunities for growth with today’s fast-moving customer expectations in mind.” Andriga replaces his mother, outgoing CEO Mary Andringa, who will stay with the company as chair of the board. “It’s been a great honor and privilege to be CEO,” Mary Andringa said. “I am confident in Jason and the entire team who will continue the work that’s been happening here for the last 68 years as they lead this company into a bright future.” Vermeer is a designer and manufacturer of heavy duty equipment for agriculture, utilities, landscaping and other industries.

Bobcat is a North Dakota-based subsidiary of Doosan Infracore Co. Ltd., specializing in the manufacture of compact equipment for a variety of industries.

BigRentz To Outfit Products with SolarTrak GPS Systems Online equipment renter BigRentz will partner with Solar Technology Inc. to provide SolarTrak GPS tracking and monitoring systems to fleet managers at over 7,000 construction equipment yards across the country. “Partnering with SolarTech is the first step in bringing industry-changing technology to equipment rental,” BigRentz co-founder and CEO Dallas Imbimbo said. “We believe this integration is a perfect fit for our network because it offers our suppliers a state-of-theart way to manage their fleet as business with BigRentz increases their rentals.” In addition to providing real-time locations for equipment, the new technology features a variety of other metrics yard managers can track from their desks or on their smartphones. They can track engine hours to help with billing and maintenance, establish product boundaries using geofencing, and monitor battery voltage. Both companies expect the consolidated monitoring methods will streamline the time-consuming management of constantly shifting inventories that’s inherent to the equipment rental business. “Solar Technology is excited to partner with BigRentz, providing them our efficiency boosting technology to better serve their customers and supplier partners,” Ed O’Donnell, SolarTrak’s vice president of sales and business development,said. “The SolarTrak solution will allow the many BigRentz supplier partners across the country to more effectively manage their fleets of equipment while increasing their business opportunities from BigRentz.” January 2016 | Construction Equipment Distribution | www.cedmag.com | 17

>> INDUSTRY NEWS

Terex Aerial Work Platforms Announces New Facility Terex Aerial Work Platforms (AWP), the leading global manufacturer of Genie® aerial lifts, will open the doors to its new Redmond, Wash. facility in December. Already located in Redmond, the manufacturer will consolidate buildings to provide more than 100,000 sq ft of work space for its 400+ team members. This move extends the deep history of the Genie team in the Northwest, as the company was started in Kirkland in 1966. “Bringing our extended team from multiple buildings into a single location has been a long-term goal for me and I look forward to finally seeing us together,” said Matt Fearon, President, Terex AWP. “This is an opportunity to work in closer proximity, improve communications and increase the speed with which we serve our customers.”

The new building will also serve as a focal point for visiting customers featuring a pictorial Genie history timeline, which coincides with the brand’s 50th anniversary in 2016. The

building will also house a guest lounge, a glass showroom filled with a variety of Genie equipment, a training room and an auditorium. The transition will take place

in series of three moves, during December. All contact information will remain the same, except for the new address which will be 6464 185th Ave NE, Redmond, Wash., 98052.

New John Deere Worksight Fuel Advantage Program Designed to Improve Operational Efficiency John Deere is building upon its suite of technology solutions and leveraging dealers’ consultation capabilities with the introduction of the John Deere WorkSight™ Fuel Advantage program. Eligible on 47 pieces of construction equipment, the program features fuel consumption commitments, quarterly reports designed to help contractors improve efficiency, and an incentive to utilize the John Deere dealer as a consultative partner. “John Deere WorkSight is about bringing together machines, technology, and John Deere dealers to make the contractor’s job easier,” said Liz Quinn, product marketing manager, John Deere WorkSight. “The launch of the Fuel Advantage program not only provides assured fuel consumption targets, but rewards our customers for meeting with their dealer. It’s about providing our customers confidence and peace of mind with their fuel efficiency.” Enrolled machines will earn a credit of $1 USD/ $1 CAD per gallon/liter above target if the machine’s average annual fuel consumption exceeds the program’s target fuel consumption level. Credits, if earned, will be provided at the end of the year for use at a local John Deere construction dealership. Another key component of the program is the ability to use a John Deere dealer as a consultant. Utilizing the JDLink™ machine monitoring system, quarterly reports will be emailed to enrolled customers. Dealers and customers are then encouraged to sit down together to review the telematics data and recommendations included in the reports, and look for trends, opportunities and insights to improve efficiency in the future. When contractors discuss the first report with their dealer within 60 days of receiving it, they will receive a code redeemable online for a $100 USD/ CAD personal fuel card from the participating fuel retailer of their choice. “We want to help contractors find even more ways to save money,” added Quinn. “Continual dialogue with their dealer will give contractors a better understanding of their equipment, fuel consumption, and John Deere WorkSight machine optimization capabilities. It’s a win-win.” Eligible machines purchased between Nov. 1, 2015 and Aug. 31, 2016 can be enrolled in the John Deere WorkSight Fuel Advantage. Machines are eligible for program benefits for three years or 5,000 hours from settlement. For additional information on WorkSight, visit www.johndeere.com/fueladvantage or contact your local John Deere dealer. 18 | www.cedmag.com | Construction Equipment Distribution | January 2016

>> INDUSTRY NEWS

Equipment Rental Industry 5-Year Forecast Sees Even Growth The American Rental Association (ARA) latest forecast calls for equipment rental industry revenue growth in the United States of 6.7 percent in 2016 and 2017, 6.2 percent in 2018 and 5.8 percent in 2019 to reach $48.7 billion. The growth pace is slightly more moderate than the previous two years, but the industry’s progress is consistently positive regardless of changes in oil and gas, construction and other segments equipment rental companies serve. In Canada, according to the ARA Rental Market Monitor, “even with the modest outlook for construction markets, construction and industrial equipment and general tool revenues are expected

to grow at CAGRs of 4.7 percent and 4.3 percent, respectively, through 2019. Party and event rental is expected to grow at a CAGR of 3.6 percent, benefitting from increases in overall consumer spending, as well as growth in consumer expenditures on services. Total rental revenue is projected to grow at a CAGR of 4.6 percent over the 2015-19 period.” For more information on this topic, please visits ARA’s website: www.ARArental.org.

Trowel Challenge Slated for February at World of Concrete Wacker Neuson will hold its eighth annual Trowel Challenge at February’s World of Concrete exhibit in Las Vegas. Wacker Neuson will erect an obstacle course on a 1,750-square-foot concrete slab that competitors must navigate effectively and efficiently using a ride-on trowel. “The intent of the trowel challenge has always been to test the operator’s troweling skills,” said Matt Basky, concrete product solution specialist for Wacker Neuson.

“This year we have reworked the course to slow the speeds down, but emphasize precision finishing skills using an 8-foot mechanical steer ride-on trowel.” The competition usually draws hundreds of competitors and thousands of onlookers. The qualifying rounds will be held at Wacker Neuson’s exhibit booth during the exhibit’s opening days, with a final round for the top 10 contenders on Feb. 4. The official ride-on vehicle is a CRT 48. It features a torsion assist steering system,

rigid frame, ergonomic twin level controls, and the highest blade speeds in its class. The challenge winner will win a customized version of the CRT 48 complete with a special Vanguard BIG BLOCK V-twin engine. The World of Concrete is an international showcase of innovation and information for the concrete and masonry industries. The 2016 event will run from Feb. 2-5 at the Las Vegas Convention Center.

January 2016 | Construction Equipment Distribution | www.cedmag.com | 19

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SANY America Selects Northpoint Commercial Finance To Provide Floorplan Financing SANY America (SANY), a leading global manufacturer of construction machinery and equipment, has chosen Northpoint Commercial Finance (Northpoint) as the exclusive provider of inventory financing for its fast-growing network of North American dealers. SANY America manufactures, sells and supports construction and material-handling equipment, including crawler cranes, rough-terrain cranes, crawler excavators, container reach stackers and empty-container handlers. The company handles SANY brand equipment sales and support in the United States, Canada, Mexico and Central America. Parent company SANY Group is the world’s sixth largest manufacturer of construction machinery and equipment. Manufacturer-dealer relationships are strengthened by inventory financing, also referred to as floorplan financing, as it helps dealers to maximize profits and positions the dealers for growth. Dealers benefit by obtaining enhanced credit availability and flexible financing terms and manufacturers benefit from increased sales opportunities. “The Northpoint inventory financing program will enable our dealer network to stock and market a wide variety of SANY products to help them grow their businesses,” said Eric Teague, Senior Vice President of SANY America. “SANY provides financing solutions to make it easier for dealers and their customers to get the SANY equipment they need. The solutions now include Northpoint’s floorplan financing for our dealer network.” Northpoint’s leadership team has a long history of construction and heavy equipment industry partnerships,” said John Durnien, SVP of Northpoint Commercial Finance. “We are pleased to have been chosen by SANY and look forward to providing an entrepreneurial approach and flexible financing solutions to help their dealer network grow and succeed.”

>> PRODUCT PREVIEW

Bobcat Unveils New Tier 4 Compliant Track Loader Bobcat is touting its new T740 compact track loader, which uses special technology to eliminate the need for a diesel particulate filter, selective catalytic reduction, and diesel exhaust fluid. The new loader comes with an ultra-low particulate combustion engine with a combustion chamber designed to reduce the amount of particulate matter created during combustion. The exhaust particles that are released are turned into water and carbon dioxide as soon as they come in contact with the machine’s diesel oxidation catalyst. These components together make the 74 hp T740 track loader Tier 4 compliant. The T740 also features improved visibility with through a cab-forward design that brings operators closer to the action. It’s been redesigned for easy and efficient maintenance through such features as auxiliary quick couplers mounted directly to the front plate of the lift arm for solid mounting, hoses routed through the loader arms for better protection, and a guard bar extending in the front of the coupler for added protection. Bobcat said their new loader is suitable for a variety of applications in construction, landscaping, agriculture and grounds maintenance and is compatible with more than 60 Bobcat attachments.

New Cat® 325F Brings Right Size, Performance To Close-Quarters Work

Takeuchi Unveils New Ts80 Skid Steer Loaders Japanese equipment maker Takeuchi introduced two new models of its TS80 skid steer loaders Monday. The TS80R2 and TS80V2 offer comparable, but slightly different features tuned to different applications. The R2 has rated operating capacity of 2,825 pounds, a bucket breakout force of 5,845 pounds and a lift arm force of 7,080 pounds. The V2 is about 1,000 pounds heavier and has slightly more breakout force, but less lift arm force. The R2 and V2 have max hinge pin heights of 10 feet, 5 inches and 10 feet, 10 inches, respectively. “We are very excited and proud to introduce the new TS80 skid steers to the market because of

the machines’ excellent operating capacity and hydraulic performance — the features that make them so powerful and reliable out on the jobsite,” Takeuchi-U.S. Product Manager David Steger said. “Uptime has been improved with these machines, and daily maintenance points like fluid-level checks and greasing access have been improved and simplified as well. These are great machines that will not only meet the operator’s needs, but surpass them.” New features on both models include a lower entry and exit threshold for the operator’s station, high-flow auxiliary hydraulics, and options such as ride control and bucket positioning.

The new mid-size Cat® 325F is a reliable, durable, highly efficient compact radius excavator built for all your close-quarters work. The machine features a powerful C4.4 ACERT U.S. EPA Tier 4 Final engine that’s miserly on fuel paired with a state-of-the-art hydraulic system that’s responsive to your every command. Each pull of the “sticks” will feel like a natural extension of yourself, putting you in place to literally move tons of material all day long with tremendous speed, precision, and confidence. Compared with its Cat 321D Tier 3 predecessor, the 325F can run on biodiesel up to B20. Based on engineering validation, it will consume up to 22 percent less diesel fuel than its predecessor, with no loss of swing torque and bucket and stick forces. With a maximum lifting capacity of 27, 000 pounds (12 650 kg) at 15 feet over the front at ground level, the 325F exceeds its predecessor model’s capacity by 8 percent. It features proven electronic, fuel, air, and

aftertreatment components like a maintenance-free diesel particulate filter, and it has isochronous control that automatically manages pump and engine speed for improved fuel efficiency. Boom and stick recirculation valves reduce fuel consumption and speed up cycle times, and a choice of three power modes—high power, standard, and eco—help you more actively manage fuel consumption. A variable-speed fan for less energy consumption and noise, high-ambient cooling capability to work in extreme heat, and altitude capability up to 9,840 feet (3000 m) with no engine de-rating round out the machine’s high-performance attributes.

January 2016 | Construction Equipment Distribution | www.cedmag.com | 21

>> PRODUCT PREVIEW

Wacker Neuson: All Wheel Steer Loader Wacker Neuson is adding to its range of all wheel steer (AWS) wheel loaders, introducing a new model that offers speed, versatility, stability and operator comfort to any job site. The new model, 8085, is particularly beneficial to job sites where continuous travel over longer distances is needed, reducing cycle times and improving productivity. The versatile 8085 is offered with two speed configurations. The standard travel speed of 12.4 miles per hour with 19 gallons per minute auxiliary flow, is an excellent machine to use on a variety of job sites with most standard attachments. The 8085 with the option of high speed/ high flow travels up to 25 miles per hour, the fastest wheel loader in its class. With the high flow auxiliary hydraulics of 30 gallons per minute, the 8085 is ideal for operating high performance attachments such as blowers, brooms and mowers. The high flow edition also features automatic ride control providing a smoother ride by automatically engaging when the machine reaches a certain speed. Also standard on the high-speed/high-flow model are manual travel speed and manual throttle controls designed to more efficiently operate hydraulic attachments

Geith: Ripper Attachment for Excavators

Kobelco Tier 4 Final SK350LC-9E Crawler Excavator The 82,200-lb. SK350LC-9E is powered by a 270-hp HINO Tier 4 Final engine incorporating selective catalytic reduction and self-cleaning diesel particulate filter systems designed to minimize diesel exhaust fluid (DEF) consumption compared to SCR-only systems. Combined with a refined hydraulic system, this solution delivers as much as a 10% reduction in fuel consumption compared to a Tier 3 machine. Provides a digging force of 50,600 lbs., digging depth of 24 ft. 10 in., suggested 0.875– to 2.75-cu.-yd. bucket range and swing speed of 10.0 rpm Proprietary intelligent control system ensures smooth engagement and disengagement across all machine functions Standard independent travel feature allows the unit to travel and lift simultaneously without loss of power or speed

Ergonomically designed, spacious, climate-controlled cab with centralized controls, easy-to-read instrumentation, onboard self-diagnostics, a standard rear-view camera with LCD monitor and seven-way adjustable suspension seat Sturdy undercarriage with heavy-duty track guides and rollers and a thick base plate and grousers Self-lubricating bushings at the attachment pins and abrasin-resistant bushings near the bucket

Designed for use with excavators from 4 to 80 tons, the ripper penetrates and scores tough, hard and frozen ground. Four models offer weights from 320 to 3,857 lbs., shank thicknesses from 3.5 to 6.3 in. and approximate work depths of 26 to 62 in. Standard replaceable tooth and wear shroud, reinforcing gussets and side wear protection plates Heavy-duty steel shank increases ripping power, applying all of the power of the excavator at one point for maximum ripping efficiency Provides a cost-effective and low-maintenance alternative to rock breaking, and enables rock to be extracted in areas where blasting is prohibited.

Liebherr PR 746 Litronic and PR 756 Litronic Crawler Tractors Liebherr is expanding the Generation 6 crawler tractor program with the PR 746 Litronic and PR 756 Litronic models. Both models are powered by Tier 4 Final diesel engines and incorporate the company’s in-house developed technology. The 252-hp PR 746 Litronic offers an operating weight of 62,370 to 67,900 lbs., and the 340-hp PR 756 weighs in at 84,430 to 90,720 lbs. The main components of the new crawler tractors come from Liebherr’s own production facility. Among these are the 22 | www.cedmag.com | Construction Equipment Distribution | January 2016

six-cylinder Tier 4 Final-compliant diesel engine, the common rail fuel injection system and the hydraulic and electronic components: • Electronically controlled drive management with integrated ECO function • Proactive power control automatically increases engine performance for a short period to match current demand • Hydrostatic drive with automatic speed and torque adjustment • Standard inch brake pedal and optional three-stage drive joystick • Modernized design with high-visibility cab featuring adjustable drive controls and touch-sensitive system display • Centralized service points for easy service

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PHYSICAL UTILI PHYSICAL UTILIZATION PHYSICAL UTIL

AWP - TELESCOPIC BOOMS − AWP - TELESCOPIC BOOMS − 0.6%



 0.6% -3.6%

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

BACKHOES activity that began in 2012. The− decline 1.7% in November -5.4% for the overall Index was the result of a 10. commercial planning while projects entering planning in the institutional sector increase BACKHOES − activity, 1.7% -5.4%



80% 80% 80% 80% 80% 80% 80% 80% 80% each with 80% 80% There were a total of seven projects entering planning in November, a value that excee 80% 80% 80% 80% 70.7% 80% 80% 80% office build 80% million. For the commercial building sector, the leading projects were a $160 million 80% 80% 70.7% 70% 70% 70% 70.7% 80% 80% 80% 80% 70.7% 65.4% 80% 65.4% Boston MA and a $130 million retail project in Somerville MA.80% For the institutional 70% 70% 70% building sec 70.7% 70% 70% 70% 70.7% 65.4% 70% 65.4% 70% 70% History in N 80% 70.7% 65.4% 80% 65.4% 80% leading projects were a $325 million alteration of the American Museum of Natural 70% 70% 70% 65.4% 70% 70% 70% 65.4% 70.7% 65.4% 70% 70% 70% 65.4% 60% 70.7% 65.4% 60% NY and a $238 million hospital in Chula Vista CA. 65.4% 60% 65.4% 70% 70% 70% November 2015 65.4% 70% 70% 70% 70.7% 60% 60% 65.4% 60% 65.4% 60% 60% 65.4% 60% 65.4% 60% 60% 60% 70% 70% 70% 60% 60% 60% The Dodge Momentum Index fell 3.7% in November to 119.9 (2000=100) from its 60% 60% 60% 65.4% 60% 65.4%I60% 60% Dodge Momentum ndex 50% 50% 50% 60% 60% 60% 014 2015 2013 2014 2015 measure 2011 2013 2014 2015 50%2011 50% 50%2011 60% 60% 50% reading 50% October of 124.5.2012 The Momentum Index is a monthly of60% the first (or 2012 (Year 2000=100) 50% 50% 014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 50% 50% 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 50% 50% 50% 60% 60% 60% 014 2015 2012 2013 2014 2015 50%2011 50%2011 50% 2012 2013 2014 2015 2011 50%2011 50%2011 2015 2012 2013 2014 2015 2012 2013 2014 2015 2011 2012 50% initial) report for nonresidential building projects in planning, which have been shown 014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 Nov-‐15 Oct-‐15 % C hange 2015 2011 2012 2013 2014 2015 50% 50%2011 50%2011 2013 2014 2015 2012 50% 2012 50% SKID STEERS 2013 − FORKLIFTS - HI-REACH 1.0% -4.0% 2015 2011 50%2011 2012 2013 2014− 2015 2011 2012 2013 2014 0.2%2014 2015 1.5% 2015 2011 2012 014 2015 2012 2013 2014 2015 2011 2012 2011 50% construction 50% 50% to lead spending for nonresidential buildings by a full year. Previously, SKID STEERS − 0.2% 1.5% FORKLIFTS HI-REACH − 1.0% -4.0% Dodge Momentum Index 119.9 124.5 -3.7% 80% 2012 85% 2015 2011 85% 2012 2013 2014 2015 2011 2013 2014 2015 2011 2012 80% 85% 85% 80% 85% 85% 85% 80% 85% the85% Index had posted large month-to-month increases in July (+4.6%) and September 77.5% Commercial Building 118.7 132.1 -10.2% 80% 85% 80% 85% 85% 77.5% 85% 80% 85% 77.5% 70% 75% 75% 77.5% 80% 85% 85% Institutional Building 121.1 115.0 5.3% (+4.9%). The loss of momentum seen in October and77.5% again in77.5% November80% is returning 85% 70% 75% 75% 70% 75% 75% 63.7% 85% 77.5% 63.7% 80% 85% 85% 75% 70% 70% 75% 75% 77.5% Source: Dodge Data & Analytics63.7% 75% 63.7% 75% 63.7% 63.7% 77.5% the75% Index to75% a level that’s more consistent with the gentle upward in planning 75% 70% trend 70% 63.7% 65% 63.7% 63.7% 75% 63.7% 77.5% 60% 65% 70% 75% 63.7% 75% 63.7% 65% 70% 63.7% 65% 63.7% 75% 60% 65% 65% 60% activity that began in 2012. The decline in November for the overall Index was the 63.7% 75% 63.7% 75% 70% 60% 60% 65% 65% 63.7% 65% 63.7% 65% November 2015 60% 65% 65% 65% 60% 65% 63.7% 63.7% result slide in commercial planning activity, while projects entering plan50% 60% 65%of a 10.2% 65% 55% 55% Aug2014 2015 / Jul2015 2015 2014 014 2015 2012 2013 2012 / Aug2013 2014 2015 60% 65%2011 65%2011 50% 50%2011 Aug 2015 55% 55% 55% 55% 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 014 2015 2012 increased 2013 by 5.3% 2014 2012& Analytics 2013 at www.construction.com. 2014 2015 2011 60% 65% 65% 50% 50%2011 55%2011 55% 55% ning in the institutional sector For more2015 information, visit Dodge Data 55%2012 014 2015 2012 2013 2014 2015 2015 2012 2013 2014 2015 2012 2013 2014 2015 2011 2012 2012 2013 2014 2015 2011 50%2011 50%2011 55%2011 55%2011 55% 55% 2015 2012 2013 2014 2015 014 2015 2011 2012 2013 2014 2015 50%2011 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 55%2011 55% 2015 2011 55% 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 50% 55% 014 2015 2011 - TELESCOPIC 2012 2013 − 2014 2015 50% 2011 2012 2013 1.7% 2014-5.4%55% 2015 2011 55% AWP BOOMS 0.6% -3.6% BACKHOES − 80% 2012 - WAREHOUSE/INDUSTRIAL 80% 2015 2011 80% 2013 2014 2011 FORKLIFTS 2013 2014 2015 2011 -4.6% 2012 AWP2012 - ARTICULATING BOOMS − 2015 0.1% -2.0% − 0.6% 80% 80% 80% 80% 80% AWP - ARTICULATING BOOMS − 0.1% -2.0% FORKLIFTS - 80% WAREHOUSE/INDUSTRIAL − 0.6% -4.6% 80% 80% 80% 80% 80%Physical utilization is the percentage of fleet cost 80% 80% below show physical utilization by equipment category. 80% 80% The 80% charts 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 67.5% 70% 70% 70% 67.5% 80% 80% 80% 67.0% which is on-rent during a given period. Physical utilization is cost weighted. “On Rent” and “In Fleet” status are deter80% 80% 80% 70% 70% 70% 67.5% 67.5% 67.0% 70% 70% 70.7% 67.5% 67.5% 70% 80% 80% 80% 67.0% 80% 80% 80% 70% 67.5% 70% 67.5% 70% 67.5% 70% 70% 67.5% 67.0% 70% 70.7% 67.0% 70% 70% 70% 70% 67.5% 70% 70% 67.5% 80% 80% 67.0% 70% 70% 70% mined on a nightly basis seven days a week, 365 days a year. A unit is “On Rent” if it is at a job site earning rental revenue. 67.5% 67.5% 70.7% 65.4% 70% 65.4% 80% 67.0% 70% 70% 70% 70% 67.5% 70% 67.5% 67.0% 60% 60% 60% 70.7% 70% 65.4% 65.4% 70% 70% 70% 70% 70% 60% 60% 60% 67.5% 67.5% 67.0% 60% 60% 60% 65.4% 70% 70% 70% 65.4% A unit is “In Fleet” if it is a rental asset owned by the client. Units out for repair and refurbishment are considered “In 70% 70% 67.5% 67.5% 70% 67.0% 60% 60% 60% 70.7% 60% 60% 60% 65.4% 60% 65.4% 60% 60% 60% 60% 60% 60% 60% 60% 70% 70% 70% 60% 60% 60% 60% 60% 60% 65.4%50% 50% 50% Fleet.” 65.4% 60% 50% 50% 60% 60% ### 014 2015 2011 2012 2013 2014 2015 50% 2011 2012 2013 2014 2015 2011 50% 50% 50% 60% 60% 60% 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 50% 50% 50% 60% 60% 60% 60% 60% 60% Source: Rouse Asset Services. Contact Gary McArdle at gmcardle@rouseservices.com, (310) 363-7520 50% 014 2015 2011 2012 2013 2014 2015 2012 2013 2014 2015 2011 50%2011 Aug 201550% / 2011 Jul 201550% 50% 50% 50%2011 50% 2015 2012 / Aug 2013 2014 2015 2012 2013 2014 2015 2012 50%2011 015 Aug 2015 2014 014 2015 2011 2012 2013 2014 2015 50% 50% 50% 2011 2012 2013 2014 2015 2011 4 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 50% 2011 50%2011 50% 60% 60% 2015 2012 2013 2014 2015 50%2011 60% 50% 2012 2013 2014 2015 2011 2012 014 2015 2012 2013 2014 2015 50%2011 2012 2013 2014 2015 2011 4 2015 20112012 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 50% 50% 2015 2011 50% 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 50% 50% 50% 50% 50% 50% 4 2015 2011 2012 2013 2014 2015 50% 50% 50% 2011 2012 2013 2014 2015 2011 014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2014 2015 2011 2012 2013 2014 2015 2011 2012 4 2015 2015 2011 80% 20112012 20122013 2013 2014 2015 2011 2012 2013 2014 2015 2011 70% 80% 80% 70% 80% -3.6% 80% 50% 50% 50% AWP - TELESCOPIC BOOMS − 0.6% SKID STEERS − 0.2% 1.5% FORKLIFTS HI-REACH − 1.0% -4.0% 80% 70% 6% − AWP - SCISSOR LIFTS − -5.4% 0.7% -1.2% GENERATORS 0.7% 2014 -7.1%80% 4 201580% AWP 2011 2012 2013 2014 2015 70% 2011 2012 2013 -7.1% 2015 2011 -BACKHOES SCISSOR LIFTS −1.7% 0.7% -1.2% GENERATORS − 0.7%− 80% 70% 80% 80% 70% 80% 80% 85% 85% 80% 70% 80% 80% 70.2% 80% 80% 80% 70% 80% 70.2% 80% 85% 85% 70% 60% 70% 70.2% 80% 80% 80% 80% 70% 60% 70% 70.2% 85% 80% 85% 80% 77.5% 80% 70% 80% 70.2% 80% 70% 60% 80% 70% 80% 70% 80% 80% 80% 80% 70.2% 70% 60% 70% 80% 85% 85% 77.5% 70% 70.2% 70.7% 80% 60% 80% 70% 80% 52.4% 52.4% 70% 70.2% 60% 52.4%80% 52.4% 70% 75% 75% 80% 77.5% 70% 60% 70% 70% 70.7% 70.7% 70.7% 70% 80% 80% 70% 70% 52.4% 80% 85% 85% 70% 60% 70% 52.4% 52.4% 52.4% 70% 75% 75% 77.5% 70.2% 80% 80% 80% 70.7% 65.4% 70.2% 60% 50% 70% 60% 70.7% 70.7% 60% 52.4% 70% 70% 52.4% 70% 63.7% 63.7% 60% 50% 52.4%70% 52.4% 75% 70% 75% 70% 70% 60% 70% 80% 70.7% 70% 65.4% 70.7% 70% 60% 60% 50% 70% 60% 65.4% 80% 70.7% 70% 52.4% 70% 63.7% 63.7% 60% 50% 60% 52.4% 77.5% 52.4%70% 52.4% 70% 75% 75% 65.4% 70% 70% 60% 70.7% 70.7% 60% 63.7% 50% 70% 60% 65.4% 70% 70% 63.7% 65% 60% 50% 70.7% 60% 65% 60% 65.4% 52.4% 60% 50% 60% 60% 60% 52.4% 60% 52.4% 52.4%70% 65.4% 70% 60% 50% 63.7% 70% 75% 75% 70% 70% 50% 40% 70% 60% 65% 65% 70.7% 70.7% 50% 63.7%50% 50% 40% 60% 60% 60% 65.4% 60% 60% 65.4% 65% 014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 50% 40% 50% 60% 50% 60% 60% 65% 60% 2015 2011 2012 60% 2013 2014 2015 2012 2013 2014 2015 50% 40%2011 50%2011 70% 70% 60% 50% 60% 63.7% 63.7% 2012 60% 60% 60% 50%2011 014 2015 2012 2013 2014 2015 2012 2013 2014 2015 2011 60% 60% 65% 65% 40%2011 50% 50% 65.4% 60% 60% 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 40% 50% 60% 60% 50% 014 2015 2013 2014 2015 50%2011 40%2011 50% 50% 2012 2013 2014 2015 2011 50% 2015 2012 50% 2012 2013 2014 2015 50%2011 55% 40%2011 50% 55% 2012 2013 2014 2015 2011 2012 60% 60% 4 2015 2012 2013 2014 2015 2012 2013 2014 2015 201160% 65%2011 65% 2012 2013 2014 2015 60% 2014 2015 50%2011 50%2011 50%2011 60% 014 2015 2011 2012 2013 2014 2015 2011 2013 2014 2015 2011 50%2011 2015 2011 55% 2012 60% 2013 2014 2015 2011 2012 20132012 20142013 2015 2011 2012 55% 50% 50% 40% 50% 50%2011 4 2015 20112012 50%2011 20122013 20132014 2013 20142015 2014 201550% 2011 20122012 20132013 2014 2015 201150%2011 50% 40% 50% 2012 2015 50% 2014 2015 55% 55% 2011 2011 2012 2013 2014 2015 50% 50% 60% 60% 014 2015 2011 55%2011 2011 2012 2013 2014 2015 2011 2013 2014 2015 2011 4 2015 2012 2013 2014 2015 2012 2013 2014 2015 50%2011 2012 2013 2014 2015 50%2011 50%2011 50%2011 2015 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2012 2013 2014 2015 2011 55% 2011 75% 2011 2012 2013 2014 2015 50% 75% 2011 2011 80% 75% 75% 2011 2012 2015 80% 2014 2015 4 2015 20112012 20122013 20132014 2013 20142015 2014 201550% 2011 2011 20122012 20132013 2014 2015 50% 50% 2011 55% 2013 2014 2015 2011 2012 2013 2014 2015 50% FORKLIFTS 50% 80% 75% 2012 50% 80% 75% 75%-4.0% 75% HI-REACH − 1.0% 50% 55% 68.9% 68.9% 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2014 2015 75% 75% 4 2015 2011 2012 2013 2014 201550% 2011 2011 20122012 20132013 2014 2015 75% 2011 2011 80% 2015 80% 75% 50% 68.9% 68.9% 80% 80% 85% SKID STEERS − 0.2% 1.5% % 80% 80% 80% EXCAVATORS − 3.1% -1.6% WHEEL LOADERS − 2.0% -5.7% 80% 75% 75% EXCAVATORS − 3.1% -1.6% WHEEL LOADERS − 2.0% -5.7% 80% 75% 75% AWP - ARTICULATING BOOMS 0.1% − 67.7% 0.6% -4.6% 2011 80% 2013 2014 − 2015 2011 FORKLIFTS 2012 2013 2014 2015 68.9% 68.9% -2.0% 85% - WAREHOUSE/INDUSTRIAL 80% 80% 80% 67.7% 67.7%80% 70% 65% 2012 80% 70% 65% 65% 67.7% 65% 85% 68.9% 68.9% 80% 85% 80% 75% 75% 80% 75% 77.5% 80% 80% 80% 80% 67.7%80% 67.7% 75% 67.7% 70% 65% 65% 67.7% 70% 65% 65% 85% 80% 77.5% 80% 80% 80% 80% 67.7% 65% 67.7% 65% 67.7% 70% 67.7% 70% 85% 65% 68.9% 68.9% 85% 77.5% 77.5% 65% 70% 77.5% 67.7%80% 67.7% 70% 65% 65% 67.7% 67.7% 70% 75% 65% 65% 70% 70% 70% 70% 67.5% 67.0% 80% 80% 85% 80% 85% 77.5% 77.5% 55% 67.5% 80% 80% 80% 70% 75% 77.5% 60% 55% 70% 70% 70% 70% 60% 55% 55% 67.5% 67.5% 67.0% 63.7% 75% 77.5% 70% 75% 67.7%70% 67.7% 70% 65% 65% 77.5% 67.7% 67.7% 70% 65% 65% 70% 60% 55% 55% 67.5% 60% 55% 55% 70% 70% 70% 67.5% 67.0% 80% 85% 63.7% 77.5% 70% 75% 70% 75% 77.5% 77.5% 55% 55% 60% 55% 67.5%55% 70% 70% 70% 67.5% 70% 60% 65% 63.7% 63.7% 75% 67.0% 70% 60% 60% 60% 55% 60% 75% 55% 55% 60% 60% 60% 70% 63.7% 63.7% 75% 70% 77.5% 77.5% 55% 50% 70% 60% 60% 65% 45% 45% 50% 70% 70% 45% 45% 67.5% 70% 67.5% 67.0% 60% 60% 65% 2015 2012 60% 2012 2013 2014 2015 63.7% 2012 2013 2014 2015 2011 2012 50%2011 63.7% 60% 55% 55% 60% 65% 45%2011 60% 45% 014 2015 2013 2014 2015 2012 2013 2014 2015 2011 60% 50%2011 60% 55% 55% 45%2011 45% 60% 60% 60% 63.7% 70% 75% 65% 2015 2012 60% 2012 2013 2014 2015 2012 2013 2014 2015 2011 2012 50%2011 45%2011 60% 45% 60% 65% 014 2015 2013 2014 2015 2012 2013 2014 2015 2011 60% 50%2011 45%2011 45% 60% 60% 2015 2012 50% 2012 2013 2014 2015 63.7% 50%2011 2012 2013 2014 2015 2011 2012 45%2011 50% 45% 55% 014 2015 2013 2014 2015 50%2011 60% 65% 2012 2013 2014 2015 2011 50% 45%2011 45% 50% 2012 2013 2014 2015 50% 2014 2015 60%2011 65%2011 2015 2012 60% 2013 2014 2015 2011 2012 20132012 20142013 2015 2011 2012 50%2011 55% 014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 60%2011 60% 65% 4 2015 2012 2013 2014 2015 2011 2013 20142014 2015 201150%2011 50%2011 50% 50% 60% 50% 2015 60% 2012 2013 2014 2012 2013 2015 45% 45% 50%2011 80% 80% 50% 55%2011 45% 45% 50% 80% 80% 55% 50% 4 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 201150% 50% 50% 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2015 2011 80%2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2011 80% 80% 2011 2012 50%2012 2013 2014 2015 2012 2013 2014 2015 014 2015 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 60% 65%2011 55% 80% 50% 55% 4 2015 2011 2013 2014 2015 50% 50% 50% 2011 2011 2012 2012 20132013 20142014 2015 201150%2011 2011 2013 2012 2014 2013 2015 2014 2015 2015 80% 80% 2011 80% 2012 2013 2014 2015 80% 201150% 50% 55%2011 4 2015 20112012 2012 2013 2014 2015 2011 2012 2013 2014 2015 55% 80% 80% 2011 50% 2014 2013 2015 2014 55%20112015 50% 2012 2013 2012 2014 2013 20152014 80% 2012 50%2011 2013 80% 50% 50% 2012 2011 2015 2011 70% 2011 70% 2011filings on 2012 2013 2014 67.5%2015UCC 80% 80% 4 201570% 20112012 80%20122013 20132014 20142015 2011 2012 2013BOOMS 2015 2014 2015 -2.0% 70% 2011 67.5% 12 earthmoving units. 80% 80% AWP - ARTICULATING − 0.1% 80% 80% 70% 70% 50% 67.5% 80% 70% 80% 80% FORKLIF 55% 80% 70% 2012 80% 70% 67.5% 2011 80% 2013 2014 2015 2011 2012 2013 2014 2015 70% 70% 67.5% 70% 80% GENERATORS − 80% 80% 70%AWP -80% 70% 67.5% SCISSOR LIFTS −− 0.7% -1.2% 0.7% -7.1% 80% 80% 70% 80% 2.0% FORKLIFTS - WAREHOUSE/INDUSTRIAL 80% 70% -80% Apr - May 80% 80% 70% 70% 67.5% Oct - Nov 0.6% - Dec67.5% - -4.6% Jan80% -70.2% Feb - Mar Jun Aug - 70% Sep - Grand 60% 60% 80% 70% 70% 80% 70% w w w . r oEquipment u80% s e a n a l y t i c s . c o m 70% 67.5% 60% 60% Description Jul 15 67.0% 70% 70% w w w . r o u s e a n a l y t i c s . c o m 67.5% 80% 80% 80% 80% 60% 60%15 67.0% 70% 70% 67.5% 70% 70% 70% 67.5% 70% 60% 70% 80% 70.2% 14 14 14 15 15 15 15 15 15 15 Total 60% 60% 80% 80% 60% 60% 80% 70% 80% 70% 67.5% 70.2% 60% 70% 60% 70% 70% 70% 67.0% 60% 60% 60% 70% 70% 67.5% 67.0% 67.0% 50% 52.4% 70% 70% 70% 67.5% 70% 70.2% 60% 60% 67.0% 60% 70% 50% 52.4% 80% 80% Articulated Dump Trucks 123 107 145 98 14260% 169 150 175 154 162 147 1,695 70%2011 70% 70% 123 50% 67.0% 67.0% 60% 60% 70% 2012 60% 2013 2014 2015 67.5% 2012 50% 50%2011 60% 60% 52.4% 50% 52.4% 70% 70% 67.5% 70% 70% 67.5% 2013 2014 2015 2011 70% 50%2011 50% 67.0% 60% 60% 70.2% 67.0% 67.0% 50%2011 60% 2012 60% 60% 50% 60% 50% 60% 52.4% 2011 2012 2013 2014 2015 2012 52.4% 70% 70% 50%2011 2013 2015 2011 60% 50% Crawler 466 346 2014 46067.5% 472 251 60% 34860% 512 379 433 481 446 50% 402 4,996 60% 2012 67.0% 67.0% 70% 70% 2011Dozers 2012 2013 2014 2015 50% 60% 50% 60% 2011 2012 52.4% 52.4% 2012 2013 2014 2015 50%2011 50% 60%2011 60% 60% 2011 60% 60% 2012 60% 2013 2014 2015 67.5% 2011 2012 50% 60% 70% 70% 50% 50% 50% 67.0% 67.0% 2011 2012 2013 2014 2015 2011 60% 60% 50% 52.4%Loaders 52.4%227 Crawler 13 4 201519 201417 15 50% 2050%201140 25 15 2013 14 33 50%2011 12 60% 60% 60% 50% 2012 60% 50% 2012 2013 2012 2014 2015 50%20112013 60%2011 50% 60% 2015 40% 60% 2014 2012 50%2011 50% 50%2011 50%2011 2011 2012 2013 2014 2015 2011 2012 2013 2014 2012 2013 2014 2015 50%2011 60% 60% 2015 50% 4 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 50% 40% 50% 60% 60% 2011 2012 2013 2015 2012 1,040 201510,543 2011 50%2011 50% 50% 614 Excavators - Crawler, 50% Hydraulic 933 707 988 2014 1,052 871 1,063 2012840 91920142014 727 789 50% 4 2015 20122013 2013 20142015 2015 2011 20132013 2015 50% 50%2011 2012 2014 2015 40% 2011 2012 2013 2014 2015 2012 2013 2014 2015 50% 50% 60%2011 50%2011 60%2011 4 2015 20112012 50%2011 2012 20132014 2013 2014 2015 40% 50%201150%2011 2011 2012 2013 2014 2015 50% 2012 2012 2014 50%2011 50%2011 4 2015 20122013 2013 20142015 2015 2011 201122 2013 2012 31 2013 2014 29 2015 2011 2011 2012 2013 2015 2015 Excavators - 2011 Wheeled, Hydraulic 202014 49 2014 31 13 40% 25 27 2013 272015 14 313 50%2011 50% 50%2011 2012 70% 2013 2014 25 2015 2012 2013 2012 2014 20152014 50% 70%2011 80% 2011 2012 70%20122013 2014 2015 2011 2012 2013 2014 2015 4 2015 2011 2013 2014 2015 2011 2012 2013 2014 2015 80% 50%Excavators 50% 794 AWP -1,372 SCISSOR LIFTS − 0.7% -1.2% 75%201170% 80% 75% Mini 994 1,529 80%1,326 70% 2011 75% 2012 70% 2013 1,0722014769 1,215 2015 1,421 2011 2012 2013 2014 1,41920151,213 1,156 14,280 80% 75% 70% 70% 80% 70.2% 70% 80% 68.9% 75% 80% 75% 60% 60% 70% 121 70.2% 70% Graders 80% Motor 100 78 128 101 97 98 105 109 122 119 97 1,275 68.9% 70% 80% 70% EXCAVATORS − 3.1% -1.6% WHEEL LOADERS − 2.0% -5.7% 80% 75% 75% % GENERATORS − 0.7% -7.1% 70.2% 60% 70% 60% 70% 80% 68.9% 67.7% 65% 67.7% 70% 70% 65% 60% 60% 70.2% 70% 80% 70.2% 70.2% 68.9% 4 52.4% 80% 75% 75% Scrapers Conventional 10 4 12 9 6 6 12 7 15 12 5 102 67.7% 67.7% 70% 65% 65% 60% 70% 60% 52.4% 60% 70% 70.2% 70.2% 70.2% 67.7% 65% 67.7% 65% 50% 70% 60% 50% 52.4% 70% 80% 68.9% 70.2% 60% 70% 70.2% 60% 70% 60% 67.7% 67.7% 70% 65% 65% 50% 60% 50% 52.4% Skid-Steer Loaders 1,180 1,186 1,872 1,414 878 1,005 1,138 1,163 1,101 995 905 866 13,703 70.2% 70.2% 60% 52.4% 70% 50% 60% 60% 55% 55% 50% 60% 67.7% 65% 67.7% 65% 70% 52.4% 70% 52.4% 50% 60% 50% 60% 55% 55% 70.2% 70.2% Tractor 450 355 47152.4% 411 35850% 352 345 432 369 337 314 4,596 50% Loader 60% 402 40% 55% Backhoes 55% 40% 60% 2012 2013 2014 70% 2012 2013 2014 2015 40%2011 50%2011 40%2011 50% 60% 2015 60% 50% 52.4% 60% 60% 55% 55% 50% 40% 50% 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 50% 60% 45% < 80 HP 45% 40%2011 Wheel Loaders 129 158 17352.4% 223 103 50% 13050%2011 170 142 147 2013 118 109 108 1,710 2012 2013 2014 2012 2014 2015 40%2011 40%2011 50% 60% 2015 60% 4 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 50% 55% 55% 45% 45% 40% 50% 2015 50%2011 2011 2011 2012 2013 2014 2012 2014 2015 4 2015 2013 2015 2012596 201320136722015 2014 2015 45%2011 45%201140%2011 50% 716 2013 Wheel Loaders >2012 80 40% HP 2012 83020147502014 1,004 701 518 50% 631 722 569 565 8,274 2015 2012 2014 40%2011 50%2011 50% 60% 4 2015 2011 20122013 2013 2014 2015 2011 2012 2013 2014 2015 2011 45% 45% 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2012 2013 2014 2015 40%2011 50%2011 4 2015 20112012 80%20122013 20132014 20142015 2015 2011 2012 2013 2014 2015 201180%2011 75%5,635 2013 40%2011 50%2011 2012 2013 5,3262014 2015 5,950 2012 2014 5,3052015 50% Grand Total 4,489 6,536 3,812 4,628 5,160 5,737 4,661 4,475 61,714 45% 45% 80% 80% 80% 80% 75% 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 4 2015 2013 2014 2015 2011 2012 2013 2014 2015 68.9% 80%2011 80%201180% 80%2012 75% 40% 50% 68.9% 80% 80% EXCAVATORS 3.1% -1.6% 75% 2011 80% 2012 80% 2013 2014 2015 2011 2012 2013 2014− 2015 68.9% 80% 80% 70% 67.7% 65% 70% 80% 75% 68.9% 80% 70% 70% 80% 67.7% 75% 70% 70% 65% 80% 75% 67.5% 80% 80% 68.9% 68.9% 67.7% 65% 70% Equipment Distribution | January 2016 70% | Construction 70% 70% 24 | www.cedmag.com 80% 75% 67.5% 68.9% 68.9% 68.9% 67.7% 65% 70% 70% WHEEL LOADERS − 2.0% -5.7% 70% 70% 80% 75% 67.5% 68.9% 68.9% 70% 70% 60% 60% 55% 67.7% 65% 67.5% 70% 67.7% 65% 70% 68.9% 68.9% 60% 55% 60% 70% 67.7% 75% 70% 65% w w80% w . r o u 60% s e a n a l y t i60% cs.com 70% 70% 60% 60% 55% 67.5% 60% 60%

>> DATA TRENDS

ROUSE ANALYTICS Dodge Momentum Index Falls in November

Physical Utilization



 is the percentage of fleet cost which  utilization by equipment category. Physical utilization The charts below shows physical is on-rent during a given period. Physical utilization is cost weighted. “On Rent” and “In Fleet” status are determined on a nightly basis 7 days a week, 365 days a year. A unit is “On Rent” if it is at a job site earning rental revenue. A unit is “In Fleet” if it is a rental asset owned by the client. Units out for repair and refurbishment are considered “In Fleet.” ROUSE ANALYTICS 



PHYSICAL UTILIZATION

Physical Utilization of Four  Rental Units Physical Utilization 

ment category. Physical utilization is the percentage of fleet cost which is cost weighted. “On Rent” and “In Fleet” status are determined on a On Rent” if it is at a job site earning rental revenue. A unit is “In Fleet” repair and refurbishment are considered “In Fleet.”



 





The Dirty Dozen -





The charts below shows physical utilization by equipment category. P is on-rent during a given period. Physical utilization is cost weighted nightly basis 7 days a week, 365 days a year. A unit is “On Rent” if it is if it is a rental asset owned by the client. Units out for repair and refurb









>> DATA TRENDS

Source: Equipment Watch, www.equipmentwatch.com

Construction Equipment

EquipmentWatch INDEX TM | October 2015 in Review | Monthly Heavy Equipment

EquipmentWatch INDEX TM | October 2015 in Review | Monthly Heavy Equipment Intelligence

EquipmentWatch INDEX TM | October 2015 in Review | Monthly Heavy Equipment Intelligence www.EquipmentWatch.com January 2016 | Construction Equipment Distribution | www.cedmag.com

www.E

| 25

>> WASHINGTON INSIDER

CHRISTIAN KLEIN

Who Gets What, Why and When Discover the importance of supporting AED’s PAC.

AED PAC is a special account the association uses to help elect congressional candidates who share our policy objectives.

With the 2016 elections looming large you’re going to be hearing a lot more about AED’s Political Action Committee (PAC). AED PAC, which is funded entirely by personal contributions from dealer executives, is a special account the association uses to help elect congressional candidates who share our policy objectives. Support for AED PAC has grown steadily in recent years as more distributors come to understand all the ways – good and bad – federal policy affects the industry. AED members stepped up to the plate in a big way in 2015 to make it another record year for AED PAC. In the months ahead, we’ll be working hard to ensure that positive trajectory continues and make 2015-2016 our most successful election cycle ever. Transparency is a core value for AED PAC. Beyond required Federal Election Commission filings the association regularly publishes the names of contributors as well as lawmakers and candidates who’ve received AED PAC support. It’s with transparency in mind we thought CED readers might appreciate knowing what factors guide AED PAC’s distribution strategy. Strong relationships with AED members. Our most effective working relationships are with members of Congress who have strong, long-standing connections to our members back in their home states or districts. Although we may not hear about a candidate until he or she runs for federal office, most have usually worked their way up the local government ladder and (hopefully) gotten to know our members along the way. In the best-case scenario, that means our local member and the candidate are already on a first name basis before he or she gets to Washington. That’s why when a dealer picks up the phone and asks us to give a candidate a closer look you better believe we pay attention. The AED ImPACt 2016 program – through which our members personally deliver PAC checks to their local members of Congress – is specifically designed to strengthen and reinforce those back-home relationships. Voting record. For Congressional incumbents, the candidate’s voting record is an important factor. To be clear, there’s no quid pro quo. AED PAC doesn’t give lawmakers contributions because they’ve voted one way or another, but the candidate’s

aggregate voting record tells a lot about how well their political philosophy is aligned with AED’s. Every election year AED publishes a voting scorecard for the current Congress. Candidates don’t have to have a 100 percent record on our issues to get AED PAC support (some years, we only have one or two with a perfect score), but it’s unlikely we’re going to invest our members’ hard-earned money to re-elect someone who’s consistently voted against equipment industry priorities. AED also looks at other indicators of policy leanings, including bill sponsorships, speeches and media statements. Committee assignments and seniority. AED focuses its political giving on candidates who are influential on issues that affect equipment markets and dealer costs of doing business. Our priorities are infrastructure, tax, energy, regulation and workforce development. That means you’ll see House Transportation & Infrastructure, Ways & Means, Energy & Commerce and Education & Workforce Committee members on our contributor lists. Likewise with members of the Senate Finance, Environment & Public Works, and Commerce Committees. Seniority and leadership roles are also factors. Political viability and need. We do our absolute best to be good stewards of our members’ investment in AED PAC. We occasionally take risks with excellent candidates in toss-up races, but we don’t support candidates with no chance of winning. Also, we generally like to make contributions a bit later in the election cycle when the political landscape is clearer. Of course, if there’s an incumbent with a great voting record on our issues facing a primary challenge from the extreme wing of his or her party, we’ll often give money as early as possible. It’s often said the politics is about who gets what, why and when. Now you know who gets AED’s political support why and when. If you have ideas about other factors we should be using to make giving decisions or candidates you’d like us to consider, don’t hesitate to drop us a line. Disclaimer: AED PAC accepts contributions only from executives of AED dealer member companies that have given prior solicitation approval in accordance with the Federal Election Campaign Act. To give prior approval or for more information, please contact Eleesha Jackson in AED’s Washington Office at 703-739-9513.

CHRISTIAN KLEIN is AED’s vice president of Government Affairs. He can be reached at caklein@aednet.org and 703-739-9513.

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

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>> AED CANADIAN UPDATE

CODIE TAYLOR

Liberal Government Maps Out Priorities For Infrastructure And Skills Training What are the expectations of the new government?

Key among the government’s priorities is a 10year, multi-billion dollar investment in infrastructure, and the new Minister of Infrastructure and Communities, the Honourable Amarjeet Sohi has a big job ahead of him.

As Canada’s new Liberal government finds its feet, there are high expectations for Prime Minister Justin Trudeau and his Ministers to bring substantial changes on many fronts. While this expectation is true of every newly elected government, the wide array of Liberal campaign promises have Canadians watching to see if they are able to match their words with deeds. This is particularly true for the ambitious plan to spend billions of dollars on new infrastructure projects and for skilled labour training initiatives. As part of the new government’s commitment to increased transparency, Prime Minister Trudeau released the ministerial mandate letters – the documents that outline his expectations and priorities for each Minister and their portfolio. This unprecedented look at government priorities provides Canadian businesses and other stakeholders with the opportunity to match their asks to the government’s agenda. Key among the government’s priorities is a 10-year, multi-billion dollar investment in infrastructure – transit, social, innovative and green - and the new Minister of Infrastructure and Communities, the Honourable Amarjeet Sohi has a big job ahead of him. Signaling how the new government views infrastructure investment, Minister Sohi said this at a recent Canada 2020 conference: We need to expand how we think about infrastructure. In the past, when we thought about funding and investing in infrastructure, we often framed it as paying for roads, bridges, transit, water and sewers. But infrastructure is really about communities, and about people. Infrastructure is about making sure everyone has an affordable place to live. It’s about safe and nurturing places to provide child care. It’s ensuring there are facilities for seniors to live in dignity and comfort. It is about having a shelter for a woman fleeing domestic abuse. And it’s having recreational and cultural facilities where people can gather, learn, play and grow. Minister Sohi’s responsibilities will include investing in major public transit projects, on social infrastructure and on innovative green infrastructure. He will also prioritize amending the Building Canada Fund to be more focused on strategic and

trade enabling infrastructure priorities, including roads, bridges, transportation corridors, ports, and border gateways. A former City Councillor in Edmonton, Sohi was recognized for his dedication to improving the city’s infrastructure and livability. He represented the city on the Canadian Urban Transit Association and is a strong advocate for Light Rail Transit. Minister Sohi will work with Transport Minister Marc Garneau to decide on which projects will be undertaken first. Garneau, a former astronaut and one-time contender for the Liberal leadership will play an important role in assisting Sohi develop and implement an Infrastructure Strategy. Innovative infrastructure projects, such as those in the clean energy and climate resilient infrastructure, including flood mitigation systems and infrastructure to protect against changing weather will also require training people to work in these new jobs. The Honourable MaryAnn Mihychuk, Minister of Employment, Workforce Development and Labour’s mandate letter contains a renewed commitment to establish various programs for job training to meet modern workforce needs. The Liberals have committed to spend $775 million dollars a year on skilled trades funding, including a $500 million injection into provincial job training programs, $200 million on training for workers who cannot receive federal training and $50 million that will specifically go to help aboriginal people improve their skills and job prospects. The Liberal government will invest another $25 million in training facilities, and will work with employers and labour to determine an appropriate apprenticeship ratio for all federal infrastructure projects. This was part of a $2 billion comprehensive employment strategy. Though the Liberal government is still in the early days, the signals they are sending with their cabinet appointees are positive for industry. With the new level of transparency, industry will be able to play an active role in planning and carrying out process of infrastructure spending and training those wishes to enter the trades. The AED is optimistic that the money earmarked for the ambitious projects and skills training strategies throughout the campaign will be spent so that we can play our role in meeting Canada’s infrastructure needs.

CODIE TAYLOR is a senior consultant at Bluesky Strategy Group. She can be reached at codie@blueskystrategygroup.com. Members of the Bluesky Strategy Group contributed to this report. 28 | www.cedmag.com | Construction Equipment Distribution | January 2016

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Hydrema 912HM articulated Dump Truck Load capacity 22.000 LB. Low running costs. 180ยบ load dumping. High quality.

Hydrema US Inc. Phone: (404) 614 1747 www.hydrema.us

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< More about Hydrema

1/30/2015 1:33:25 PM

>> BREAKING GROUND

Hydrema Breaks Ground for New U.S. Headquarters in Georgia

Construction of the future home of Hydrema U.S. Inc. has begun in Cumming, Ga.

Oct. 12 turned out to be a picture perfect day for the staff of Hydrema as the company held a groundbreaking ceremony at the future site of its new U.S. headquarters in Cumming, Ga. A great turnout of local dignitaries and representatives of the architects and subcontractors of this project turned out for the ceremony and an opportunity to welcome Hydrema to the location. Attendees got a feel for the project and had the opportunity to talk to the builders and Hydrema staffers and enjoy a nice lunch with them. The facility will be built on a parcel of land that is approximately 4 acres at 4515 Hemingway Trail in Cumming, Ga. This is the first structure to be built in a proposed 150-acre business park. For maximizing exposure, the facility is being built to face Left to Right: Rory Cunningham, Cunningham & Associates, Dawsonville, Ga.; Cindy J. Mills, Forsyth the major thoroughfare of GA400/U.S.19 in County, Ga., commissioner; Kris Binder, Hydrema U.S.; Pete Amos and Jim Boff, Forsyth County Forsyth County, Ga. Only 10,000 yds.(9,144 m) of commissioners, participate in the groundbreaking. material need to be moved on site while the bulk of the digging will be done to create a temporary retention pond. This first structure will be 13,000-plus sq. ft. (1,207 sq m) facility, which will be phase one of a planned two structure “campus.” Of the square footage, about 10,000 sq. ft. (929 sq m) will be designated as shop and warehouse space with the remainder to be uti-lized as a two-story office space area with mezzanine. Rory Cunningham and the team of Cunningham & Associates based in Dawsonville, Ga., serve as the general contractor for the project. The official start of the structure was at the conclusion of the ground breaking ceremony and Cunningham said that he intends to have the structure ready to hand over the first of July for immediate move in. Cunningham will have about a dozen subs working on various phases of construction. The project has been about a year in the planning stage. At this point, neither Hydrema nor the contractor have encountered any major hurdles or unforeseen chal-lenges with construction of the new facility. Hydrema’s Kris Binder said, “we’ve been really quite happy working with Rory [Cunningham] on this project. Hydrema displays its wheeled excavator line up including an Without his expertise we wouldn’t be here today.” MX18 excavator. Hydrema U.S. will continue to operate from its Alpharetta, Ga., location until Reprinted with permission ©2015 the time the new facility is ready for move in. (This story also can be found on Construction Equipment Guide’s Web site at www.constructionequipment-guide.com.)

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Getting Social with Associated Equipment Distributors Would you like to be featured in our next issue of CED Magazine? It’s easy! Interact and engage with AED on Facebook and Twitter by using the hashtag #AEDGetSocial. We’ll pick our favorites each month and publish them!

#AEDGetSocial The NEW Social Experience For AED Members Rep. Alex Mooney @RepAlexMooney Oct 15 Cross Lanes, WV It was my pleasure to present State Equipment Inc. with the AED Quarter Century Award. @AED_East

Hyundai Construction @hceamericas Oct 7 Hyundai Construction Retweeted AED Thank you @AEDSocial for their great service! :) @caaklein :@aedsocial 2011 Orlando & the guy walking w/ me is the late Tony Blankley, for whom I had enormous admiration. It was my honor to know him.

Accruit 1031 @Accruit Oct 20 AED names PwC and Accruit Preferred Providers of LIke-Kind Exchange Services: https://www.elfaonline. org/News/IndNews/news_report.cfm?id=22189 … via @ ELFAOnline @AEDSocial #equipment AED @AEDSocial Thank you to @hceamericas for their 25 years of AED membership

Lori A Welz @msloriw66 Dec 15 SIgn up and see @CTABSInc at booth 210 and get social with @msloriw66 ECA @EquipCorp Dec 15 ECA Retweeted Equipment Today Good times ahead for the #constructionequipment industry thanks to #FASTAct, according to @AEDSocial. Connect with AED on our new social media platforms: Facebook.com/AEDSocial @aedsocial

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

>> BUSINESS SOCIAL

KRISTINA CISNEROS

10 Benefits of Social Media for Your Business That Skeptics Need to Know Sharing content with thousands of followers at once isn’t the only benefit of social media for business. Small businesses all over the world have been discovering the ways social media can contribute to success and growth in all areas of their companies. However, there are still skeptics who still don’t see or understand the benefits of social media for their business. In this post, we go over 10 benefits of social media for business that will turn skeptics, like your boss (or even yourself!), into believers.

1. Social media is an easy way to learn about your audience

For businesses in any industry, the key to success is knowing your audience. Social media makes this possible, and easier to accomplish than ever. With tools likeFacebook Insights in Hootsuite you can learn the dominant languages spoken among your social media audience, as well as their age

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and gender. This knowledge can help you cater campaigns and product offers to your target audience, which will provide you a better return on investment.

2. Social media helps target audiences more effectively

Geo-targeting is an effective way to send your message out to a specific audience or demographic based on their location. Social networks like Facebook and Twitter have tools that allow you to communicate the right kind of content to your audience. For example, in Hootsuite you can target by ‘Location’, ‘Language’, ‘Age’, ‘Gender’, ‘Relationship status’, ‘Interested in’, and ‘Education’ on Facebook, and ‘Country(s)’ on Twitter. For example, if you want to send out a post to people who speak Spanish, geo-targeting is an easy and effective way to do it.

>> BUSINESS SOCIAL 3. Social media helps find new customers and expand your audience Social networks like Twitter allow small businesses to locate their current customers or seek out potential customers. For example, if you open a new coffee shop in the neighbourhood, you can create a geo search in Hootsuite to locate anyone tweeting about needing a morning cup of joe within your area. After locating those tweeting about coffee, you can start reaching out to them, and invite them to come try a hot bevvy at your new coffee shop.

4. Social media allows you to receive instant feedback from your customers’ perspective

Social media for business gives you instant access to positive or negative feedback, which provides you with valuable insights on the customer perspective. For example, if you launch a new product and share it on social media, you’ll instantly learn what your customers think of it. Another way to gain customer perspective with social media is by learning how they use your product; brands often base new products or services on their customers’ original ideas

5. Improve market intelligence and get ahead of your competitors with social media

With social media monitoring you can gain key information on your competitors, therefore improving your market intelligence. This kind of intel will allow you to make strategic business decisions in order to stay ahead of your competition. For example, you can create search streams in Hootsuite to monitor mentions of your competitor’s name or product. Based on your search results, you can improve your business to offer something your competitors are missing.

6. Social media can help increase website traffic and search ranking

So you built a website for your company, now what? One of the best benefits of social media for business is using it to increase your website traffic. Not only does social media help you direct people to your website, but the more social media shares you receive, the higher your search ranking will be. For example, if every person who follows Hootsuite on Twitter retweets this post, it’s more likely to rank higher in Google’s search engine results page for variations of “social media for business.”

7. Share content easier and faster with social media

In the past, marketers faced the challenge of ensuring their content reaches their customers in

the shortest possible time. With the help of social media, sharing content got easier and faster. When you use social media for business, specifically for sharing content about your business or for content curation, all you need to do is simply share it on your brand’s social network accounts. But keep in mind that getting your customers to share your content with their followers means you need to make sure your social media content aligns to your brand and interests your audience.

8. Social media helps generate leads for one third of the cost

Social media is an easy way to generate leads. For example, Hootsuite’s marketing department was built around content and social platforms, and Twitter ads has allowed us to scale, increase reach, and fuel demand generation. Hootsuite promotes two types of content via Twitter Ads: ungated content (free content requiring no email address for access) and gated content (free content requiring an email). Sharing gated content on social media is a great way for any company to generate leads. Social customer service is the future of customer satisfaction:http://t.co/mvWuVdEKmf Download our free whitepaper to learn more

9. Create meaningful relationships with customers through social media

Social media is great for creating meaningful relationships with your customers. For example, social media allows tourism brands to create dialogue with travellers, therefore creating relationships with customers before, during, and after they have booked a trip with the company. This kind of social media dialogue between brands and customers is something traditional advertising will never achieve.

10. Social media lets you increase brand awareness and reach with little to no budget

Social media for business has allowed companies to increase brand awareness and reach of their brand at little to no cost. The costs associated with these strategies are a lot higher with traditional advertising methods. Recently, marketing departments across companies started hiring community managers to increase brand awareness and reach through social media. Community managers foster relationships with online audiences in different regions. At Hootsuite, we have community managers for each of our three regions: APAC, EMEA, and The Americas. This helps us make sure we keep expanding the reach of our brand to those regions and maintain relationships with key stakeholders.

Kristina Cisneros is an Online Strategist at Hootsuite Media Inc. A SAAS company focusing on building a social media management tool that helps people create meaningful relationships through social media. Twitter: @K_Cisnero LinkedIn: https://ca.linkedin.com/in/kcisnero January 2016 | Construction Equipment Distribution | www.cedmag.com | 33

DEALER

DEVELOPMENT

â&#x20AC;&#x153;The relationship that The Foundation has helped to facilitate with the member dealers and our SUNY Cobleskill Diesel Technology students is exceptional. The department has developed many new dealership contacts through this partnership, which in return helps to keep our coursework relevant and provides job opportunities for students upon graduation. Students leave the program trained on modern technology to be productive technicians in the workforce. It is a win for all parties involved; students, dealers and the college.â&#x20AC;&#x153;

Celebrating 25 Years of Building a Dealer Model for Success P.36 AVTEC Recieves AED Accreditation P.37 Foundation Flashback P.38 Upcoming Professional Development P.39 Building a Dealer Model P.40 2016 Annual Campaign

Douglas Hammond, Department Chair Agricultural Engineering Technology Department State University of New York at Cobleskill (AEDF Accredited college)

F O U N D AT I O N

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

Please visit us in CONDEX Booth 518 -Ad_template.indd 2

5/18/2015 10:09:37 AM

>> DEALER DEVELOPMENT

Diesel/Heavy Equipment Technologies Program at Alaska’s Institute of Technology Receives Re-Accreditation from AED Our congratulations to the Diesel/Heavy Equipment Technologies program at AVTEC – Alaska’s Institute of Technology, Seward, AK upon receiving AED Re-Accreditation for the second time. Having first achieved accreditation in May, 2003, this college program was the fifth to do so. Faculty and staff have worked hard to achieve and maintain this industry distinction, and The AED Foundation is proud to be affiliated with this fine program. The hands-on approach to AVTEC’s Diesel/Heavy Equipment Technologies program helps students learn how to service, maintain, and repair heavy equipment. As most equipment is powered by diesel engines, students will disassemble, measure and reassemble engines to factory specifications. The technology changes in the past few years have led to the use of laptop and dedicated scan tools for diagnosis of electronically controlled engines and systems. Instruction is individualized so that students may progress at their own rate. Construction equipment such as dump trucks, road graders, front-end loaders, back hoes, bulldozers, and a large transport truck are utilized by students developing mechanical skills. AED Accreditation means that college and post-secondary dieselheavy equipment technology programs have met rigorous technical academic program standards as defined in The AED Foundation’s “Standards for Construction Equipment Technology.” Developed and updated regularly via the expertise of volunteer task force members with broad representation from AED member dealers, manufacturers and technical colleges, these standards “address the needs of the equipment industry, as stated by the industry.” AED Accreditation is only conferred after an application process that includes an on-site program visit from AED Evaluation Team Leaders to confirm that all requirements are met. Kent Berklund, Program Department Head, commented on why he pursued and maintains his AED Accreditation. “I was involved with obtaining AVTEC’s Automotive NATEF accreditation and at that time there was a push for obtaining accreditation for all of our programs. As we went in search for an accrediting body we found only two that came close to the type of training we provide. AED had the best overall understanding of the field and really understands this industry. They also have real industry background and backing. Over the years AVTEC students have received some very nice benefits from AED Accreditation. We have received mikeroweWORKS Foundation tools scholarships to pass on to the students, tools have been donated and even a check or two to benefit our programs have come through. But the biggest benefit is the validation of our training and curriculum content by a nationally recognized Industry organization. With this accreditation, it confirms that what we teach, and what we give to the employers as a new employee, is validated by people in the diesel-heavy equipment industry who walk the walk and talk the 36 | www.cedmag.com | Construction Equipment Distribution | January 2016

talk. When prospective students look for training and are looking at student loans and debt, being an AED Accredited school matters. We are the only school in our state that is AED Accredited; this gives our prospective students assurance that our training is relevant, up to date and valid. It also opens the doors with the equipment dealers who know the value of a well-trained ready-for-work new employee.” Again, The AED Foundation congratulates the Diesel/Heavy Equipment Technologies faculty at AVTEC – Alaska’s Institute of Technology.

Kent Berklund

Robert Dunno

Roger Hohl

Troy Hager

Robert Frasher

Dennis Estes

Flashback to 1991 Foundation Flashback ... Previously in CED

As we celebrate the Foundation’s 25th anniversary — here’s a flashback to some of our January 1991 archives to see what was making news.

JANUARY 1991 AED PRESIDENT Illinois Distributor Earl K. Harbough nominated to lead AED in 1991. Harbough, President and general manager of Ditch Witch of Illinois as well as Progressive Leasing Co. and Illini Power Products Co. was nominated to become AED’s 73rd. President.

DID YOU KNOW California “Land of Glitters & Jitters” -- CED took a look at the vast and ever-changing market to uncover its roots and see what the future might hold for CE Dealers and manufacturers.

California voters approved two propositions that were set to pump $18.5 billion into the state’s ailing transportation system over the next 10 years.

California was the “Hot” U.S. marketplace for heavy construction with a 23% increase in 1991.

NEW AED MEMBERS • Utility Line Equipment, Inc. • Road Construction Equipment Company, Inc.

• The Halton Company • American High Reach • Martin Equipment of Illinois, Inc.

• Santa Fe Equipment Co. • H&L Mesabi • Mike’s Inc. • Acorn Equipment Co.

January 2016 | Construction Equipment Distribution | www.cedmag.com | 37

>> DEALER DEVELOPMENT

Upcoming Professional Education Opportunities To Set Your Dealer Team Apart From Others Register your team online today or by phone with your regional manager.

Two simple waysto register: register online by visiting bit.ly/aedevents or register by contacting your regional manager or an AED staff member at 630-574-0650.

Ongoing professional education sets your dealer team apart and equips the front line with knowledge and tools to serve your customers and improve your company’s profitability. To assist with the development of your team, The AED Foundation has a full lineup of both of live and industry-specific training.

2016 Training & Development Seminars: Parts Manager Development SeminarLevel 1 March 15-16, 2016 Chicago, IL

Parts Manager Development SeminarLevel 2 September 27-28, 2016 Dallas, TX

Service Manager Development SeminarLevel 1 March 17-18, 2016 Chicago, IL

Service Manager Development SeminarLevel 2 September 29-30, 2016 Dallas, TX

Rental Manager Seminar May 17-18th, 2016 Las Vegas, NV

Equipment Business War Games (Test Drive) October 19-20, 2016 Philadelphia, PA Branch Manager Seminar November 10-11, 2016 Orlando, FL

Featured February Webinars: Everyone in the Dealership Sells! Maximizing Every Precious Interaction Presented by: Don Buttrey Date: February 11 Team selling is vital to providing total customer satisfaction and developing lifetime customers, and is the primary differentiator to set you apart from the competition! Loyalty is enhanced or destroyed by each interaction with individuals in your dealership. We all sell! Selling is “getting someone else to want to and to do something that we want them to do.” We are all doing that in some form or another every day in our personal lives in addition to how we perform our primary job functions. Introduction to Rental Fleet Financial Management Present by: Larry Kaye Date: February 18

38 | www.cedmag.com | Construction Equipment Distribution | January 2016

>> DEALER DEVELOPMENT

AED Foundation celebrates 25th anniversary! Directed by AED members, The AED Foundation (AEDF) addresses professional education and workforce development in the industry. The Foundation enhances the success of member companies by encouraging continuous learning, providing educational opportunities for today’s employees and improving the availability and quality of equipment industry employees for the future. When you invest in The Foundation, you are supporting the progress The Foundation is making for the construction equipment distribution industry: AEDF accreditation of colleges, workforce research, industry-specific educational opportunities, management certification and more! For 25 years, The AED Foundation has been providing training, recruitment and education for the construction equipment distribution industry. Our goal is to grow and develop employees, which will improve the quality and success of dealerships for the future. Michael Dexter Midwest Regional Manager U.S. & Canada Ph: 630-465-2888 mdexter@aednet.org

Phil Riggs Western Regional Manager U.S. & Canada Ph: 630-465-3622 priggs@aednet.org

Through the support of investors, like you, we will be able to continue to expand and develop industry-specific professional education and workforce development programs. Please support our 25th Anniversary campaign by investing in the success of our industry via The Foundation’s initiatives. • For $2,000 investors can gain access to 2015 webinars for main dealership location for all of 2016. • For $3,000 investors can gain access to 2015 webinars, as well as 100 career brochures with company logo printed on them. Contributions to The AED Foundation are tax deductible to the extent of the law. The AED Foundation is a 501 (c)(3) educational foundation. To invest in the Foundation, please visit bit.ly/investaedf or call your regional manager: Kristin Crooks Ben Yates South Central Regional Manager Eastern Regional Manager Ph: 630-465-6647 Ph: 630-465-4232 kcrooks@aednet.org byates@aednet.org

What Does Your Investment Support? ACCREDITATION PROCESS

WORKFORCE STUDY

The AED Foundation accreditation process ensures that schools meet dealer standards. As a part of the accreditation process, The Foundation works with schools and dealers to assist on-site visits and additional assistance is done through volunteers. The Foundation is currently working to develop an accreditation process for schools in Canada.

The Foundation partnered with the College of William & Mary to do a study on the construction equipment workforce. The survey assesses the respondents’ technical workforce: the current number of technicians, number of open technician positions, technician salary and hiring practices, among other things. The lack of skilled workers presents challenges to many dealers and to the economy as a whole.

NEW! LEARNING MANAGEMENT SYSTEM (LMS)

PREPARES INDUSTRY-SPECIFIC EDUCATION FOR DEALER PROFESSIONALS

The AED Foundation is excited to present a new learning management system (LMS). The LMS will offer AED members access to webinars and self-study courses in an “on-demand” feature. Having all the components online will give users the ability to watch a video or take a course on their schedule.

Continuous education and training within the construction equipment industry is crucial to staying effective and efficient within your work environment. The Foundation creates live education like the Financial/HR Symposium, branch, rental and parts & service manager seminars.

CREATES OPPORTUNITIES FOR DIESEL TECHNICIANS The Foundation aims to provide resources and knowledge to individuals looking to enter the industry as diesel technicians. By promoting and providing information about the benefits of a career as a technician, there will be more awareness and recognition of dealer career opportunities.

PROVIDES NATIONAL STANDARDS FOR DIESEL TECHNICIAN PROGRAMS The standards state requirements for AEDF accreditation. They are an industry statement of what students should have mastered upon graduation from AED accredited colleges. They require that technical schools’ curriculum and courses cover all of the technical areas covered by the standards. They are updated every three years with broad industry representation from dealers, educators and manufacturers. January 2016 | Construction Equipment Distribution | www.cedmag.com | 39

>> DEALER DEVELOPMENT

2016 AED FOUNDATION INVESTORS as of 12/14/2015

INDUSTRY CHAMPION Sentry Insurance Company

PLATINUM PLUS Caterpillar Inc. Komatsu America Corp. Ritchie Bros. Auctioneers Volvo Construction Equipment North America, Inc.

PLATINUM Berry Companies, Inc. Glynn General Corporation Hyundai Construction Equipment Vermeer Texas-Louisiana

GOLD Brandeis Machinery & Supply Co. Ohio CAT Vermeer MidSouth Whayne Supply Company

SILVER Apco Equipment Asphalt Care Equipment & Supply Bejac Corporation Bobcat Corporation The Charles Machine Works

Cummins NPower, LLC EPG Insurance Inc. General Equipment & Supplies, Inc. Groff Tractor & Equipment, Inc. Heavy Machines, Inc.

McCann Industries, Inc. MH Equipment Company Stephenson Equipment Inc. United Group, Industrial Seats Div.

BRONZE AIS Construction Equipment Corp Ajax Tool Works BLS Enterprises Inc. Bierschbach Equipment & Supply C. N. Woods Company, Inc. CAT Financial Diesel Machinery, Inc. Ditch Witch Mid-States Ditch Witch of Oklahoma Gaylord National Resort & Convention Center

Gorman-Rupp Company Hoffman Equipment Co. Indy Equipment IronPlanet J A Riggs Tractor Company The Knapheide Manufacturing Company Liebherr Construction Equipment Co. Linder Industrial Machinery Loews New Orleans Hotel Louisiana Machinery Company

40 | www.cedmag.com | Construction Equipment Distribution | January 2016

Manitou Americas/Gehl Marriott World Center Orlando The Mirage- Las Vegas Meetings & Events USA Obadal, Filler, MacLeod and Klein, PLC Pavement Recyclers The Peabody Hotel Power Equipment Company Rish Equipment Company Roland Machinery Co. Vermeer Mid Atlantic, Inc.

DEBT CAPITAL | SYNDICATIONS | WHOLESALE LEASING | TREASURY SOLUTIONS | RETIREMENT PLANS

Your Bottom Line Is Our Top Priority. Solutions you need from bankers who know your business.

Martin Brown | 214.987.8850 | www.bokfinancial.com

ÂŠ 2016 BOK Financial Equipment Finance, Inc. is a subsidiary of BOK Financial Corporation. Member FDIC. ScreenMachine.indd 2

12/8/2015 10:41:49 AM

>> PEOPLE MANAGEMENT

BRIAN GAREAU

Is It Time To Rebalance Your Business? Determine what a business is really worth and if business finances are accurately managed.

Balance sheets help determine if results and consequences of prior decisions add value or create disadvantages. What if your organization examined behavioral assets and liabilities this same way? .

Balance sheets are considered a critical financial statement in business. They are a great reality check to determine what a business is really worth and if business finances are accurately managed. Balance sheets also help determine if results and consequences of prior decisions add value or create disadvantages. So, what if every month, quarter, or year your organization examined behavioral assets and liabilities this same way – individually and collectively? Is it time to rebalance? Balance is a condition in which different elements are in the ‘correct’ proportion. It’s not realistic to have everything we want - in exactly the right amount - all the time. We also know there are consequences of being ‘imbalanced’ for too long. Consider these simple, everyday choices and balance points: • • • •

Hours awake and hours slept Healthy and unhealthy eating People we spend time with and those we don’t What we buy and what we can afford

Each choice carries with it a natural consequence – sometimes an ‘asset’ and other times a ‘liability’. For example, if a leader pushes the hours he/she is awake too long then the risk of fatigue sets in. Sleep too much and there will be things missed. If a leader spends too much time with only a select few individuals then the risk of wear and tear on other relationships increases. Try to spend time with everyone and the quality of the interaction declines. It’s all about balance. Work is exactly the same way. Leaders must choose wisely - both for themselves and their team members. Sometimes it is very challenging in business to find the right balance between multiple objectives including: •

Financial, customer, and employee wants/ needs • Short-term objectives and sustaining longterm potential • Production output and needed maintenance • Developing talent internally and recruiting expertise externally • Doing it yourself and delegating/empowering others It’s the last item - delegation/empowerment - many of my clients are working on to find a 42 | www.cedmag.com | Construction Equipment Distribution | January 2016

better balance. Let’s look at this skill from three perspectives – trust, over/under used behaviors, and practical check-up techniques. It All Starts With Trust Trust is a strong belief in another person’s abilities, character, and consistency. It’s nearly impossible to effectively delegate and empower others if a leader believes the other individual is not competent, their intentions are more self-focused than mutual, or they are inconsistent. Why take a personal risk? Just do it yourself. The problem is leaders can’t and shouldn’t do everything. And, if they try to make all the ‘important’ decisions that just leaves ‘leftovers’ - simple, routine tasks for others. It’s very important to delegate results not tasks. Also, remember that empowerment is like a threelegged stool. One leg is responsibility – another is accountability – and the final is authority. Too often two of these legs (accountability and authority) are neglected – and become uneven and wobbly compared to the responsibility leg. Imbalance is created. So, inspect your empowerment stool’s three legs by: • Confirming clarity of responsibilities. Do employees/team members clearly understand what is expected by when? Do they have both the ‘know-how’ and the ‘know-why’? • Looking at accountability a different way. High performing organizations are ditching blame, shame, and threats of punitive action. Instead, look at it as three specific behaviors – influencing (pro-actively), taking ownership, and delivering desired results. • Checking out your organization’s approval and sign-off processes. How often do employees have to get permission to do something to get their job done? Are authority levels realistic and efficient? Do they help drive empowerment and accountability as well as reinforce trust? Remember, lack of trust always prevents individuals from consistently giving their best – to an organization, a team, a cause, and/or another person. It also can create short and/or long-term imbalance.

Over/Under Demand and expectations on leaders continues to grow. Leaders are constantly trying to better balance three scarce resources – time, money, and talent. They must effectively weigh options, determine potential ‘value’, prioritize, and allocate resources to execute plans. Too often this decision-making process is viewed as a linear formula – do XXX versus YYY. But, ‘versus’ implies opposed, against, competing, or eliminating one for another. Try substituting the word ‘versus’ with ‘under/ over’ in your vocabulary and thinking. It’s subtle, but ‘under/over’ implies both are necessary and important but needed in a different proportion – rebalanced. Here are some other critical ‘over/ under’ behaviors leaders must continually balance. Both are needed but one set of behaviors may currently be overused and/ or underused. • Giving feedback and getting feedback • Tapping into team member ideas and personally coming up with all the new ideas • Reinforcing teamwork and allowing individual initiatives • Setting deadlines independently and asking for employee input • Reinforcing positive results/behaviors and correcting unacceptable ones • Accepting more projects and asking for help • Sharing decision-making and making all the decisions • Disconnecting temporarily and staying connected to work electronically

•

7/24 Racking up more hours at work and fulfilling personal responsibilities

Now consider some of the consequences of being out of balance: • Fatigue • Loss of effectiveness, efficiency, or both (spread too thin and diluted effort) • Strained relationships (at work and in personal life) • Increased expectation to continue to do even more • A workforce or team that feels undervalued • Delays in taking action as people wait for approvals Life is full of choices – of holding on or letting go. Rebalancing requires change. Two Steps To Get Started So, how does a leader identify potential rebalancing issues and begin the change? One of the first steps is assessing the current state. Here are two simple but potentially powerful exercises. 1. Balance Wheel. Research shows our brain processes visuals 60,000 times faster than text. For this example we will look at communication and four critical factors. First draw a figure where the lines are equal length and intersect. Now label each line segment a unique factor. Next, rate how effective this factor is currently being executed, using the following scale 1-10 (1 = needs a lot of work and 10 = a significant

strength). A value of ‘1’ is on the outside end of the line segment and a value of ‘10’ is where the two lines intersect. Plot each value then connect the dots. Now answer two important balance questions: 1) Will the wheel roll? ; and, 2) How fast? It’s a great way to visualize balance. Different topics can be assessed with any even number of factors. 2. More/Less Inventory. Take a piece of paper and make two columns. Label one column ‘More’ (Underused) and the other ‘Less’ (Overused). Now, write down as many things you can think of that you want or need to do ‘More’ of – to be in better balance. Then, next to each item write the opposite in the ‘Less’ column. Finally, pick two ‘More’ items from your list that are realistic and needed right now. Put a daily reminder on your I-Phone or computer calendar to help keep you focused each day on these two items. Here are a couple of examples in the area of delegation/empowerment: • More (Planning work for others to do) and Less (Doing the work of others) • More (Believing in others) and Less (Doubting others capabilities) • More (Checking in) and Less (Checking up) Author Jana Kingsford wrote “balance is not something you find – it’s something you create.” A great way to create better balance is to raise awareness about the importance of it in your organization and assess what behavioral assets and liabilities currently exist. The key to keeping balance is to know when it’s lost. So, how’s your balance?

Consultant and author BRIAN GAREAU specializes in strategic, tactical, and practical solutions to engage and accelerate high performance. To learn about Brian’s services and find more articles and resources visit: www.BrianGareauInc.com. January 2016 | Construction Equipment Distribution | www.cedmag.com | 43

>> EQUIPMENT WATCH INTELLIGENCE

Weekly Rental Rates Distribution Shows Clustering Among Top Categories Every quarter, we at EquipmentWatch research, calculate, and share current market rental rates through our Rental Rates product. Those rental rates are very specific and broken down by equipment subtypes and three rate categories of daily, weekly, and monthly rates. However, we rarely get the opportunity to analyze this data on a broad level. Thus our excitement to present this distribution of equipment rental rates for the top 15 most-reported types of equipment. On the horizontal axis of this diagram, we list each equipment type in alphabetical order. On the vertical access are rental buckets, ranging from $250 or less to $2501 or more per week. Each grid value represents the number of equipment assets reported in the first quarter. We see a very interesting spread looking at the data from the top-down like this. Lift trucks, for example, show a clear delineation between use cases. While Telescoping Boom Rough Terrain Lift Trucks do not typically rent for less than $750 per week, standard-wheeled lift trucks like I.C. Pneumatic Tire Lift Trucks, I.C. Cushion Tire Lift Trucks, and Cushion Tire Sit-Down Rider Electric Lift Trucks cluster below $750 per week. This difference may be accounted for in the average prices of the equipment, since rough terrain lift trucks are much more expensive to purchase than other lift trucks. Other equipment types, like excavators, respond to size and weight differences. Crawler Mounted Compact Excavators rent for less than $1000 per week, while Hydraulic Excavators with the same mounting are rarely found for less than $1250 per week. Compactors tend to rent on the more expensive side, although some tandem vibratory compactors rent for less than $750 per week. An interesting trend stands out among rental rates mapped in this matrix. Half of these equipment categories have a clear breakpoint in weekly rental rates between FOR DECISION MAKERS $1000 and $1500 per week, with CONTRACTOR: Know your reported rental rates below needs and what equipment can and above this meet them; minor differences window. While in make, model, or size may a more rigorous exert a substantial influence on investigation weekly rental rates. would be required to

KEY TAKEAWAYS

44 | www.cedmag.com | Construction Equipment Distribution | January 2016

answer why this occurs, we postulate that it may be a result of equipment age or size. If that is the case, renters have determined that the cost of ownership for substantially larger equipment warrants a higher increase in rental rates or those renters looking for larger equipment exhibit much lower sensitivity to rental rates. Rental rates vary significantly by equipment, age, size, and region. However, as this analysis shows, certain clustering trends emerge in all of the most popular pieces of equipment rental from the first quarter of 2015. Sam Giffin Industry Analyst EquipmentWatch.com

>> EQUIPMENT WATCH INTELLIGENCE

Top 5 Least Expensive Cities to Own Equipment On March 24th 2015, EquipmentWatch revealed the Top 5 Most Expensive Cities to Own Equipment FOR DECISION MAKERS which identified areas of the country where the ownership costs of equipment CONTRACTOR: Southern were as much as 34% above the national cities with low per capita average. On the opposite end of the income, warm weather and spectrum, the Top 5 Least Expensive little precipitation are less Cities to Own Equipment identifies expensive to own equipment those areas where ownership costs are most affordable. than other parts of the country. Several factors are taken into account when determining ownership costs of heavy equipment . One of those factors is per capita income which reflects the economics of a city and state. The economics of a particular area can have a direct impact on factors like local mechanics wage, sales tax, and freight which can affect ownership costs as well as operating costs. However, the most important factor in regional variation is the climate. Maximum and minimum temperatures and precipitation are taken into consideration due to its effect on the average annual use hours. Extreme temperatures and precipitation shorten a working season which means ownership rates will be higher in order to recover fixed costs. Areas with volatile Elise Gregory climates tend to have more downtime for Senior Industry Analyst both equipment and workers. EquipmentWatch.com

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>> NEW MEMBER PROFILE

Tejas Equipment employees, from left, Brandon Treforo, Chris Musgrove, Jessica York Correa, Tejas Equipment owner Matt Musgrove, Pete Riojas, Amy Taylor and Sam Erwin show off a new fleet of Wacker Neuson equipment.

One-Stop Small Rental Equipment Shop Morphs Into A Multi-Location Rental, Sales Operation New AED member, Tejas Equipment, provides a deeper look into their transformation.

What began as a small, one-stop, small rental equipment shop nestled in a 6,000 square-foot building in San Antonio, has morphed into an equipment rental and sales operation that now operates several locations in Central and South Texas. “When I was young, I would leave school and I’d walk over there and work,” said Tejas Equipment owner Matt Musgrove of his father’s business that employed less than a dozen workers back when it opened in 1975. The business began as Taylor Rental, located at 1221 N. 23rd St., McAllen, and catered to both homeowners and contractors. “I wanted this motorcycle … so I worked for a nice one,” Musgrove recalled of his time spent working beside his father. “Then, I wanted the Mustang – not just any Mustang – but a GTO. I was always driven to not settle.” Musgrove’s philosophy to never settle helped him propel his business to a conglomerate of six locations, a $25 million fleet and $13 million in annual revenue. Tejas Equipment, as it is now know, has locations in San Antonio North, San Antonio South, Brownsville, 46 | www.cedmag.com | Construction Equipment Distribution | January 2016

Edinburg, Harlingen and McAllen – a facility located across the street from his father’s original store. “I saw a business opportunity,” Musgrove said of the ongoing expansion. “You have to challenge yourself to find that new avenue of growth every year.” But while Musgrove left his father to attend college at Texas State University, he said he always had plans of returning home to take over the family business. “All I have are sisters, so there wasn’t much competition there,” Musgrove chuckled. After returning from college in the late 1990s, Musgrove took the helm and began opening several branches of Tejas Equipment, he said. He also changed the companies’ name to Tejas Equipment, a name that not only served the Texas community well but appealed to the area’s large local Hispanic population, he said. “Tejas is Texas in Spanish,” he said. While growing the business, Musgrove delved into sales as his fleet expanded. Musgrove began to sell some of his inventory and, by doing

>> NEW MEMBER PROFILE

The original Tejas McAllen branch pictured in the late 70s or early 80s provided small rental equipment to consumers.

Mark and Martha Musgrove, Matt Musgrove’s parents, attend the 1978 Taylor Rental convention. Far right: Tejas Equipment machinery at work.

so, was also able to liquidate some of the older equipment thus cutting costs. He began selling the used equipment to contractors, builders and others who needed to purchase equipment at a reasonable rate. “Let’s say you have a forklift that is four to five years old,” Musgrove said. “Servicing it will cost more than it’s worth. Somebody out there needs one, so why not sell it.” Musgrove eventually negotiated a deal with Wacker Neuson to sell new equipment. James Fierros, with RMJ Construction Services of Devine Texas, has been renting and purchasing equipment from Tejas Equipment for five years and said he’s extremely pleased with the company’s service. “These guys have actually taken the cake,” said Fierros of the employees’ customer service, communication and hands-on approach to customers. “It’s a great company,” Fierros said. He initially stopped into a Tejas Equipment store in San Antonio five years ago because it was convenient. Today, Fierros hasn’t looked back. He said he has rented equipment, such as excavators, but was actually surprised and pleased when he first learned he could purchase equipment from Tejas Equipment.

He said he enjoys the flexibility of being able to do both. Fierros said he only works with Tejas Equipment even if a similar business is closer. “They make deliveries out of town, and they always help me on pricing, especially if it’s a long delivery,” Fierros said of the handson help he receives each time he calls Tejas Equipment. “Everyone is well trained and knowledgeable on the equipment and the price is right,” Fierros is so impressed with the employees’ detail for good customer service, that he has remained a loyal customer and has used their equipment at more than 20 job sites. Musgrove, who said he personally enjoys helping customers, is following in his father’s footsteps, a man who was very hands on, controlled the business and enjoyed the work, Musgrove said. The company, which now employs more than 75 workers, continues to improve. As he moves in to 2016, he said the biggest two challenges are managing the companies’ growth, everything from equipment to employees, and managing his employees. The biggest challenge is that we made sure we made the right decisions and ensure

employees are both focused and happy. “It’s a challenge keeping everyone pointed in the right direction,” Musgrove said. However, Musgrove isn’t fazed by the day-to-day challenges as he believes his continued involvement in the company will propel them into further success. His motto is simple: treat the customer like we’d like to be treated. Musgrove said that while he has no definite locations chosen yet, he is always searching for underserved areas and hopes to build new locations soon. “Tejas Equipment’s mission is to continue to be a leader in the equipment rental and sales business,” Musgrove noted as the company’s mission statement. “We strive to provide ‘quality,” ‘excellence’ and ‘first-rate service’ in order to provide the highest level of customer satisfaction. Tejas Equipment also strives to provide opportunities for their employees to grow, develop their skills and talent, while striving for a safe and healthy work environment.” Tejas Equipment Rental offers a wide range of equipment, including forklifts, compactors, aerial lifts, excavators or loaders, the site states.

January 2016 | Construction Equipment Distribution | www.cedmag.com | 47

>> NEW MEMBER PROFILE

Each Quarter, AED Will Introduce You To Our Newest Members By Spotlighting Their Companies. Welcome New AED Members! Yes Equipment Menomonee Falls, WI Yes Equipment offers at their Wisconsin and Illinois locations high-quality, American-made new and used forklifts and lift trucks backed by an international company, one of the largest in the industry. Kutchins Robbins & Diamond Schaumburg, IL KRD occupies contemporary office quarters in Schaumburg, the heart of Chicago’s northwest business corridor; and serves clients throughout the Chicago area. We provide a full range of client services: audits, reviews and compilations; financial, retirement and estate planning; accounting and software consulting; tax and business valuations services.

A. Montano Co. Saugerties, NY Family owned for over 25 years, A. Montano Co., Inc rents, sells, buys & services heavy equipment. Tejas Equipment Rentals San Antonio, TX Tejas Equipment Rental offers a wide range of equipment for most any application. Choose from the forklifts, compactors, aerial lifts, excavators or loaders you might need amongst our selection of tools for rent. Amarillo National Bank Amarillo, TX Being a family bank in a place where family comes first, we know what it’s like to work together through good times and bad. It’s that Panhandle Spirit that binds us together.

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>> NEW MEMBER PROFILE Federal Contracts Corp Tampa, FL Federal Contracts Corp was founded in 2003 and has built a reputation for delivering products that meet the demands of your fleet and maintenance departments. We are listed on DNB, up to date SAM, and CPARS evaluated.

Fecon Lebanon, OH Fecon equips its customers with heavy and severe-duty equipment and industry-leading support after the sale. By providing the highest value products and superior service, Fecon forges lasting relationships. Why Fecon? Because we help you clear the way to a job well done!

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Dealer Inquiries: kurt.vanportfliet@webasto.com | PolarCabCooling.com January 2016 | Construction Equipment Distribution | www.cedmag.com | 49

>> NEW MEMBER SPOTLIGHT

BlueLine Rental Shippensburg, PA BlueLine Rental is a US company that rents construction equipment to contractors and retail consumers through a network of company owned stores. Hill Barth & King Greenwood, IN Established in 1949, HBK serves clients ranging from individuals to small businesses to multimilliondollar corporations across the United States through our 11 office locations. We specialize in a wide variety of tax, accounting, assurance, and business consulting services which can help you achieve all of your personal and business goals.

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Housby Auctions Des Moines, IA Founded in 1969 by Jack Housby as a Mack Truck dealership in Des Moines, IA, our company has grown to serve client companies across America and around the world. We have built strong partnerships with owners and managers and have responded directly to their needs by developing and delivering a host of unique, targeted products and services. Bio-Circle Canada Pointe-Claire, QC Bio-Circle, a division of Walter Surface technologies, provides high performance green cleaning, degreasing & lubricating solutions designed to improve worker health and safety in industrial applications.

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>> SUCCESSION PLANNING

KEITH BUTCHER

Succession Planning for the Equipment Distribution Industry Identifying realistic options for the next layer of leadership is an essential process. The equipment dealer industry has offered substantial entrepreneurial opportunity to generations of family business owners. Dealer ownership allows a family to create a business that generates significant earnings, and in many cases, a business that will develop the family’s future wealth by owning the dealership’s real estate. Historically, “business succession” has been a topic of interest for equipment dealers, but not a topic that had a high sense of urgency; mainly because there was another generation within the family that was already groomed to assume ownership moving forward. Today, the multi-generation family dealership is less prevalent. Fewer family members are interested and equipped to take over the business; thus forcing the current owner(s) to address succession planning and identify realistic Keith Butcher options for the next layer of leadership. The menu of exit strategies is often predicated by the dealer’s size and geography.

Smaller Dealers

For local dealers, the natural buyer of their business is the mid-size or larger dealer with a contiguous geographic presence. Manufacturers are generally amenable to these buyouts as they usually strengthen the brand’s position in a smaller market and solve the succession dilemma. The only other practical solution for a smaller dealer is transferring the business to a family member or trusted member of the management team. The departing owner needs to develop and train the successor so that next generation of leadership can adequately carry on the dealership’s opportunities for growth and sustainability. Some owners find it difficult to step back and let go of the reins, but it is important to immerse the successor in the day-to-day operations, so he or she can gain the experience necessary for successful leadership. Current owners should initiate the transition to family or a key employee early, since most experts estimate that the process of developing and training the successor can take years to accomplish. Creating a timetable and adhering to its milestones allows the successor, management and employees to be aligned and fully informed when it’s time for the final phases of transition.

Mid-Size Dealers

Similar to smaller dealers, mid-size dealers can alternatively sell the business to family, key employees, or the management team. Mid-size dealers have two other primary buyers—another mid-size dealer or a larger dealer. Both transactions would be very closely monitored by the manufacturer(s) as they result in consolidated 52 | www.cedmag.com | Construction Equipment Distribution | January 2016

market share and narrower dealer diversification. These transactions make manufacturers nervous as they often create “too-big-to-fail” dealers. Following the Great Recession, manufacturers have become more accepting of these acquisitions as they value a strong dealer over and above the risk of consolidation and its resulting deterioration in diversification. Mid-size dealers have yet another exit option, which involves selling the business to a leveraged Employee Stock Ownership Plan (ESOP). ESOPs appeal to owners for a number of reasons. They create wealth for the employees, and they do not involve an outside entity taking control of the business. The selling shareholder transfers all or a portion of his stock in the company to an ESOP trust. These transactions are typically financed by the seller(s) since the dealership is not large enough to attract non-productive debt. The company releases shares to the trust as the loan is paid down over time. Those shares are subsequently distributed to employee accounts using a formula based on the plan’s legal documents. Exiting the business to a leveraged ESOP is a fine way to manage succession issues while allowing the company to pay out the former owner(s) over time. Additionally, the tax advantages associated with an ESOP allow the seller(s) an attractive after-tax valuation (as they have the option of deferring capital gains tax, in many cases indefinitely) while the company is allowed to use pre-tax earnings to retire the obligation to the former owner(s).

Large Dealers

While there are always variations, large dealers generally have four succession paths—going captive, selling to another large dealer, selling to private equity, or selling to an ESOP. Most manufacturers definitively state that acquiring dealers as captives is not in their strategic plan, but they will do so if the issue is forced. There are variations on this theme where manufacturers help finance the exit of the founders, and take on operating control (even if not outright ownership) in order to place hand picked, loyal executives in the company. This is not a bad trade for the owner. If they are properly represented, they should be able to get fair market value for the business. For the manufacturer, it is a combination of earnings accretive and defensive. If the dealer is profitable, they vertically integrate earnings and make certain they do not lose important market share, which is likely in multiple important markets. The option of selling to another large dealer to create a mega dealer tends to involve a fair amount of pushback from the manufacturer; however, the options may be limited to just that. If the manufacturer is not prepared to step in and participate, then this may be the only option. Many times, this is combined with a commitment from the acquiring dealer to sell off parts of the merged business to other smaller dealers in an effort to reduce some of the consolidation effect and strengthen other smaller dealers. The third option would be the sale to a financial buyer (i.e. private

equity fund) This option is not a common alternative. Private equity does not traditionally target the dealer market because the exit options for them are limited. Although there are a few publicly traded dealers, primarily in Canada, private equity groups just don’t see this as a legitimate exit option. Furthermore, if they buy a large dealer and grow it, which is always the end goal, then they have just exacerbated the lack of available buyers. At the same time, there has been some activity in recent years as family offices looking for cash-yielding investments have started to explore the dealer market as a place where they can invest relatively large checks and obtain a solid return on investment. Family offices are not particularly focused on exiting and have a long-term hold philosophy. Although this is a great option for a dealer, a team of experienced advisors must properly represent the seller(s) as this type of buyer is extremely sophisticated. The final succession alternative involves selling to an ESOP, which can be a viable and attractive option for large dealers. Unlike mid-size dealers, large dealers can typically attract non-productive debt to fund the ESOP buyout. As a result, this style of transaction can look very similar to selling to a third party. The dealer would receive a significant amount of their sale proceeds in cash at

closing, typically 60-75 percent in cash, with the remainder generally funded through KEITH BUTCHER Prior to founding market-priced seller financing. A critical ButcherJoseph & Co., Keith served as Execissue in managing a successful ESOP buyout utive President of Purcell Tire & Rubber Co. includes working through the transaction with the manufacturer(s) and getting them on and held a seat on the board of directors of the company. During his tenure, he successfully board early in the process. Manufacturers are primarily concerned with the durability of the ran all day-to-day and strategic affairs for the company’s large diversified distribution and business model post-transaction—not only manufacturing business. Under his leadership, from the perspective of supply chain credit, the company successfully managed through but also in terms of defending their market the great recession and completed several share. M&A transactions from 2008 through 2010. According to the ESOP Association, these ownership plans cover 10.3 million employKeith earned his Bachelor’s Degree in ees in the U.S., accounting for 10 percent of International Business and Finance from the private sector workforce. While ESOPs are Bradley University. Keith earned his law appealing to many owners, this strategy does degree at Wake Forest University. not suit every company. An owner interested in selling to an ESOP should consult an advisor with significant ESOP experience to determine if an employee buyout is the best alternative to achieve their objectives. January 2016 | Construction Equipment Distribution | www.cedmag.com | 53

DEMAND SPURS NEED FOR EXPANDED DOOSAN DEALER NETWORK North American dealer network grows, but good dealers are still needed

Doosan continues to emerge as a leading heavy equipment brand in North America, but its roots in construction equipment go back 75 years. Today, the company’s heavy construction equipment comprises a full range of

Already a strong international brand, the organization aspires to be a top global leader in the construction equipment industry by continuing to produce performance-driven products for customers in several markets and supporting them with a growing network of successful dealers. The Doosan strategy has firmly positioned the manufacturer in the global top five, and momentum is building. “Doosan is equal to, if not better than, the top four heavy equipment manufacturers in the world because it provides high-performing equipment, a solid management team, an excellent marketing strategy and the dealer tools you need to compete for a sale, all at a price that beats the competition,” says Giovanni Albanese Jr., assistant general manager, Equipment East.

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The ability of Doosan to meet its aggressive global goals is integrated with a clear commitment to North America. It starts with advanced products that are manufactured in South Korea, Europe and the United States, as well as its state-of-the-art service and sales training facility based in Suwanee, Georgia, and parts distribution centers located in Chicago, Illinois, and Mississauga, Ontario (Canada). All of these functions – along with the North American dealership network – are supported from

material handlers, wheel loaders, articulated dump trucks, attachments and fleet management solutions.

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

the company’s headquarters in West Fargo, North Dakota. The Doosan brand is evolving: Sales are on the rise, parts and service activity is increasing, and the dealer network is expanding. Providing coverage throughout North America, Doosan has experienced a more than 60 percent increase in dealer growth over the past six years. The combination of a growing distribution channel, a maturing brand and improving markets has created the ideal time for considering a new opportunity to supplement your business with the industry’s emerging leader.

Dedicated dealer training and development The Doosan commitment to dealers includes providing the business tools and support needed to establish the brand and compete aggressively in local markets. One of a Doosan dealer’s most significant resources is The Real Operation Center (ROC) near Tucson, Arizona. Recognizing the valuable role training and demonstration plays in the acquisition process, Doosan developed The ROC to provide a hands-on operation and learning environment for dealers – a dedicated venue in real terrain. In an era when it’s rare to sell a machine without a demonstration, The ROC has been a game changer for Doosan. Not only does

it help visitors better understand the Doosan brand, but it has quickly become regarded as one of the industry’s most respected sites for hosting customer experience events that often help dealers close deals.

who have a vision for growth and are excited to help customers find new solutions to their challenges. They have the staffing capabilities and the capital to expand with a manufacturer who has the same vision.

“All of our salespeople have been eager to attend these training events,” says Jeff Boyle, Regional Director of Earthmoving Sales, H&E Equipment, “and there are enough opportunities that we’d like every salesperson to take customers to The ROC each year, and I’m talking the entire H&E footprint.”

Representing Doosan has been a profitable venture for traditional dealer business models, but it’s also been particularly successful for businesses that are positioned to bolt on equipment distribution to complement existing services. “We knew of Doosan from working in the construction business as a contractor, which is still a division of our company. So we visited The ROC in order to learn more about the company and their products and were very impressed. We thought representing Doosan could take our business to the next level and allow us to compete with the top manufacturers in the world,” adds Albanese.

Dedicated training is also demonstrated with Doosan University, a robust online tool consisting of courses in sales, service, parts and dealership development. This training initiative is just one component of a new dealer extranet that centralizes all Doosan dealer communication ranging from product information and an ordering portal to warranty and sales incentive programs. It also houses Doosan AdCenter, where dealers can gain professional marketing support and use brandcompliant advertising technologies to execute marketing plans. Finally, Doosan provides opportunities for progressive dealers to take an active role in the evolution of product development and process improvement through key advisory teams and participation at regional and national meetings. And the company reviews performance metrics and recognizes outstanding efforts with dealer principal incentive trips.

Building momentum in the field Momentum continues to build – literally – as several Doosan dealers in the U.S. and Canada are investing in dealership expansion or building newer facilities as a result of taking on the Doosan brand. And the industry is taking notice that Doosan has evolved into a top global heavy machinery manufacturer that has the potential to make even greater strides with a larger North American dealer network.

GROW YOUR BUSINESS WITH DOOSAN. Interested in partnering with one of the fastest growing construction equipment manufacturers?

“We thought representing Doosan could take our business to the next level and allow us to compete with the top manufacturers in the world.”

Chad Roehrich

New Dealer Recruitment Manager

A catalyst for new business There are several equipment manufacturers to partner with in the construction industry. What sets Doosan apart as a manufacturer – beyond its ability to produce advanced equipment that lives up to dealer and customer expectations – is a mindset to build long-lasting relationships. “Doosan is committed to growth and market share. There are aggressive incentive and finance options, marketing campaigns and assurance for machine and parts availability. Not to be understated is the emphasis Doosan has placed with its dealers and the commitments for training and support,” says Rich Dunham, vice president and branch manager, Craig Taylor Equipment.

“There’s momentum, and Doosan is growing and improving its distribution network with the addition of high-quality, financially strong dealers,” says Tim Watters, president and chief executive officer of New Jersey-based Hoffman Equipment. “If you’re looking for a manufacturer to partner with as opposed to just representing, then Doosan offers a premium product with premium support and is focused on building relationships with its dealer partners.”

250 East Beaton Dr. West Fargo, ND 58078 970-231-9383 chad.roehrich@doosan.com

DoosanEquipment.com/grow Visit us at the 2016 AED Summit January 19-22 Gaylord National Resort Washington, DC Suite 15146

While Doosan products continue to evolve to meet the changing needs of construction contractors, municipalities and rental companies, the traits of a good dealer never change. Successful Doosan dealers are entrepreneurs

January 2016 | Construction Equipment Distribution | www.cedmag.com | 55

>> 2016 AED SUMMIT & CONDEX

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For A Successful 2016 2016 Summit Directory Preview: p.57 9th Aunnual Auction p.60 Suites p.62 Exhibitors p.63 2017 Summit

56 | www.cedmag.com | Construction Equipment Distribution | January 2016

>> 2016 AED SUMMIT & CONDEX

9TH ANNUAL FOUNDATION AUCTION

PRESENTED BY THE AED FOUNDATION & RITCHIE BROS.

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This beautiful necklace showcases a 1.05 carat cushion-cut sapphire framed by diamond rounds. Accompanied by 14kt white gold necklace.

This watch has 42mm Space Black Stainless Steel Case with Space Black Link Bracelet. Includes the AppleCare Protection Plan for up to two years. In celebration of the AED Foundation’s 25th Anniversary this includes one bottle of each: 1962 Potocki Vodka, 1989 Speyside Single Malt Whiskey, 1984 Dominus Estate Bordeaux, 1985 Guimaraens Aged Port, Vineyard 29 Cabernet Sauvignon and Elijah Craig Whisky Aged 23 Years. The Big Green Egg stands alone as the most versatile barbecue or outdoor cooking product on the market. Grill comes with Green Egg Charcoal, Green Egg fire starter, Green Egg Plate Setter and Ash Tool.

Enjoy America’s most extravagant springtime sports party and one of the most celebrated events. Experience includes two Grand Stand Tickets to the Derby and overnight accommodations for two nights. Trimmed in deluxe European leather, this executive chair features a deluxe comfort headrest, comfort tiltup armrests and heavy duty polished aluminum base.

You and a guest will attend two days of your choice at the 2016 Masters Tournament. Your package also includes access to 5-star facility, breakfast buffet and elegant multi-course luncheon and one room for three nights at an area 3-star Augusta hotel. Don’t miss the semi-final race in the Chase. This package includes Two Hot Pit Passes for November 11-13, 2016 pre-race and race events, access to the pit area during the driver practice and qualifying rounds in addition to being there during the Nationwide and Sprint Cup races and two night hotel stay in a local hotel.

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

>> 2016 AED SUMMIT & CONDEX

2016 American Music Awards Value: $2,750 Lot 109

Kingsmill Golf Package in Historic Williamsburg, VA Value: $2,500 Lot110 Costa Rica All Inclusive Vacation for Two Value: $4,500 Lot 111

August Masters tournament Hospitality Experience Value: $14,000 Lot 112 Canadian Fishing By Invitation Only in British Columbia Value: $10,000 Lot 113

SILENT AUCTION ITEMS Viva Las Vegas Package Value: $750 Lot 114 Scotch Collection Value: $650 Lot 115 Orlando Hotel Getaway Value: $650 Lot 116

58 | www.cedmag.com | Construction Equipment Distribution | January 2016

Package includes two mezzanine tickets to the award show, two nights stay at Four Seasons Beverly Wilshire Hotel and two tickets to the Grammy Museum.

You and three guests will stay in a two-bedroom, courseside condominium for two nights. Package one round of golf each day for four people on both the River and Plantation Courses. Enjoy six day and five nights at the Five Star Los Suenos Marriott Ocean & Golf Resort in Beautiful Costa Rica. This all-inclusive package includes beverages and meals plus your choice a round of golf for two or two massages and airline gift cards valued at $1000.

This 2016 Masters package includes three nights of accommodation in a private Executive home, two tickets to tournament on April 9th and 10th, Hospitality Passes and souvenir chairs included.

You and a guest will experience outstanding Pacific Salmon fishing for three days and two nights at Warm Springs Resort, British Columbia, Canada. Professional guides, fishing equipment, sleeping accommodation and meals are all included.

Experience all that Las Vegas has to offer starting at The Mirage hotel. This package includes two night accommodations for two in a One Bedroom Tower Suite, dinner for two at a gourmet restaurant, and round trip Limo to and from the airport. For the scotch lover, we created a sampling of different bottles of Scotch whisky. Bottles include 18 year Brennahabhain, 12 Year Glenlivet and 12 Year The Glenrothes just to name a few. Discover a world of possibilities at the Orlando World Center Marriott. Getaway includes 2 night hotel stay and $100 Visa gift card.

>> 2016 AED SUMMIT & CONDEX

Dave Mitchell, Todd Cohen and Christine Corelli

Signed Books by Summit Educational Presenters Value: $100 Lot 117 Memphis Vacation Getaway Value: $650 Lot 118 Tickets to the Gehl Club at Miller Park Value: $500 Lot 119 Around the World in 12 Wines Value: $200 Lot 120

Potomac Hotel Package Value: $600 Lot 121

George W. Bush 43: Presidential Cobalt Cufflinks Brian P. McGuire

Value: $300 Lot 122 New Orleans Getaway for Two Value: $550 Lot 123 iPad Air 2 Value: $650 Lot 124 Cigar Aficionado Collection

Board of Directors

Value: $800 Lot 125

Take some knowledge back to your dealership from Summit professional education presenters. Book topics include customer service, sales and leadership.

Experience two nights stay at the historic opulence, gracious Southern hospitality and distinctive accommodations at Peabody hotel in Memphis, Tennessee. Enjoy four tickets to the Gehl Club at Miller Park in Milwaukee, WI, named one of the top five luxury areas in all of baseball by Forbes Magazine. Tickets are good for most select games during the 2016 season.

A case of red wines from California, Oregon, Italy, Spain, Chile, Portugal, France, and Argentina selected by Edgar Salinas, proprietor of Old Town Alexandria’s Altura Wine, the AED’s government affairs team’s favorite wine store. Come back after Summit and enjoy once again the luxurious comfort at Gaylord National Resort & Convention Center when visiting the Washington D.C. area. Package includes two night hotel accommodations with breakfast for both mornings.

These one of a kind brilliant cufflinks feature a raised executive eagle surrounded by 50 stars on a deep blue Cobalt background. Only made while President Bush was in office. Experience the excitement of New Orleans; one of the must-see travel destinations in America. Stay two nights at the Loews New Orleans Hotel. Breakfast for two included both days. iPad Air 2 is even thinner and lighter than the astonishingly slim predecessor. This item is wifi compatible and had a 64 GB memory.

Become an instant aficionado with this hand-picked selection of cigars.

January 2016 | Construction Equipment Distribution | www.cedmag.com | 59

>> 2016 AED SUMMIT & CONDEX Visit the suites of all of your current suppliers and forge stronger relationships with the companies that support your dealership. Pre-registered as of 12/14/15

Company

Suite

Allied Construction Products, LLC Associated Construction Publications) Atlas Copco Mining, Rock Excavation, and Construction LLC Bank of the West Equipment Finance Bell Trucks America Black Cat Blades Ltd. BOKF Equipment Finance Inc. Bomag Breaker Technology, Inc.

10223 7037 6000 5135 6037 4101 8081 12146 11028

Caterpillar Financial Services Corp. Chase Cummins Inc. De Lage Landen Financial Svcs. Inc. Dieci US LLC Doosan EPG Insurance Inc. ESCO Corporation GE Capital Genesis Attachments Glynn General Corporation GOMACO Corporation Hensley Industries, Inc. Hyundai Construction Equipment INDECO North America, Inc.

17122 15028 18209 5217 14028 15146 7000 14052 6176 9082 14146 12028 16122 14209 17052

JLG Industries, Inc. KCMA Corporation

3176 10058

Equipped to Cover Your Insurance Needs Proper coverage for you, your employees and equipment is our paramount focus at Fairview Insurance Agency. In conjunction with Samsung Fire & Marine Insurance, rated A++ by AM Best, we have specifically created tailored coverages that addresses the distinctive types of mishaps and risks your company faces every day. To learn more, contact: Cheryl A Graham Fairview Insurance Agency Associates, Inc Tel: 800-452-5376 Fax: 856-424-7933 Email: cgraham@fairviewinsurance.com www.fairviewinsurance.com

Please visit us at CONDEX Booth 310

60 | www.cedmag.com | Construction Equipment Distribution | January 2016

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11/18/2014 11:31:43 AM

>> 2016 AED SUMMIT & CONDEX Kobelco Construction Machinery USA Inc. LBX Company LLC LeeBoy Liebherr Construction Equipment Co. LiuGong Construction Machinery N.A. LLC Manitou Americas, Inc. Manitex International Manitowoc Cranes Montabert/Geith NPK Construction Equipment Inc. Paladin Attachments, div of IES Peopleâ&#x20AC;&#x2122;s United Equipment Finance Corp. Pettibone Ritchie Bros. Rockland Manufacturing Co.

8028 7176 4000 7135 9146 5037 12058 6135 15122 5221 19144 8146

Sakai America, Inc. Sandvik Construction Sennebogen LLC Stanley Hydraulic Tools Sumitomo Mitsui Finance and Leasing Co., Ltd. Takeuchi Mfg. (U.S.), Ltd. Terex Equipment Ltd. Terramac U.S. Bank Equipment Finance Inc. Distribution Finance Group Volvo Construction Equipment North America, Inc. Wells Fargo Equipment Finance, Inc. Zoomlion Heavy Industry NA, Inc.

5211 11146 7058 10146 15052 17122 18223 7082 4105 3082 16028 6082

16052 8058 14122

Please visit us at CONDEX Booth 607

January 2016 | Construction Equipment Distribution | www.cedmag.com | 61

>> 2016 AED SUMMIT & CONDEX

Be sure to visit these exhibitors at the 2016 AED Summit & CONDEX! Pre-registered as of 12/14/15 Accruit

328

EPG Insurance Inc.

601

MultiOne - OLS

339

ADI Agency

421

Equipment Data Associates - EDA

102

Okada America, Inc.

424

AED Government Affairs Office

430

FAE USA, Inc.

115

221

Allied Construction Products, LLC

515

310

AMAM

507

Fairview Insurance Agency Associates Inc.

Pavement Recyclers/Bagela USA LLC Pettibone

321

AMI Attachments Inc.

307

Fecon Inc.

206

328

AmTrust North America

411

Felling Trailers Inc.

531

PricewaterhouseCoopers LKE Services

Anaconda USA Inc

118

Finn Corporation

415

Prinoth

425

FRD.USA / Breaker Attach. Div. (Kent)

630

Relevant CRM

706

Rock & Dirt

603

FRD.USA, Rock Drill Division

634

Rockster North America Inc.

331

Gorilla Hammers div. of Tech Hydraulics, Inc.

325

Rogers Brothers Corporation

340

Rototilt Inc.

302

Hamsar Diversco Inc.

547

RUBBLE MASTER Americas Corp.

338

Helac Corporation Attachments Division

510

Screen Machine Industries LLC

609

Sentry Insurance Company

401

HKX, Inc.

501

Site-Seeker, Inc.

125

HydrauliCircuit Technology, Inc.

420

Soosan USA, Inc

207

Hydrema US Inc.

739

Steel Unlimited, Inc.

215

IHI/Compact Excavator Sales LLC

309

Stewart-Amos Sweeper Co.

306

Infor

533

Striker USA

110

IROCK Crushers LLC

519

Sullair, LLC

614

ITR America

104

Sullivan-Palatek

407

JT Bates Insurance Group

530

Tag Manufacturing, Inc.

410

Knapheide Manufacturing Company, The

539

Textron Aviation

111

LDJ Manufacturing Inc.

112

Toku America, Inc.

518

Log Max Inc.

327

TRAMAC Corporation

324

Lowe Manufacturing Company, Inc.

700

TRIP (The Road Information Program)

322

107

Vac-Tron Equipment LLC

315

ValuePart Inc.

209

Webasto Thermo & Comfort North America, Inc.

618

Winkle Industries

334

Yellow Iron Advisors

710

Associated Equipment Distributors 432 ATLAS Cranes & Excavators

506

Beka-Max of America Inc.

646

BidSpotter.com

535

Black Cat Blades Ltd.

406

BLS Enterprises, Inc.

300

Breaker Technology, Inc.

223

C.W. Machine Worx, Ltd.

525

CardConnect

422

CDK Global

301

Chicago Pneumatic Construction Tools

439

CIS Rubber Tracks

546

Coneqtec/Universal/BIC

433

Construction Equipment Guide

534

Craig Manufacturing Ltd.

435

C-TABS

210

Curry Supply Co.

702

DENIS CIMAF inc.

121

Diamond Mowers

639

Dieci US LLC

707

Digga North America

201

DIS Corporation

607

Machinery Trader and Auction Time

Dispatching Solutions, Inc.

100

McCloskey International

538

E. D. Etnyre & Co.

346

Midland Machinery Co., Inc.

431

417

MinnPar

311

500

Montabert/Geith

514

MSI Data

214

eBS Mechdata, Inc. e-Emphasys Technologies Inc.

62 | www.cedmag.com | Construction Equipment Distribution | January 2016

CHICAGO, ILLINOIS

JANUARY 10–13, 2017

Whether you’ve been serving the North American equipment market for decades or just entering the

industry, AED Summit & CONDEX is the show to connect with industry-peers, attend dealer-specific education courses and view new product lines.

MARK YOUR CALENDAR JANUARY 10-13, 2017 HYATT REGENCY CHICAGO,

CHICAGO Register Online at bit.ly/aedevents

>> CASE STUDY

BRANDY HEARTING

Business Aircraft Work Hard for Construction Equipment Dealers Industry leaders explain the long-term benefits of aircraft ownership.

“Flying is so much fun. The technical aspect is part of the joy.” — Fred Berry, chairman emeritus, Berry Companies and former private pilot

For heavy equipment distributors, business happens in many places – at branch stores, manufacturers’ factories, equipment demonstrations, customers’ offices, industry meetings and training sessions. Bridging the hundreds of miles between them, often in the same day and from locations not readily serviced by airlines, poses huge challenges. To avoid the unproductive down time that comes from driving or flying commercially, Stowers Machinery Corporation and Berry Companies have operated business aircraft for 55 and 60 years, respectively. Their founders realized the benefits early, giving each company an edge that has led to significant growth, as well as long-term stability and success. Why business aircraft work for heavy equipment distributors: Saves time, allows for same-day turnaround Provides scheduling flexibility More face-to-face time with customers More cost effective than airlines, especially with a larger group Schedule control

Stowers Machinery Corporation Knoxville, Tennessee

Since opening its doors in 1960, Stowers Machinery Corporation has always owned and operated aircraft – starting with a Cessna® 170. With their heavy machinery dealership based in Knoxville, Tennessee, the three Stowers brothers needed to visit manufacturers’ factories in neighboring states. Driving meant long hours traveling back roads and overnight stays in motels. With their single-engine piston aircraft, the entrepreneurs were able fly into small towns, quickly and easily, to reach factories, remote job sites and customers. “Aircraft have been a part of our business since the beginning. Two of my uncles were pilots,” said Wes Stowers, president. “In the old days, travel was a lot more difficult, far more so than today. We didn’t have the interstates 64 | www.cedmag.com | Construction Equipment Distribution | January 2016

back then. But, with the little airplane, they could just get in and go.” Today, Stowers Machinery has grown to 355 employees. It sells and services heavy equipment, from large construction and mining machines to small, compact construction equipment, such as skid-steer loaders and mini excavators, in Tennessee’s eastern 38 counties. It also sells a broad line of diesel and natural gas-powered generators and operates a full-service rental division. In addition to being a Caterpillar dealer, Stowers represents Screen Machine, Bandit, GOMACO, Genie, Finn, Sullair, BBA Pumps, Weiler and other product lines. Aircraft have played such a crucial role in developing and growing the company that Stowers Machinery has owned and operated two aircraft at a time during most of its history. Today, the business operates a Cessna Citation® CJ3® for longer trips and a Beechcraft® Baron® G58 for short hops. The company employs a full-time pilot, and Stowers is a veteran pilot with nearly 9,900 flight hours. “We primarily use the airplanes to visit factories or equipment demonstrations throughout the eastern U.S., taking four to eight customers or employees. We can pick up our customers at their hometown airports and go directly to a factory, whether it’s in Illinois, North Carolina, Texas, Arkansas or Indiana. We can be there in an hour or an hour and 20 minutes,” Stowers said. “It saves a whole day of traveling and puts us in total control of the schedule.” “We’re in an area with good airline service, but to fly anywhere, we have to go to a hub. It makes airline travel difficult, time consuming and expensive. With our aircraft, there’s no two-hour delay before the flight, changing planes, missing bags or going through security,” Stowers said. “You go right where you want to go, stay as long as you need to stay and come right back when you’re done. It’s a lot easier to get a customer to agree to visit factories or machine demonstrations when you can control the transportation. It’s also a lot more comfortable.” The aircraft also help employees visit the company’s

Stowers Machinery Corporation owns two aircraft, including this Cessna Citation CJ3, for long-range trips.

six stores, attend training sessions and stay active in industry groups. “A lot of times, we’ll have five, six or seven employees who have to be in another city. It’s cost effective and certainly time effective to put them on our airplane,” Stowers said. He suggests companies in the market for an aircraft look for the best combination of speed, payload, range and price that fits the company’s travel needs. “Find something that fits your mission,” said Stowers, a former fighter pilot for the Air Force. “The CJ3 has been a great airplane for us. It’s so fuel-efficient. It burns less fuel in an hour cruising at 40,000 feet than I used to burn in one minute in afterburner in the F-4. It’s fast. It has good legs, a great payload and it’s comfortable.”

Stowers Machinery Corporation Annual Aircraft Usage Cessna CitationCJ3.....................300 hours Beechcraft Baron G58................100 hours

Time saved on typical trip: *

Berry Companies Wichita, Kansas

Aircraft have been a part of the Berry family business for 70 years. Three generations of pilots have used their passion for aviation to grow their company. It has become a large construction and industrial equipment distributor based in Wichita, Kansas, with 31 locations in six Midwest states. “I’ve loved aviation all my life. We’ve always had an airplane – 20 in all over the years. We would not have grown as much or have been as successful without aircraft,” said chairman emeritus Fred Berry, who

* Time depends on connecting flights. Time en route does not include 90 minutes to check in and go through security or the delays that are common in connecting cities.

January 2016 | Construction Equipment Distribution | www.cedmag.com | 65

>> CASE STUDY founded the Wichita-based company in 1957. Fred soloed in a sea plane in 1945 and eventually had instrument and multiengine ratings. “We started with a 1948 Cessna 170 at my father’s predecessor company in St. Louis, and my how proud of it we were. We currently fly a Cessna Citation Mustang®, our first jet. We love it even more.” The Berry family of companies spans Kansas, Missouri, Oklahoma, Texas, Colorado and Wyoming. Fred’s son Walter is now president and chief pilot, having flown since high school like his father. Both men say it is difficult to cover that much territory by driving, and it’s not practical to fly commercially. Reaching customers, branch locations, industry meetings and training sessions requires the company to own and operate its own aircraft. “We would not have expanded over the years or picked up business in places like Houston if we had to run back and forth on the airline,” Walter said. “We value face time with our key people.” Over the years, Berry Companies has established or acquired seven companies, including those that sell, rent and service Bobcat, Yale and Komatsu equipment, among other manufacturers’ brands. Like its customers, Berry’s 600 employees are spread out in the 600-mile sales territory. With the Citation Mustang, the typical flight is less than two hours, saving an enormous amount of time. “We like being able to just get in and go,” Walter said. “All that communication and customer interface and time with key employees is critical to growing our business. We work at avoiding the ‘ivory tower’ syndrome.” As for growing his business, Walter is confident aircraft will continue to be a valuable tool for the company. “The aircraft helped us grow. As we had opportunities to expand, to open a new store or branch out a little further away, we used the aircraft to get us there. We wouldn’t have been able to reach a lot of those places any other way,” he said. “We went into Colorado early because we could see the growth potential of that state. We’ve been there since the 1960s. That would have been very difficult and expensive without an aircraft. Whether it’s a Cessna 170 or a Citation Mustang, aircraft have been smart tools for us.”

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

Brandy Hearting is a 16-year aviation veteran working with owner/operator customers transitioning into technically advanced aircraft. She holds an Airline Transport Pilot license with 5,000 hours flight time and four type ratings.

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Manufacturers’ Council: AED embraces our manufacturer members and established this group to give OEM executives a platform to share ideas that will help manufacturers engage more effectively and prosperously within the association. Committee Contact: Jon Cruthers Phone: 630-468-5127 Email: jcruthers@aednet.org

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advertisers’ index Amtrust Specialty Equipment....................................... 69 Beka-Max of America Inc............................................. 48 BidSpotter.com............................................................ 27 BOKF Equipment Finance Inc....................................... 41 CDK Global..................................................................... 1 Construction Equipment Guide.................................... 35 DIS Corporation........................................................... 61 Doosan....................................................................54-55 eBS Mechdata, Inc....................................................... 71 e-Emphasys Technologies Inc......................................... 6 EPG Insurance Inc......................................................... 13 Fairview Insurance Agency Association Inc.................. 60 Gorman-Rupp Co......................................................... 23 HydrauliCircuit Technology, Inc.................................... 20 Hydrema US Inc........................................................... 29

IHI/Compact Excavator Sales LLC.................................. 50 KOBELCO Construction Machinery USA....................... 51 Leading Edge Attachments, Inc................................... 45 Okada America, Inc...................................................... 70 Perkins Engines, Inc......................................... Back cover Ritchie Bros. .........................................Inside front cover Rototilt Inc................................................................... 15 Screen Machine Industries LLC....................................... 9 Sentry Insurance Company.................... Inside back cover Unified Purchasing Group............................................ 67 Webasto Thermo & Comfort North America, Inc......... 49 Wells Fargo Equipment Finance, Inc............................... 5 Xapt Corporation........................................................... 2

As the official magazine of Associated Equipment Distributors, this publication carries authoritative notices and articles in regard to the activities of the association. In all other respects, the association cannot be responsible for the contents thereof or the opinions of contributors. Copyright © 2013 by ASsociated Equipment Distributors. Construction Equipment Distribution (ISSN0010-7655) 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: 600 W. 22nd St., Suite 220, Oak Brook, Ill. Phone: 630-574-0650. Periodicals postage at Hinsdale, Ill. 60521 and other post offices. Additional entry, Pontiac, Ill. POSTMASTER: Send address changes to Construction Equipment Distribution, 600 W. 22nd St., Suite 220, Oak Brook, Ill. 60523

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70 | www.cedmag.com | Construction Equipment Distribution | January 2016

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>> RISK MANAGEMENT

ERIC STILES

Sentry Insurance Provides Guidance on General Safety Questions For Construction Equipment Industry

Account Executive Eric Stiles discusses important saftey questions that are industry-specific for the construction equipment dealerships.

Q: For the most part, my employees make good decisions when it comes to their own safety. However, we continue to see some choices by employees that not only violate our policies, but also result in an injury. Is there a way I can keep our employees from making these decisions? A: Great question. Why do employees sometimes work unsafely? Employees often believe simply completing a task is more important than performing that same task safely. They can fall victim to two common misconceptions reducing their safety concerns, in turn creating a higher risk of injury: They believe a low likelihood of an injury will occur. They believe other priorities such as productivity, return rates or sales volume are more important. Additionally, employees will tend to follow the lead of management – if their manager isn’t concerned with safety, then why should they be concerned? What can be done to get employees to work more safely? It starts with management. To create a safe

work environment, expectations regarding safety need to be developed and communicated. Most importantly, the safety guidelines must be followed by all employees, including and most importantly, managers! Here’s what to do: Create a Safety & Risk Management policy statement, sharing it with every employee Annually require every employee to read, agree with, sign and return an acknowledgement stating they will follow the guidelines in the Safety & Risk Management policy statement Set a safety improvement goal each year, updating employees on the injury and loss trends on a quarterly basis Integrate safety performance objectives into all employees’ annual performance evaluations, updating employees on a quarterly basis of their results Ensure your management team is held to the same guidelines as all other employees Ultimately, working safely and preventing accidents needs to become part of the organization’s culture. Setting expectations and monitoring results is a great first step! You can find a sample Safety & Risk Management policy statement and Employee Acknowledgement form online by visiting bit.ly/sentryforms. Paid endorsement.Property and casualty coverages and safety services are underwritten and provided by a member of the Sentry Insurance Group, 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.

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 | January 2016

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