September 2015
CED
Construction Equipment Distribution Published by AED: Business Fuel for a More Profitable Dealership
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contents CED Magazine | September 2015
vol. 81 no. 9
www.cedmag.com
>> FEATURES
34
Cover story:
ICUEE 2015
It’s back, and it’s bigger than ever. ICUEE takes Louisville by storm. See what’s in store!
38
Construction Company Owner Has High Expectations for Dealerships Everybody wants to be treated as if they’re the only one.
40
40 & Below Jonathan Campbell at Wheeler Machinery gives his crew tools for success.
>> DEPARTMENTS
9 >> AED hp 14 >> Ready to Order 20 >> Industry Beat 42 >> Data Trends 54 >> Ad Index
48
Good Company Brook Hale saw a need in the industry and set out to fill it.
September 2015 | Construction Equipment Distribution | www.cedmag.com | 3
>> EDITORIAL TEAM CED Magazine Director SARA SMITH ssmith@aednet.org Content, Layout, Design LocalLabs AED@locallabs.com
>> COLUMNISTS Steve Calechman Journalist Joanne Costin Co-Founder of Content for Biz Inc.
contents CED Magazine | Month Year
>>COLUMNS
29 >>Washington Insider
Equipment distributors prepare lawmakers for packed agenda.
30 >> Technology 101
Open source software is opening doors everywhere.
Kristen Crooks South Central Regional Manager
46 >> Money$$$Man
Christian Klein Vice President of Government Affairs
Brian Rehg Blue Stingray Codie Taylor Bluesky Strategy Group
vol. 81 no. 9
AED’s Cost of Doing Business Report is a great resource to help you analyze and compare your data.
50 >> Workforce Solutions
Here’s a look at why we should pay close attention to KPIs and some of the pitfalls in doing so.
52 >> Canada
AED and 42 percent of its Canadian members support changes to Hours of Service regulations.
56 >> Easy Wins >> ADVERTISING CONTACTS 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 600 22nd Street, Suite 220 Oak Brook, IL 60523 630-574-0650 fax 630-574-0132
Is it time to expand? Here are some first practical steps.
>>PLUS
44 >> Marketing Matters Dealers must make marketing an ongoing discussion.
27 >> In Memoriam
4 | www.cedmag.com | Construction Equipment Distribution | September 2015
Duane Wilder, Lonnie Parker
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>> PRESIDENT’S PAGE
BRIAN P. McGUIRE
Let Your Voice Be Heard Loud and Clear Get involved in the political process and make a real impact on construction equipment industry issues.
T
he U.S. Congress once again refused to act and pass a longterm solution to the Highway Trust Fund and many other issues that could impact our industry. To all our members, I urge you to get involved in the political process; the stakes are much too high to sit on the sidelines. Now is the time to let your voice be heard by your elected representatives or those wishing to represent you. And AED can help. This year, we kicked off an ambitious grass-roots program to meet with members of Congress in the districts of member facilities. The purpose is to reinforce the message our Washington staff is delivering to members of Congress and the administration. We are showing our lawmakers firsthand how their votes affect the construction equipment industry, from highway funding to tax policy and workforce policy to regulations. Elected and appointed leaders
are impacted by these visits to member facilities, and we need your help to host more of them. Hosting a meeting is easy. Just call your regional manager, who will coordinate with the lawmaker’s office to select a date that works for both of you. Whether you are on a first-name basis with your elected representatives or have never met them, these meetings are a powerful way to influence policy and educate legislators. The AED Political Action Committee (PAC) needs your support. If you have not filled out the consent form to allow AED to solicit your support, please do so today. The PAC allows AED to provide financial support to those who support your industry and the issues that matter. Help us grow the supporter list of this important government affairs tool. We are busy in Canada as well. AED is now represented by Bluesky Strategy Group, Inc. in Ottawa to make sure our
members’ voices are heard loud and clear. Staff is busy preparing for our second annual Canadian Public Policy Briefing, which will take place Thursday, Oct. 29, at the Fairmont Chateau Laurier. This meeting will not only provide you with information on policy issues affecting your operations but will provide great insight after the October election of members of Parliament. Regardless of who wins, the election will bring changes, and we will have the experts to offer their insights. I hope all of our Canadian members will consider sending a representative to attend this year. As you can see, your involvement in public policy is needed now more than ever. No dealer or manufacturer is too large or too small to participate. AED is ready to help make it easy and rewarding. By working together, we can have a major impact on public policy. n
BRIAN P. McGUIRE is president and CEO of Associated Equipment Distributors. He can be reached at bmcguire@aednet.org.
THE AED FOUNDATION | AN AFFILIATE OF ASSOCIATED EQUIPMENT DISTRIBUTORS
>> OFFICERS
>> DIRECTORS
A. ROY KERN Chairman Equipment Corporation of America
GARY BRIDWELL Ditch Witch of Oklahoma
SONJA METZLER Ohio CAT
DENNIS VANDER MOLEN Vice Chairman Vermeer MidSouth, Inc.
TODD COFFEY Brandeis Machinery and Supply Co.
DAVID REILLY John Deere Construction & Forestry
JOHN D. CRUM Treasurer Wells Fargo Equipment Finance.
DR. DONALD M. CLAYCOMB State Technical College of Missouri
KENNETH SILVERMAN Volvo Construction Equipment
BOB HENDERSON President The AED Foundation
MIKE HAYES Komatsu America Corp.
ANTHONY FASSINO Caterpillar, Inc.
CHRISTOPHER PERA Immediate Past Chairman Tri-State Equipment Services DIANE BENCK AED Board Representative West Side Tractor Sales Co.
September 2015 | Construction Equipment Distribution | www.cedmag.com | 7
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>> AED hp Highway Funding Bill Tops Agenda for Many Dealerships Congress was in recess in August, which meant most elected officials were back in their home districts. That also meant the grass-roots effort by AED to get members of Congress to visit their local equipment dealerships went full steam ahead. Those visits gave owners and executives the chance to bend the ears of their representatives on issues that are important to the industry. Ben Yates, east regional manager, said nine congressional visits were set for August and early September in the east region alone. No matter who was visiting, or whether the dealerships were large or small, he said the common theme was garnering support for a new federal highway bill. The highway bill funds bridge, road and transit projects nationwide. It was due to run out of money at the end of July. Before recessing in August, House leaders voted on a three-month extension of the bill. Yates said the measure has gotten several temporary extensions over the years, which has made it hard to plan. Bob DeSousa, state director for Sen. Pat Toomey of For instance, he said contractors need Pennsylvania, visits Stephenson Equipment in Harrisburg, to know there’s work waiting for them Pennsylvania, recently with Ben Yates, AED east regional before investing in road construction manager. equipment. “A new highway bill would mean long-term work for contractors,” Yates said. “Without longterm work, they are hesitant to invest in equipment.” Yates said during many of the August visits, dealership leaders told their representatives that purchasing a $50,000 to $100,000 piece of equipment is “not something you just show up and you buy and you take it home.” Rather, he said contractors must plan ahead by making sure they have financing, that the dealer has what’s needed in stock and that they have enough work to justify the expense. While Yates said most elected officials seem to agree that a long-term highway bill is imperative, there’s disagreement about its funding. He said there are several different funding proposals, but AED supports increasing the gas tax, which has remained unchanged since 1993 while the cost of building and maintaining roads has risen. This funding method, he said, acts as a user fee, U.S. Rep. Lou Barletta of Pennsylvania since those driving would be contributing tax dollars to pay for roads. visits Highway Equipment & Supply Co. in However, it’s an election year, and Yates said, “no one wants to vote to raise a tax because it Harrisburg, Pennsylvania. could be used against them in the election.”
West Region Dealers Welcome Visits from Members of Congress From Salt Lake City to Alaska, August was a busy month for AED members in the western regions. Members of Congress and senators visited equipment dealerships to meet with owners and executives and hear their take on issues that impact the industry. Phil Riggs, western regional manager for AED, said as of this year, the organization’s four regional managers are each charged with arranging 10 visits to dealerships from elected officials. In August, when Congress was in recess, several members of Congress and senators visited a mix of dealerships both big and small. Riggs said the main topic – like the congressional visits in the eastern regions – was long-term sustainable highway funding. “That’s the big issue for the equipment industry,” Riggs said. “The highway bill is obviously huge for us. Everything discussed (during the visits) was well received. Everybody can agree (highway funding) needs to be achieved, but not everyone can agree on how it should be done.” When it comes to funding the bill, AED advocates an increase to
the gas tax – which hasn’t been touched since 1993. Aside from raising the gas tax, Riggs said there are other proposals for funding the bill, such as a “miles driven” fee, which he said is a process that tracks how many miles a person drives and is charged based on the number, a measure the state of Washington already has in place. Riggs said the visits to dealers by congressional representatives and AED are very positive. “We can lobby on the Hill all day, but nothing is more effective than bringing members of Congress to a business that pays their taxes in their home district,” he said, noting that it’s good for elected officials to see locations that contribute to the local, state and national economy and provide jobs. “It’s a great way for dealers to voice their concerns with a member of Congress on noncompetitive issues.” For more on congressional visits to dealers and other topics of importance to the equipment industry, see Washington Insider on page 29. September 2015 | Construction Equipment Distribution | www.cedmag.com | 9
>> AED hp Next Generation of Executives Attends AED’s Leadership Conference
E
merging leaders from equipment dealerships across back to the next generation of industry leaders.” North America came together to improve their business He said it’s also a time for peer-to-peer networking among leadership skills and network with others in similar positions at the AED’s annual Leadership Conference, which was held Aug. 25-27 in Napa, California. The AED Leadership Conference is the best event for young professionals in equipment dealerships to develop their management skills, learn about all aspects of equipment distribution and meet dozens of their peers from across North America. Phil Riggs, west regional manager for AED, said the three-day conference exposed nearly 70 participants to a mixture of educational topics and networking activities. Some of this year’s topics included legal issues facing Young professionals in the construction equipment distribution industry learn dealerships, leadership skills development, leadershipvaluable skills at AED’s annual Leadership Conference. succession planning and succeeding in a family business when not in the family. Panel discussions with veterans of the equipment industry were held. those from dealerships both large and small. Most of the people “There are so many things dealership professionals can take who attend are just getting involved in the industry and have away from it,” Riggs said of the event. “The biggest thing is never met people from other dealerships. Riggs said the conferemployee motivation and morale – having various speakers ence gives them the chance to meet others in similar positions come in and give their take on what makes a good leader. They who may encounter the same problems in their department. can take that back to the dealership with them.” Riggs said this event has been revamped in recent years with In addition to getting the chance to meet up-and-coming leada fresh look, agenda and purpose. He said the event has grown ers from dealerships nationwide, Riggs said many people who’ve and as a result, the resources are greater, and there’s a wider been running dealerships for 20, 30 or even 40 years have the range of speakers and topics covered because there’s more chance to meet with young people in the industry and share their support from dealers. experiences and advice. He said the seasoned dealers often serve The 2016 Leadership Conference is set for Aug. 23-25 at the as panelists and are happy to help younger generations. Four Season Hotel at Mandalay Bay in Las Vegas. Registration “It’s basically passing down wisdom,” Riggs said. “Many is expected to open in early 2016. For more information, call experienced dealer principals love to participate as a way to give 630-574-0650.
AED Seminar to Focus on How to Benefit From Rental Market WHAT’S IN STORE Day One
Session 1: A Maturing Rental Market – Critical to Equipment Distribution? Session 2: Rental Service Is a Process – Profitability Through Process
Day Two
Session 3: Characteristics of a Profitable Rental Fleet Session 4: Case Study Project – Applying What You’ve Learned Cost: $895 for members, $1,595 for nonmembers
As more equipment is entering the market through dealer rental fleets, your dealership needs to be focused on maximizing your rental opportunities and improving your profitability. AED is offering a two-day seminar that will give you insight into the rapidly developing rental channel and how that can turn into profitability for your dealership. Discover how developing a rental channel can add profitability to your dealership and more at the rental-manager seminar, presented by Larry Kaye. This event will be held on Thursday and Friday, Oct. 22-23, at the Nashville Airport Marriott in Nashville, Tennessee. Participants will discuss insights on the U.S. rental market, process improvements in communication, customer satisfaction, rental operations, rental fleets that meet market demands and create profitability, and characteristics of a profitable rental fleet. Departmental managers, senior management, dealers considering a true rent-to-rent fleet and current rental personnel looking for better financial results are encouraged to attend. Registration for one attendee is $895 for AED members, and $1,595 for nonmembers. For more information and to register, visit bit.ly/aedrental.
10 | www.cedmag.com | Construction Equipment Distribution | September 2015
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>> AED hp The Foundation focuses on workforce development
NEW STAFF AT AED
T
he term “workforce development” likely means different things to different people. For example, several years ago, an article was written by Lyn Haralson at the Federal Reserve Bank of St. Louis that provided one set of definitions: 1. A relatively wide range of activities, policies and programs employed by geographies to create, sustain and retain a viable workforce that can support current and future business and industry. 2. Educational institutions and public and private social service providers. 3. Communities and economic developers, on the other hand, approach workforce development from a different view — that which benefits the sustainable economic growth of a community or region. 4. Still another group — employers — have an organizational perspective, focusing on the skills they need to remain competitive in the global marketplace. One thing that stands out is how inter-related and inter-dependent all four definitions are. The other thing that stands out is how these definitions relate on all four fronts to AED’s and the AED Foundation’s missions and initiatives: 1. AED and the AED Foundation have a broad range of initiatives to help our constituents recruit, train and retain employees, strengthening their own and the local workforce. 2. AED Accreditation is based on a “community-based, school-to-work” template. This involves local dealers, colleges and other industry stakeholders working together to meet their mutual needs. This is especially true with regard to skilled workers, especially technicians. High-quality student education is a top priority. AED also offers industry- and position-specific educational opportunities. 3. AED’s efforts in public policy address important issues affecting not just these communities at the local level, but also at the state and federal levels. Foundation initiatives are an excellent example of industry and academia working together for the good of the community. 4. AED and AED Foundation programs offer businesses an excellent opportunity to enhance worker skills and gain industry information to grow and remain competitive. AED workforce programs “work.” Visit the AED Foundation at aedfoundation.org to find out how it can assist you.
Bob Bresson, Membership Development Manager Bob Bresson spent the first 20-odd years of his career in a role that at first glance seems vastly different from what he’s doing today. Since July, he has worked as AED’s membership development manager after over two decades of selling photographic and electronic equipment while pursing his own photography career on the side. While the two may not appear to be related, he said many of the skills from his former profession can be applied in his new role. His job at AED requires Bresson, 49, to bring in new members and work with smaller dealers who have not been members of AED in the past. He said there are currently about 750 members, and his job is to increase those numbers. Bresson has had some early success. Within the first two months on the job, he recruited two new members and received verbal commitments from two more. While “selling” a membership may be different than selling a tangible item, such as electronics or photo equipment, both jobs involve building relationships, talking with people and not being afraid to pick up the phone and reach out to others. While there’s been a learning curve when it came to getting to know the industry and the terminology, he said getting out, meeting people and seeing dealerships has helped with the transition.
Lisa Bajkowski, Communications Coordinator Earlier this year, 22-year-old Lisa Bajkowski was a student at Aurora University in suburban Chicago majoring in communications and minoring in digital marketing. But since August, she’s been on the job as AED’s new communications coordinator. Since earning her degree in May, the Westmont, Illinois, native has spent her time developing campaigns for AED’s big events, creating email campaigns, developing its social media presence and creating print materials for promotion. As she moves forward with her position, she said she hopes to “really expand and develop the brand of AED” through strategic campaigns. While college taught her many of the skills needed for her new position, she said she’s had to learn much of the terminology within the equipment industry. “This position at AED appealed to me because I had most of the skills needed for the job, but there were also some things that would challenge me to learn and grow,” she said. “AED is a type of organization that I didn’t know much about, and it intrigued me to work for an industry that was out of my comfort zone. I was excited to learn about the industry.” In addition, she said she’s enjoying getting to know the people she works with on a daily basis. “Work is more enjoyable when you are surrounded by others who are hardworking, kind and supportive,” she said.
12 | www.cedmag.com | Construction Equipment Distribution | September 2015
Raising the Mark
SMFL has now extended their global reach from Tokyo, Japan, its corporate headquarters, to the United States. We can help you and your customers with retail financing, capital and FMV leases, rental fleet financing and coming soon inventory floorplan products. TO LEARN HOW WE CAN HELP YOU RAISE THE MARK, PLEASE CONTACT Construction and Transportation Finance Group 277 Park Avenue, New York, NY 10172 Jeffrey Whitcomb, Executive Director | 212.224.5478 Bill Mattocks, Director, Program Manager | 212.224.4636
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>> READY TO ORDER
K-Tec Introduces World’s Largest Construction Pull Scraper
Gradall Industries Introduces Series V Excavators with Volvo Engines Gradall’s new Series V hydraulic excavator models include an upgrade to Tier 4-Final compliant diesel engines acquired in an arrangement with Volvo Penta. Tier 4 Final-compliant five- and eightliter diesel engines meet the demanding Stage IV (EU) and Tier 4 Final (US) emission reduction requirements. In addition, fuel efficiency is improved by up to 5 percent. The Gradall models with the new engines include Crawlers – XL 3200 V, XL 4200 V and XL 5200 V; On/off highway – XL 3300 V, XL 4300 V and XL 5300 V. Series V Gradall excavators in its crawler and on/off pavement wheeled model categories will be available this year, while Series V highway speed wheeled excavators will be available later. Along with the new engine, Series V excavators include an upgraded high-performance, high-reliability 24-volt electrical system, creating a better power source. An operator safety option provides rollover protection that meets safety test requirements and is integrated within the existing cab structure, without external support. The design of the boom and chassis create a compact, low-working profile, allowing machines to work under bridges, in tunnels, beneath trees, on the ground floor of parking lot and building construction sites and roadside jobs without obstructing traffic. The powerful telescoping boom design delivers constant boom forces and speed throughout the dig cycle an advantage over conventional knuckle booms. With the ability to precisely position a host of attachments for optimum productivity with a variety of challenges, the entire boom tilts up to 220 degrees with full boom power — another advantage over conventional excavators’ boom-end tilt attachments that sacrifice power. For more information, visit www.gradall.com. 14 | www.cedmag.com | Construction Equipment Distribution | September 2015
K-Tec Earthmovers recently launched its largest construction pull scraper for massive scale earthmoving. According to the company, the K-Tec 1263 ADT is the world’s largest earth-moving scraper on the market today. With a heaped capacity of 63 cubic yards (ISO) and empty tare weight of 61,000 pounds, the K-Tec 1263 ADT is built for massive dirt moving projects. Designed to be pulled with a 40-ton-plus articulated dump truck, the hitch system transfers 32 percent of the scraper load weight directly to the point where the truck is designed to carry weight. An exclusive digital display screen in the cab provides visual operating details, tracks load count productivity and troubleshoots service issues. The 1263 ADT has a bolt-together design that enables overseas container shipment. To maximize the 1263’s capacity, a push dozer in the cut is recommended to utilize the standard roller push-block innovation (an exclusive feature in today’s scraper market). Additionally, for contractors with excavators, the K-Tec 1263 ADT works as a haul wagon with the large target area, making for easy and efficient loading. The K-Tec 1263 ADT was enhanced from its predecessor, the K-Tec 1254 ADT. The extra 9 cubic yard capacity comes from a 15.25 foot long bucket and larger gate belly to contain more material. The K-Tec is designed to meet the needs of large contractors. K-Tec’s scraper models range from 25- to 63-cubic yard capacity and are backed by a three-year structural warranty. Rapid cycle times and superior flotation maximizes performance. For more information, visit www.ktec.com.
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>> READY TO ORDER Atlas Copco Introduces New Plug-And-Light Tower Atlas Copco’s new QLB 02 light tower providies flexible lighting solution for events, public spaces and general construction requirements. With four 400W metal halide luminaires, the QLB 02 can safely and effectively illuminate an area of up to 2,000m2t. The new light tower provides complete flexibility by allowing users to easily plug into any power source including auxiliary power, electrical generator or directly into the grid. The individual luminaires can be manually adjusted to ensure light is provided only where needed, helping to ensure energy efficiency and reduce unnecessary costs. For large sites, up to four QLB 02 light towers can be connected to a single power
source, providing users with complete control over their lighting requirements. An optional programmable timer allows users to choose from 84 on/off programs to achieve the desired lighting requirements – including the ability to program the light to auto start in the mornings and shut off in the evenings. With a manual lifting system, users can raise the 7-meter mast to the desired height to achieve maximum luminosity. The four stabilizers make sure that the light tower is sturdy, whether on flat or uneven ground, and can withstand winds up to 80 km/h. The rugged frame and metallic canopy provide additional protection for the unit. For more information, visit www.atlascopco.com.
New Book Focuses on Excellence in Dealer Performance Achieving Excellence in Dealer/Distributor Performance, by Walter McDonald, is a 374-page management guide that examines the critical profit variables essential to financial success. Based on decades of experience in over 2,650 equipment dealer management workshop presentations worldwide, McDonald defines and expands each revenue center performance metric. He includes practical “how-to” guidelines, case studies of highperformance dealers and occasionally, horror stories that could have been avoided. Best practices for machinery sales managers and product support managers define the tools, policies and procedures essential to create value and deliver profitable market share gains. The book is a refresher for senior managers and a useful guide for dealer and OEM managers on the way up. A complimentary Reader’s Guide is available by contacting McDonald at walt@mcdonaldgroupinc.com or 847-340-5518. Order at Amazon.com. Quantity purchases available from The McDonald Group. For more information, visit www.mcdonaldgroupinc.com. 16 | www.cedmag.com | Construction Equipment Distribution | September 2015
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>> READY TO ORDER Penton’s Launches First Heavy Equipment Residual Value Report Penton‘s EquipmentWatch, a provider of data, software and insights for the heavy equipment industry, has published its first Heavy Equipment Residual Value Report. The introductory 2015 report supplies the industry’s first source of precise, data-driven residual values. Additionally, EquipmentWatch has also launched a new consultative service to provide residual values solutions for large scale customers. The premium report is included in the subscriptions of current EquipmentWatch Values subscribers, but is also purchasable by nonsubscribers for $750. Residual values for construction, lift truck and agricultural equipment are estimated out to five years, and represent a percentage of current resale (FMV) and auction (FLV) value. The report also sets benchmarks and highlights the top three models by sales in 10 product categories (wheel loaders, crawler excavators, skid steers, crawler dozers, backhoes, pneumatic tire lift trucks, telescoping boom rough-terrain lift trucks, balers, combines and mowers/shredders). Leading brands represented in the data include Caterpillar, Deere, Komatsu, Case, Clark, Toyota, JCB, Massey Ferguson, New Holland and Kubota. For more information visit www.equipmentwatch.com.
XCMG Launches Its First Fully Remote-Controlled Intelligent Excavator XCMG, the world’s fifth largest construction equipment company, recently unveiled the XE15R hydraulic intelligent excavator, its first fully remote-controlled excavator, signaling a new phase in its intelligent excavator series. Without a cab, XE15R is the company’s smallest excavator at 1.35 meters in height and 1.08 meters in width. Nicknamed “Little Swan,” the machine is agile and flexible in challenging working conditions. The newly developed XE15R features a wireless control function with a 100-meter range, and integrates mechanic, electronic and hydraulic control technology with a CAN bus interface design. Unmanned driving reduces labor intensity, which is particularly useful in severe operating environments, such as toxic conditions or extreme temperatures. As an intelligent excavator, XE15R also features a self-learning 18 | www.cedmag.com | Construction Equipment Distribution | September 2015
function. It can save operating maneuvers and then replay them automatically on request, a breakthrough that further ensures security, agility and reliability in operation. The launching of XE15R expands XCMG’s product line, and improves its customers’ construction quality, providing them with a more human-friendly working environment and better project solutions. Based on its global collaborative development platform, XCMG devotes more effort into the research and development of core hydraulic parts and intelligent technology, and successfully applies its research achievements to its excavators and other product series. At present, XCMG’s excavator series ranges from 1 to 400 tons. Its XE4000, the first 400-ton crawler-type all-hydraulic excavator made in China, was awarded the domestic 2015 TOP 50 Technological Innovation Gold Award. The steel giant is perfect for heavy-load mine operating conditions and reduces power consumption by 8 percent. Its human-friendly design relieves the boredom of long-term operation. As XE15R rolls off the assembly line, XCMG’s intelligent products reach a new level. For future development, XCMG will continue to look into smart manufacturing and intelligent products. For more information, visit www.xcmg.com/ en-us.
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>> INDUSTRY BEAT New Definition of Employee-Employer Relationship May Have Dealers Rethinking Outsourcing In an Aug. 27 ruling against the waste management firm Browning-Ferris, the National Labor Relations Board (NLRB) redefined the employee-employer relationship. The new definition will make it harder for companies with franchises and independent contractors to avoid offering protections and benefits. It will also give unions more negotiating power and make contracting companies more vulnerable to legal action. In the decision, the board determined that Browning-Ferris should be considered a “joint employer” with a staffing agency contracted to support its California recycling facility. Under this new status, the company could be pulled into collective bargaining negotiations or held liable for labor violations committed by the direct employer. The International Franchise Association (IFA) is leading a charge against the NLRB. IFA President Steve Caldeira is confident the new standard “will be rejected by local franchise owners, legislators and, ultimately, the courts.” For AED members who contract services – from janitorial support to sales or maintenance – joint employer status would mean increased possibility of lawsuits, employee unionization and the use of “economic weapons” such as pickets and protests.
Scott Equipment Takes Delivery of 1000th GR-1000 XL Rough Terrain Crane
Scott Equipment held a ceremony recently in celebration of a new rough terrain crane. The ceremony was attended by Roger Rivera, manager of the Baytown, Texas, store; Curley Bordelon, executive vice president; and Scott Cummins, president.
Scott Equipment of Monroe, Louisiana, recently took delivery of a special Tadano GR-1000XL rough terrain crane in Houston. The crane was the 1,000th unit of the popular Tadano crane model produced at the Shido manufacturing plant in Japan. Despite early production delays due to the March 2011 Japan earthquake, the milestone was reached in just under four years. “Scott Equipment is a major player in the sales and rental of rough terrain cranes in the Gulf Coast market and an impact partner for Tadano,“ said Yo Kakinuma, president and COO of Tadano America. “Taking delivery of this crane underscores our long-standing working relationship and commitment to Scott Equipment.”
BigRentz, Skyworks Equipment Rental Donate Equipment for Bushwick Collective’s New Mural BigRentz, an online construction equipment rental business, recently announced its collaboration with New York-based equipment rental company, Skyworks Equipment Rental, to donate equipment to be used in the production of the Bushwick Collective’s latest mural in Brooklyn, N.Y. The curator of the collective is Joseph Ficalora, a Bushwick native who decided to transform the streets of his urban community
into a gallery of street art after the deaths of his mother and father. What began as a single mural has grown into an international sensation, and now features well-known artists from around the world who come to Brooklyn to contribute to the growing artistic movement. BigRentz is donating equipment to be used in the production of the a Bushwick Collective mural..
20 | www.cedmag.com | Construction Equipment Distribution | September 2015
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>> INDUSTRY BEAT Bobcat Company to Expand Headquarters in West Fargo, N.D. Bobcat Company and parent organization Doosan recently broke ground on a $9.5 million company headquarters expansion in West Fargo, North Dakota. Speaking at the ceremony were West Fargo Mayor Rich Mattern, U.S. Sen. John Hoeven of Wisconsin, North Dakota Gov. Jack Dalrymple and Rich Goldsbury, president of Bobcat and Doosan, North America. Company officials say the expansion to the existing facility will help accommodate growth, drive innovation and improve operations. Expected to be completed in late summer 2016, the expansion will double square footage and employee capacity. Bobcat and Doosan will pursue Leadership in Energy and Environmental Design certification for the facility in both design and construction. Speaking at a ceremony celebrating the expansion of Bobcat’s headquarters are, from left, West Fargo Mayor Rich Mattern, Sen. John Hoeven of North Dakota, North Dakota Gov. Jack Dalrymple and Rich Goldsbury, president of Bobcat and Doosan, North America.
Kubota Tractor Opens New Distribution Facility in Kansas
A ceremony was held in August in Edgerton, Kansas, to celebrate Kubota Tractor’s new distribution facility. The 765,000-square-foot North American Distribution Center will serve as the primary distribution hub for Kubota parts and whole goods distribution across the U.S. and Canada. The central location improves Kubota’s access to its 1,100-strong dealer network, expanding overnight delivery services, improving shipping speed and accelerating response times. Additionally, the facility will serve as a regional sales office for the company’s northern district within its central division.
Franklin Equipment recently announced the opening of its new Indianapolis location.
Franklin Equipment Opens New Facility in Indianapolis
From left, Donald Roberts, mayor of Edgerton, Kansas, Masato Yoshikawa, Kubota Tractor Corp. president and CEO, and Kansas Gov. Sam Brownback commemorated the grand opening of Kubota’s new distribution facility Aug. 11 in Edgerton, Kansas. 22 | www.cedmag.com | Construction Equipment Distribution | September 2015
Franklin Equipment recently opened a new location in Indianapolis. The company offers a large inventory of rental equipment along with retail sales of both new and used construction equipment. Additionally, the location will offer parts and certified technicians to service any equipment brand. “The Indianapolis area has been growing quickly and we believe our Franklin Equipment brand of high quality customer service, along with our new rental fleet, will benefit this market in many ways,” said Tony Repeta, general manager at Franklin Equipment. “Construction remains strong in the area, which is a good indicator for the demand in equipment purchases and rentals.” Franklin Equipment rental equipment includes backhoes, skid steers, track loaders, compact excavators, scissor lifts, telehandlers, light equipment, wheel loaders and a wide range of attachments along with handheld equipment and safety gear.
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>> INDUSTRY BEAT Western Pacific Crane & Equipment Opens New Facility Western Pacific Crane & Equipment recently announced the opening of its location in Arlington, Washington. The new facility, which includes an upgraded warehouse, is 23,000 square feet and sits on 4 acres. The warehouse features complete in-house capabilities, including blasting and painting, and is Elite-status certified by Manitowoc for its replacement parts inventory levels, modern tooling and the ability to perform complicated repairs. “We are proud to open this new cutting-edge facility,” said Bob Johnson, president of Western Pacific. “As the West Coast’s only authorized Manitowoc, Grove and National crane dealer, we are adding a broader range of capabilities with this facility to better serve our customers.” Randy DeFosse, general manager for the Northwest region, will oversee the new facility. “Our goal is always to find ways to give our customers faster service and better parts availability. This new location features both a state-of-the-art parts warehouse, along with a leading-edge service center to support Western Pacific customers,” said DeFosse.
Western Pacific Crane & Equipment has opened a new, 23,000-square-foot facility in Arlington, Washington.
“The new Arlington facility gives us the tools to stay at the forefront of meeting our customers’ needs for parts, service and sales,” he said.
INDUSTRY NEWS Manitowoc, a global company specializing in products for the food service and construction industries, recently announced plans to separate its cranes and food-service businesses. Manitowoc, which is based in Manitowoc, Wisconsin, anticipates that the separation through a tax-free spinoff of the food-service business will take place in the first quarter of 2016. The company believes separation will allow each company to focus on its unique growth profile, product categories, distribution systems and strategic priorities. The company has not yet announced any possible name changes. The separation remains subject to the approval of the Manitowoc Board of Directors and other conditions.
Takeuchi-US will expand its Pendergrass, Georgia, operations by building a new distribution facility on its existing campus. The new facility, which is scheduled to be completed by the end of 2015, will increase the storage space by over 40 percent and provide additional parts and machine storage for future growth through 2019 and beyond.
is implementing a leaner business model, employing a light-assets and sourcing concept to fulfill customer demand while sustaining improved operating results. As an earlier initiative, Metso closed the manufacturing operations at the Lachine manufacturing plant in Quebec in the first half of 2015, affecting 191 employees.
Manitou is dropping the CE Attachments name in favor of the EDGE brand name on attachments for Gehl and Mustang products. Since the merger of Compact Equipment Attachments Inc. into Manitou Americas Inc. in 2013, EDGE has emerged as the primary brand name associated with attachments needs for Gehl and Mustang products.
IronPlanet and Finning International agreed to jointly market used heavy equipment through Cat Auction Services, IronPlanet’s unreserved auction marketplace. Finning will host IronPlanet’s first Canadian Cat Auction Services live unreserved public auction on Wednesday, Oct. 21, in Edmonton, Alberta.
Metso recently announced the planned closure of the manufacturing operations at the York, Pennsylvania, plant by March 31, 2016. The decision affects approximately 80 current employees at the plant. Metso’s other business operations operating out of the York offices will not be affected. Metso
Trimble recently unveiled a 3D grade-control solution for Bobcat all-wheel steer loaders, compact track loaders and skid-steer loaders. This is the first 3D solution for Bobcat equipment. Using digital 3D models prepared in Trimble’s Business Center, the Trimble GCS900 system is ideal for footpaths, parking lots and sidewalks. The system includes the ability to sync files wirelessly to the machine, track assets and site productivity, and receive remote support or training. The Trimble GCS900 3D system is available as an upgrade from the 2D laser-guided and sonic/slope systems already offered by Bobcat.
24 | www.cedmag.com | Construction Equipment Distribution | September 2015
Continued on next page
>> INDUSTRY BEAT INDUSTRY NEWS Groff Tractor New Jersey LLC has entered into an agreement with RUBBLE MASTER to sell its full line of compact crushing and screening equipment. The company is authorized to distribute the RUBBLE MASTER line in Delaware, Maryland, New Jersey, New York, Eastern Pennsylvania and Virginia. JCB has named Jungclaus Implement, of Glencoe, Minnesota, to its dealership network. Jungclaus’ line of JCB equipment includes articulated wheel loaders, rough terrain forklifts, compact Loadalls, compact wheel loaders, skid-steer loaders and highspeed Fastrac agricultural tractors. Gehl, a manufacturer of compact equipment for agriculture and construction, recently welcomed Jordan Implement to the Gehl dealer network. Jordan Implement provides sales and service to Southern Wisconsin for Gehl skid loaders, track loaders, compact excavators and articulated loaders. Kern Machinery, a John Deere dealership with stores across California, recently completed the purchase of Hollingsworth Inc. The newly acquired locations in Ontario, Oregon, Weiser, Idaho, and Burns, Oregon, are now doing business under the name Camp Equipment. Charter Software provided the Windows-based management software for Kern Machinery/Camp. Charter Software’s business management system, ASPEN, was also certified last month on two additional interfaces with AGCO Corporation. The first certification relates to parts ordering integration between AGCO Solutions Online and ASPEN, and the second certification relates to the reporting of Canadian taxes through Charter’s already certified AGCO+ Plus revolving credit integration.
in the news Ken Lousberg has been appointed president of Terex Cranes following the departure of Tim Ford. Lousberg was president of Terex China. In addition to retaining responsibility for operations in China, Lousberg will be in charge of the company’s Latin American operations. Terex will also hire a leader for the China operations. Additionally, George Ellis was named senior vice president of operations Ken Lousberg planning and president for Terex Construction while retaining responsibilities for overseeing government programs and operations in India for Terex Construction. Ellis will assume global responsibility for the Terex Business System, sourcing, Scott Hensel George Ellis transportation, logistics and manufacturing footprint. In other Terex news, Scott Hensel was named to the newly created position of vice president and managing director of Terex Utilities and Services, reporting to Lousberg. He was formerly vice president of Terex Services North America. The board of Sandvik and Olof Faxander, president and CEO, recently agreed that Faxander would leave his current position and the company. He had been the president and CEO of Sandvik since 2011. Björn Rosengren will succeed Faxander, effective Nov. 1. Mats Backman, executive vice president and CFO, will be acting president and CEO in the interim. Rosengren is currently the president and CEO of Wärtsilä Corporation. He previously held several management positions at Atlas Copco.
David Spille
Rick Alexander
Shaun Meeks
David Spille has joined Southeastern Equipment Co. as parts manager at the Burlington, Kentucky, branch. Richard Alexander will fill the role of parts associate at the Gallipolis, Ohio, branch. Joining him at the Gallipolis branch is Shaun Meeks, an outside sales representative. His primary responsibility is selling the equipment lines the branch represents, which include CASE, Kobelco and Gradall.
September 2015 | Construction Equipment Distribution | www.cedmag.com | 25
>> INDUSTRY BEAT
in the news Altaaqa Global, a leading global provider of large-scale temporary power services, appointed energy industry veteran Julian Ford as chief commercial officer (CCO), effective July 1. As the company’s CCO, Ford will work to ensure that Altaaqa Global achieves revenue growth targets and overall commercial success, and facilitate the formulation Julian Ford and implementation of innovative global commercial strategies. Ford had a hand in introducing the concept of power project rental to governments of developing economies, which allowed them to hire power capacity to address short-term energy issues during times of hydropower shortage or other generation or transmission issues.
Karla Dobbeck, of Human Resource Techniques Inc. (HRT), of Algonquin, Illinois, recently announced that her company has been certified as a Woman Business Enterprise, which makes it possible for clients who are federal contractors to allocate the work they do with HRT to their contracts. Human Resource Techniques Inc., which was founded in 1997 by Dobbeck, Karla Dobbeck is a consulting firm that helps small to midsize companies improve their human resource skills and techniques.
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26 | www.cedmag.com | Construction Equipment Distribution | September 2015
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In Memoriam
Duane Wilder, 62 Aug. 13, 2015 Duane Wilder, 62, died Aug. 13 at in his home in Williamsburg, Virginia. He was a past member of the AED Foundation Board of Directors and a past member of the AED Industry Roundtable. He was born in Alpena, Michigan, and was the oldest son of Shirley (Keetch) and the late Arthur Wilder, and the brother of Darwin and Dennis Wilder. He was a respected businessman who started his career as a young co-owner of Alpena Ford Tractor, before marrying and moving to Iowa to launch a career with J.I. Case Corporation in its manager training program. His work ethic, business sense and friendly nature led to the first of many promotions in his career when he became retail operations manager, North America for J.I. Case in Racine, Wisconsin. He led multiple agricultural and heavy equipment companies to significant growth, including 11 years as President of Liebherr Construction Equipment Co. “Duane’s contributions to AED and the AED Foundation are incalculable. It would be impossible to list them. I don’t think I’ve worked with anyone who was more loyal or committed to the industry and thus to AED,” said Robert Henderson, executive vice president and COO at AED. “Duane was a long-serving Foundation board member when I joined the AED staff. It was clear to me that his vision and leadership were essential components in the past and future success of the Foundation. Duane’s acute wit, irrepressible sense of humor and keen intellect will be sorely missed. Duane was a significant contributor to our industry and a good friend.” He is survived by his wife, Jackie (Morris) and their three children: Samantha Wilder, Cody Wilder, and Nicole Maaguo, along with her husband and their children, Nadia, Olivia and Greyson, as well as numerous nieces and nephews. Memorial donations can be made to Alpena Community College Scholarship Fund for Non-Traditional Students, in lieu of flowers (discover.alpenacc.edu/ about_acc/donate.php). Online condolences may be shared with the family at www.nelsencares.com.
September 2015 | Construction Equipment Distribution | www.cedmag.com | 27
In Memoriam
Lonnie Parker, 62 Aug. 4, 2015 Lonnie G. Parker, 62, an avid supporter of AED with three decades of service at Craig Taylor Equipment Co., died Aug. 4 at his home after a battle with cancer. He was born on June 12, 1953, in La Farge, Wisconsin. Parker joined the Army and was stationed in Alaska. In the early 1970s, after being discharged from the military, he remained in Alaska, settling in Anchorage and worked at Alaska Diesel Electric. After 10 years at Alaska Diesel Electric, he served for 30-plus years at Craig Taylor Equipment Company and retired July 3. He served on the King Career Center Construction Tech Advisory Board and was a member of the Associated General Contractors for 28 years, as well as serving on its Legislative Committee. He is survived by his mother, Gertrude Parker; brothers, Gerry Parker and Lanny Parker, all from Wisconsin; wife, Sam Parker; daughter and son-in-law, D’Ette and Fred Owen; grandsons, Jacob, Luke and Scotty; and greatgrandson, Jace, all from Alaska. He was a surrogate father to Tonya Roe, Shari Morelli and Terry Clark; surrogate grandchildren, Kyle Haysmer, Brittany Juliussen, Anthony Morelli and Ian Clark; and there are many, many more that just called him their favorite uncle. Memorial donations may be made to Maranatha Campground; P.O. Box 520999, Big Lake, AK 99652.
28 | www.cedmag.com | Construction Equipment Distribution | September 2015
>> WASHINGTON INSIDER
CHRISTIAN KLEIN
AED Members Heed Call to Action Equipment distributors prepare lawmakers for a packed agenda.
Members like you are increasing our field’s visibility by building relationships with your lawmakers.
W
ith Labor Day behind us, Capitol Hill is again abuzz as lawmakers return from their August congressional recess to a full agenda. Congress has a number of big-ticket items to consider this fall, including the Iran nuclear agreement, lifting the debt ceiling, funding the federal government, extending expired tax provisions, and completing work on highway and Federal Aviation Administration re-authorizations. While lawmakers will be busy, they also will be better prepared because of the efforts of equipment distributors around the country. Since the beginning of 2015, AED members have heeded the association’s call to action, hosting facility visits by dozens of members of Congress and their staff. Equipment distributors are educating elected officials about the construction equipment industry’s legislative priorities and raising the sector’s visibility among policymakers. Contact AED’s Washington office to add to the list of visits members of Congress have made in 2015, including: Rep. Lou Barletta of Pennsylvania and his district director to Highway Equipment & Supply in Harrisburg, Pennsylvania Rep. Mike Bost of Illinois to Roland Machinery Co. in Carterville, Illinois Rep. Dave Brat of Virginia to James River Equipment and Carter CAT in Mechanicsville, Virginia Rep. Carlos Curbelo of Florida to Kelly Tractor in Miami Rep. Tom Emmer of Minnesota to Road Machinery & Supply in Savage, Minnesota Rep. Blake Farenthold of Texas to H&V Equipment in Corpus Christi, Texas Rep. Mike Fitzpatrick of Pennsylvania to
Ransome CAT in Bensalem, Pennsylvania Rep. Crescent Hardy of Nevada to APCO in North Las Vegas, Nevada Rep. French Hill of Arkansas to Vermeer MidSouth in Little Rock, Arkansas Rep. Doug Lamborn of Colorado to 4 Rivers Equipment in Colorado Springs, Colorado Utah Rep. Mia Love’s district director to Wheeler Machinery in Salt Lake City Rep. Cathy McMorris Rodgers of Washington state to Clyde/West in Spokane, Washington Rep. Mark Meadows of North Carolina to James River Equipment in Asheville, North Carolina Rep. Erik Paulsen of Minnesota to RuffridgeJohnson in Minneapolis Rep. Joe Pitts of Pennsylvania to Groff Tractor in Ephrata, Pennsylvania Rep. Reid Ribble of Wisconsin to Kelbe Bros. Equipment in Butler, Wisconsin Rep. Phil Roe of Tennessee to Stowers Machinery in Kingsport, Tennessee Rep. Bill Shuster of Pennsylvania to Romco Construction Equipment in Fort Worth, Texas Utah Rep. Chris Stewart’s staffer to Wheeler Machinery in Salt Lake City Sen. Dan Sullivan of Alaska to CMI Equipment in Anchorage, Alaska Pennsylvania’s Sen. Pat Toomey’s state director to Stephenson Equipment in Harrisburg, Pennsylvania The visits provide an excellent opportunity for lawmakers to see firsthand how the votes they cast on infrastructure, tax and regulatory issues affect businesses and workers “back home.” Many more visits are on the books for September and October. Get engaged today. n
CHRISTIAN KLEIN is AED’s vice president of Government Affairs. He can be reached at caklein@aednet.org and
703-739-9513.
September 2015 | Construction Equipment Distribution | www.cedmag.com | 29
>> TECHNOLOGY 101
BRIAN REHG
Open Source Software (OSS) Can Open the Door to Growth
OSS technology allows various software programs to communicate with each other.
The best thing about making the switch to open source is that you can try it for free.
T
he term “open source software” is becoming a popular phrase in the business world, but many people don’t know exactly what it means. Open source software (OSS) is unique because its source code is available, allowing it to be developed in a collaborative manner. It is commonly used with cloud-based software development, as well as for Customer Resource Management (CRM) software and Enterprise Resource Management (ERP) software, two key components for any growing business. More and more companies are starting to take advantage of this type of software due to its many benefits over commercial software, which include cost-efficiency, customization and the ability to integrate into a company’s existing systems. ZDNet reports that 78 percent of companies use OSS, including large companies such as Microsoft. The popular mobile operating system Android is even a derivative of OSS. This type of software is sometimes free, and a company’s IT team or a hired third party can modify the core code so that the software fits your specific business model. With this software, all of your software systems can easily communicate, and most open source software allows for easy connections via a built-in interface or small custom code
modifications. Despite its recent rise in use, the OSM has been in commercial use since the 1970s. I have been working with it for the past 25 years. While working for the Department of Defense (DOD), we took advantage of free software, and the DOD loved that we had the ability to modify the core files to add in advanced security methods. I also assisted MasterCard and A.G Edwards in modifying and maintaining their OSS objectives. All three of those organizations stored their sensitive data on open source operating servers to bypass the vulnerabilities with servers running on commercial software. My current project is assisting a global materials handling company in converting to a new open source ERP software, known as Odoo. My team will modify Odoo to fit the company’s exact needs, as well as tie it into all existing systems. This same client also uses an open source e-commerce platform, called Magento, allowing their dealers to order equipment online. One of the most significant reasons that companies are moving to OSS is the cost. The license cost to purchase and maintain commercial software is stifling for many companies, and the price of support can be enormous for commercial software packages. Corporations don’t want to be forced into whatever direction a commercial software vendor decides to take the software or pay for expensive upgrades. The best thing about making the switch to open source is that you can try it for free. Since there is no upfront cost, you can install and run the software with your current software application to perform a side-by-side evaluation. It will allow your business to stay current and competitive as it grows. n
BRIAN REHG is CEO and founder of Blue Stingray, a web and mobile application development agency. As a former software engineer with over 20 years of development experience, Rehg stays up-to-date on emerging business technologies and is an active member of several local business associations. 30 | www.cedmag.com | Construction Equipment Distribution | September 2015
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>> REGIONAL REPORT KRISTIN CROOKS
Visits to South Central Region Bring Awareness to an Important Association Goal
During my travels, it’s also been a key effort to hold congressional visits between governmental representatives and several AED members.
T
he last half of summer has been a fantastic time for meeting and working with a variety of member dealers, schools and legislative leaders in the Associated Equipment Distributors’ (AED) South Central Region. As I’ve been on the road over the last two months, I’ve had the pleasure of visiting 18 AED members throughout Texas, Louisiana, Arkansas and Oklahoma. It is my goal to continue this outreach throughout those states. I understand the importance of making personal connections, and how being able to put a face with a name on both sides can strengthen the relationship between AED and our members. My visits have provided wonderful opportunities to learn more about what members want and need from their AED membership. An important goal at AED is to be able to increase the association’s ability to work on behalf of our members, conducting outreach to legislative leaders, developing new relationships with technical colleges to give our dealer members more access to well-trained employees and so much more. During my travels, it’s also been a key effort to hold congressional visits between governmental
From left, Dennis Vander Molen and John Riggs meet with Rep. French Hill of Arkansas at Vermeer MidSouth. 32 | www.cedmag.com | Construction Equipment Distribution | September 2015
representatives and several AED members. Such face-to-face interaction builds understanding of our members’ work and educates representatives about the legislative needs of the heavy equipment and construction industries. In the past two months, it’s been my pleasure to host congressional events in both Corpus Christi, Texas, and Little Rock, Arkansas. A personal goal of mine is to enhance the AED member experience through educational meetings and political advocacy. Perhaps the most important aspect of my recent travels throughout the South Central Region has been coordinating visits with a number of schools offering technical training related to the industry. Such visits allow AED to maintain the quality of educational programs taught to professional staff who, in turn, prepare the well-trained technicians needed by our members. In the course of five weeks, I was involved in four different college visits that will ultimately help AED increase standards for graduating technicians. I look forward to meeting more of our members throughout Texas, Oklahoma, Arkansas, Mississippi and Louisiana. Looking ahead, members should begin making plans to attend the AED Summit 2016 in Washington, D.C. Next year’s summit will take place Jan. 19-22 at the Gaylord National Resort and Convention Center, and will feature exciting events, exhibits, speakers and more. Registration for AED Summit 2016 is now open. Visit www.aednet. org/summit/ to learn more. n 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.
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>> COVER STORY
ICUEE 2015
I
Louisville Gearing Up for the Best Show Yet
t is official: The 2015 International Construction & Utility Equipment Exposition (ICUEE) will be the largest on record, according to the organizers of the popular event. There will be more than 27 acres of exhibits and a record 900-plus exhibitors, including more than 200 companies new to the show. In addition, the live demonstrations and hands-on experiences 34 | www.cedmag.com | Construction Equipment Distribution | September 2015
throughout the show will also help ICUEE attendees make informed purchasing decisions. Equipment at ICUEE includes (but is not limited to) all-terrain carriers, attachments, components, earthmoving, environmental, light, overhead and maintenance, material handling, recycling, safety, testing, transportation, trenching, trenchless and trucks and utility materials/
supplies. Machinery is exhibited in job-like conditions and attendees can experience equipment in action, working at ground level, underground and overhead. Attendees will find it easier than ever to get around at ICUEE with new and improved transportation options, more places to take a break and a better organized show floor.
>> COVER STORY “This will be an unparalleled shopping experience for utilities and utility contractors, with more new exhibitors, new products and new demos adding real value,” show Director Sara Truesdale Mooney said. ICUEE, also known as The Demo Expo, is the largest event for the utility industry, owned and produced by the Association of Equipment Manufacturers (AEM). The show brings together industry professionals to gain comprehensive insights into the latest technologies, innovations and trends affecting their industry. “We know it’s a big show, with so much to see and do,” said Mooney. “We wanted to help attendees focus on the products and education that will mean the most to their businesses, and we also wanted to make the show experience more fun.” Attendees can preplan their show visit using the online exhibitor directory/show planner, and their personalized itinerary of exhibitors, education and other events will link to the ICUEE show mobile app as well. Itineraries can be updated preshow and onsite. The mobile app sponsor is Caterpillar. The exhibitor directory/show planner is searchable and includes a new products and technologies preview, demo schedule, education lineup, list of new exhibitors and show maps. “ICUEE attendees asked us for specific upgrades to enhance their show experience and make the most efficient use of their time, and ICUEE 2015 has delivered with new and improved services,” Mooney said. n
AED Members at the Show Page 36
ICUEE 2015 Exhibits Demonstrations Education Networking Kentucky Exposition Center in Louisville, Kentucky Sept. 29-Oct. 1 8:30 a.m. to 5 p.m. Tuesday-Wednesday 8:30 a.m. to 2 p.m. Thursday
More information: www.icuee.com
September 2015 | Construction Equipment Distribution | www.cedmag.com | 35
>> COVER STORY
Visit these AED members at ICUEE 2015 Amphibious Vehicles by Hydratek, Inc.
Booth N1017 www.hydratrek.com Contact: Craig Simonton, craig@hydratrek.com, 901-237-2256 Hydratrek, Inc.manufactures an elite line of multipurpose amphibious vehicles. These vehicles are used to gain access into remote wetland regions of your projects for maintenance, inspections, search and rescue, flood mitigation, transportation of personnel and materials and GPS mapping. This is not Argo. Dealers are wanted in select markets.
Excavator Forestry Head, Skid-Steer Forestry Head by Diamond Mowers
Booth 1024 www.diamondmowers.com Contacts: Tim Kubista, 651-955-6665, tkubista@ diamondmowers.com; Jason Kippes, 605-553-1717, jkippes@diamondmowers.com Diamond Mowers will be featuring two new products at ICUEE 2015: its new Excavator Forestry Head and new Skid-Steer Forestry Head. These products are both in addition to its traditional rotary mowers. Diamond Mowers’ 36-, 48- or 60-inch Excavator Forestry Heads are designed exclusively for brush-cutting applications. Diamond’s unique design includes teeth on the perimeter of the blade, as well as cutting teeth and knives on the bottom of the disc to allow the head to come straight down on top of trees. They cut up and 36 | www.cedmag.com | Construction Equipment Distribution | September 2015
mulch up to 12 inches of material up to 10 times faster than a rotary head. They are highly efficient, hardened steel and have replaceable teeth. Diamond Mowers’ 60inch Skid-Steer Forestry Head cuts 14 inches of material and mulches up to 6 inches of material. Unlike a drum style, Diamond’s forestry head throws material away from the machine, produces chips that don’t clog filters and isn’t limited to the hydraulic horsepower of the machine. Diamond’s Skid-Steer Forestry Head also comes equipped with hoses and half-inch couplers - so that you’re ready to work.
Rototilt Attachment Demo, Full Product Line by Rototilt Booth K222 www.rototilt.us Contact: Gerry Mallory, gerry. mallory@rototilt.com, 519754-2171 Rototilt, Inc. will have a live demonstration of its Rototilt attachment, plus a static display of its full product line.
Skid Steers and Compact Track Loaders by JCB Booth K175 www.jcb.com Contact: Dallas Reeves, dallas.reeves@jcb.com, 912-447-2000 JCB’s Skid Steer and Compact Track Loaders feature a unique PowerBoom design that improves visibility by 60 percent and makes it easier and safer to enter
and exit the machine. Thirty attachment families provide optimum versatility yearround. Switching attachments is a snap thanks to a standard universal mechanical hitch or an optional hydraulic quick hitch. A rear service door offers easy access to the engine and daily checkpoints.
Insero AMP by Insero
Booth N1011 www.inseroequipment.com Contact: Brad Hilton, bhilton@inseroequipment. com, 402-830-6721 Visit Insero Equipment’s booth to learn about the all-in-one Insero AMP, a multipurpose product that incorporates hydraulic, pneumatic and electric power on a skid steer base. The Insero AMP is the only one of its kind available on the market. It promotes higher productivity and increases equipment utilization.
Introducing the Carbide Cutter G3
Planer Carbide
Booth N3008 www.prinoth.com Contact: Doug Little, 819-421-3099 Learn how the newest member of the Prinoth carrier lineup, the Panther T16, is best suited for your industry. The new Panther carrier generates extremely low ground pressure even at maximum capacity of up to 15,200 kg (33,500 pounds). Through optimum load distribution over its innovative and Prinoth-exclusive chassis design, the new Panther T16 can be outfitted to work in any sector.
Expanded Lineup by Terramac
Booth N2030 www.terramac.com Contact: Matt Slater, matts@terramac.com, 630-380-1519 Visit the Terramac booth to learn more about its expanded lineup. Play its Cast for a Cause game and Terramac will donate funds to the Pat Tillman Foundation.
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September 2015 | Construction Equipment Distribution | www.cedmag.com | 37
>> CONTRACTOR CONNECTION
JOANNE COSTIN
Construction Company Owner Has High Expectations for Dealerships Bruce Wendorf wants dealers to make him feel like he’s their only customer.
M
ost of us are narcissistic,” said Bruce Wendorf, fleet, and these days, they are working 12-hour days to keep referring to his fellow contractors.“We only up. care about us. We don’t care that you took care “We ask for help from the dealer when we need it,” of that guy. Take care of me.” Wendorf said. Wendorf, president of Forsberg Construction and While he has been approached by dealers about PM current chairman of the National Utility Contractors Asso- programs, he said the dealers don’t really push it. “While ciation (NUCA), recently shared his thoughts with CED on it might be useful, the programs cost more money,” he construction-equipment dealers, as well as the current state said. “After the initial call about the program, they never of the utility construction market mentioned it again.” Forsberg Construction in Southwest Florida. By owning and maintaining a fleet, Wendorf hopes to Forsberg operates a mixed be more competitive. This strategy afforded the company Fleet Size: 66 earth-moving machines construction-equipment some flexibility during the last recession. “We get to Headquarters: Punta Gorda, Florida fleet of approximately 66 determine the rental rate to ourselves,” Wendorf said. “If we Markets: Highway construction, site earth-moving machines – are efficient, we can lower our rental rates to ourselves and preparation, utility construction with Caterpillar, Volvo and be more competitive.” Deere being the predomiWhen labor is at a premium, it’s even more nant brands. Only 5 percent of its fleet is rented. important for contractors to keep machines up and The company is involved in site development for running. commercial properties, as well as road construction “Everyone is relying on me, the manager or the and public utility work. Current projects include the owner of the company, to make sure the equipment is widening of Midway Boulevard in Charlotte County, working so that guys can get their paycheck at the end Florida, and Boca Royale Unit 12, a private residential of the week with 50 hours. That is all they care about. If development in Englewood, Florida. I have three pieces of equipment down “Most of us are Wendorf said the market is currently and tell the guys to go home early, they being driven by a continued thirst for new going to look for work somewhere narcissistic. We only are housing, as well as commercial developelse.” ment. “We have more work than we can do care about us. We What is he looking for in a service right now,” he said. department? Attitude is important. don’t care that you Finding heavy-equipment operators “When you take a piece to their and skilled and even unskilled labor is the took care of that guy. shop to get fixed, you want to get the biggest challenge for the company, and impression they are looking at your Take care of me.” Wendorf said the company is not alone. machine first,” Wendorf said. “Contractors in this industry have been Purchase Considerations facing a labor shortage for the last few years, Wendorf said all brands are under consideration when he and the trend is expected to continue. The lack of availmakes a purchase. He weighs a lower initial price against able workforce has had a negative effect on the progress potential problems with parts and service down the road. of current projects and prevents many contractors from “I let the price be the first determining factor, then I look bidding some projects altogether,” he said. Wendorf said residential developers are working in much at service and how they treat me as a dealer. I want to feel important to them.” smaller phases than they did during the boom of 2006One of the most important machines in the contractor’s 2007. While the market is productive, it is based on current fleet is the excavator. “The excavator is without question sales, not on speculation or investors. the workhorse of our industry,” Wendorf said. “A strong, Parts and Service Expectations reliable, productive and fuel-efficient excavator, properly Forsberg Construction employs a shop manager and two suited for each specific job, is key to keeping schedules and mechanics to handle the bulk of maintenance duties on its making money.” 38 | www.cedmag.com | Construction Equipment Distribution | September 2015
Bruce Wendorf operates a mixed construction-equipment fleet of approximately 66 earth-moving machines. Only 5 percent of the fleet is rented.
The last equipment purchase he made was two Caterpillar D5K Dozers that were both open cab and low hours. “These two machines were priced right, immediately available for purchase and were the right size for the job.” CAT is the company’s preferred brand for dozers. Reliability is also a factor, and this is where brand experience comes into play. “One of the reasons we recently went with Volvo haul trucks is because we own four
other ones and had them for 10 years. We feel we have spent relatively fewer hours and dollars keeping those maintained versus other brands.” What advice does he have for your sales department? Do your homework. “The salesmen need to be more than just deliverers of quotes. They need to understand the customer’s fleet – not just the fleet of equipment they sell, but the fleet of equipment that the contractor uses. You
have to know the needs, you have to know the sizes, and when you see the projects that he has and how he utilizes them — that information is going to keep you ahead of the game.”
Improving Efficiency
Labor shortages are also driving the need to improve efficiency at Forsberg Please see CONTRACTOR, Page 54
September 2015 | Construction Equipment Distribution | www.cedmag.com | 39
>> 40 & BELOW
MEGAN MATTINGLY-ARTHUR
Sales Manager Gives Reps the Tools to Succeed Jonathan Campbell knows success of salespeople means success for their customers
S
“The turning point for me was when I realized that there was a technology wave coming to the construction industry and that I could do everything that interested me in the tech and entrepreneurship worlds in this industry and likely have a bigger impact than I could in a lot of other places.”
ome people decide what industry they want to work in while they’re still in college. For others, like Jonathan Campbell, it’s more of a slow realization that they’re exactly where they want to be. Campbell began working in the construction industry while still in college, but wasn’t sure if a long-term career in the industry was right for him. He held a number of positions at the Salt Lake City-based Wheeler Machinery Co. – which provides new and used Caterpillar equipment in Utah and parts of Wyoming and Nevada – including working as a quarry supplies manager and credit manager. When he later became the company’s sales manager, he realized how many opportunities there were for tech-savvy salespeople in the growing construction industry. Things just clicked. “I worked at Wheeler Machinery Co. during college in various positions and knew that I enjoyed the business and the people I worked with, but I wasn’t sure if it was what I wanted to do long-term,” Campbell said. “During college, I was exposed to a lot of new industries and potential career opportunities that interested me as I looked into them, especially in the areas of tech and entrepreneurship. “The turning point for me was when I realized that there was a technology wave coming to the construction industry and that I could do everything that interested me in the tech and entrepreneurship worlds in this industry and likely have a bigger impact than I could in a lot of other places. One of the aspects of my job I enjoy most is figuring out to apply technology and solutions that are already being used in other industries to ours, or if they don’t exist yet work to build them.”
40 | www.cedmag.com | Construction Equipment Distribution | September 2015
In his role as sales manager, Campbell works hard to make sure that the company’s sales representatives have exactly what they need to be successful. He coordinates, forecasts, manages inventory and meets with Wheeler Machinery’s sales reps on a regular basis for feedback. “My job as a sales manager, simply stated, is to give our sales reps the tools they need to sell
equipment,” he said. “That involves making adjustments to our sales coverage, managing inventory, forecasting and coordinating efforts between other departments at Wheeler to make sure we are doing everything we can to give our reps every tool possible and giving our customers the best products and services possible. On a typical day I work with reps on various deals, whether it’s finding the right machine, getting financing in place or working to build a custom solution that gives them the best value for their money. “I also try to get out and ride with our reps once a week so I can get to know the customers in person,” he said. “The direct feedback from them is invaluable and has helped us make a lot
Jonathan Campbell began working in the construction industry while still in college.
of improvements that in turn keep bringing them back to Wheeler.” Though Campbell wasn’t initially sure about a career in the construction industry, working in the industry and at Wheeler Machinery Co. has been a great fit for him. He loves being part of a company that routinely helps people succeed – whether they’re co-workers or customers. “My favorite thing about my job is seeing customers and co-workers succeed,” Campbell said. “It is incredibly satisfying when a customer comes to us with a tough challenge and we are able to help them achieve whatever it is they are looking for in that situation. It’s also very gratifying to see others at Wheeler succeed, because their success is tied directly to customer success.” When he’s not busy making sure that the company’s sales reps have everything they need to provide excellent service, Campbell enjoys
spending his spare time outdoors, traveling to new places and hanging out with his dog. “In the summer, I’m usually on a road or mountain bike in the mountains around Salt Lake, and in the winter I love to ski,” he said. “Traveling is important to me, so I try to see new parts of the world whenever I can. I spend a lot of time with my dog, Kilo. We go camping and hiking pretty often, so we have a good time running around in the outdoors together.” For more information, contact Jonathan Campbell with Wheeler Machinery Co. at 801-978-1345, email jcampbell@wheelercat.com or visit www. wheelercat.com. The Wheeler Machinery Co. is also on Facebook, Twitter, YouTube, Pinterest, Instagram and Google+. n MEGAN MATTINGLY-ARTHUR is a freelance writer. Reach her at AED@LocalLabs.com.
September 2015 | Construction Equipment Distribution | www.cedmag.com | 41`
planning activity in July. On a year-over-year basis commercial planning is 20.6% higher, wh planning is up 5.1%.
>> DATA TRENDS
There were a total of ten projects entering planning in August with a value that exceeded $100 eight commercial projects and two institutional projects. In the commercial building sector, a $ mixed-use project in Santa Clara CA, a $400 million hotel at JFK International Airport in New and a $350 million warehouse in Orlando FL entered planning. Within the institutional buildin $400 million hospital in Phoenix AZ and a $150 million assisted living facility in Seattle WA planning.
Dodge Momentum Index Climbs 2.8% Over July Data The Momentum Index rose 2.8% in August from its July reading of 124.8. Planning data continues to trend higher following a weak start to the year, which bodes well for construction spending through the first half of 2016. The August gain was due to a strong increase in new plans for commercial buildings, up 8.4% from July, while the institutional building sector contracted 5.2% following a surge of planning activity in July. On a year-over-year basis commercial planning is 20.6% higher, while institutional planning is up 5.1%. Ten projects entered planning in August with a value that exceeded $100 million – eight commercial projects and two institutional projects.
Dodge Momentum Index (Year 2000=100) Aug-‐15 Dodge Momentum Index
Jul-‐15 % Change
128.3
124.8
2.8%
Commercial Building
143.3
132.1
8.4%
Institutional Building
109.7
115.8
-5.2%
Source: Dodge Data & Analytics
Physical Utilization The charts below show physical utilization by equipment category. Physical utilization is the percentage of fleet cost which is on-rent during a given period. Physical utilization is cost weighted. “On Rent” and “In Fleet” status are determined 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. 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.” Supplied by EDA, Charlotte, N.C.
Source: Rouse Asset Services. Contact Gary McArdle at gmcardle@rouseservices.com, 310-363-7520
###
The Dirty Dozen - UCC filings on 12 earthmoving units. Equipment Description
JUL 14
AUG 14
SEP 14
OCT 14
NOV 14
DEC 14
JAN 14
FEB 15
MAR 15
APR 15
MAY 15
Grand Total
Articulated Dump Trucks
118
118
111
123
107
145
98
123
142
165
149
160
1,559
Crawler Dozers
403
366
369
466
346
460
472
251
347
509
370
413
4,772
Crawler Loaders
40
11
10
13
4
19
17
15
20
40
25
15
229
839
820
745
933
707
988
1,052
614
871
1,060
836
999
10,464
28
40
34
20
25
49
31
13
25
22
31
25
343
1,090
976
974
1,072
769
1,214
1,421
794
993
1,320
1,365
1,493
13,481
89
114
71
100
78
128
101
97
98
120
105
105
1,206
Excavators - Crawler, Hydraulic Excavators - Wheeled, Hydraulic Mini Excavators Motor Graders Scrapers - Conventional
8
14
5
10
4
12
9
4
6
6
12
7
97
Skid-Steer Loaders
792
736
997
1,180
1,186
1,872
1,414
878
1,005
1,136
1,157
1,091
13,444
Tractor Loader Backhoes
461
334
372
450
355
471
411
402
358
352
345
425
4,736
Wheel Loaders < 80 HP
103
94
85
129
158
173
223
103
130
170
140
144
1,652
Wheel Loaders > 80 HP
599
559
635
830
750
1,004
701
518
630
715
586
683
8,210
4,570
4,182
4,408
5,326
4,489
6,535
5,950
3,812
4,625
5,615
5,121
5,560
60,193
Grand Total
42 | www.cedmag.com | Construction Equipment Distribution | September 2015
>> DATA TRENDS
EquipmentWatch INDEX TM | May 2015 in Review | Monthly Heavy E
Source: Equipment Watch, www.equipmentwatch.com
EquipmentWatch INDEX TM | May 2015 in Review | Monthly Heavy Equipment Int
September 2015 | Construction Equipment Distribution | www.cedmag.com | 43
>> MARKETING MATTERS
BRENT SCHOTT
Dealers: Marketing Must Be a Top Priority Carve out time to make sure your business is getting the most exposure possible.
I believe it is imperative that independent dealers put a stronger emphasis on marketing.
Following is an excerpt from my new book, The Dealer Marketing Imperative: What Every Equipment Dealership Must Do to Prepare for Tomorrow. Most of my clients at Swanson Russell over the past 24 years have dealer channels that sell their products. As you might expect, dealer marketing is an important, ongoing topic of discussion. I am personally a big fan of independent dealerships. I’ve met hundreds of owners and principals over the years, and the vast majority are genuine, down-to-earth people with good values running family-owned businesses. Selling equipment is often a relationship business, and most of the dealers I’ve met would tell me the dealer-customer relationship is the single most critical driver of success. But as the world changes, relationships alone aren’t enough. Everywhere dealers turn, it seems, there is a new threat: big box retailers, online sales, sophisticated used equipment companies and dealership consolidation resulting in larger, regional dealerships that are tough to compete against. To
28 | www.cedmag.com | Construction Equipment Distribution | September 2015
remain competitive, dealers must embrace new ways to keep customers coming in the door. In this increasingly competitive environment, I believe it is imperative that independent dealers put a stronger emphasis on marketing. There are hundreds of tactical things dealers can or should be doing — too many to talk about here. But after giving it much consideration, there are several things that I believe are fundamentally important and can have a tremendous impact on any dealer’s business. And it starts at the top, with you. Regardless of product category, every manufacturer has its small percentage of high-performance dealers who account for the majority of its total sales. Why are these particular dealers so much more successful? Without exception, every one of the principal owners I’ve met from high-performance dealerships are actively involved in marketing. These progressive owners realize that a focus on marketing can boost just about every part of their business — new equipment sales, used equipment sales, parts and
>> MARKETING MATTERS service sales, repeat sales and so on. Making marketing a management priority means two things. First, as an owner or principal, you need to make marketing a personal priority. You, personally, need to be on a mission to make marketing just as important as sales, service and parts. Second, you need to find the right person to put in charge of marketing, and then work closely with him or her to establish goals and develop strategies. For this person, marketing is the No. 1 priority and you’ve given him or her the time, resources and support to succeed. Now that you’ve made marketing a personal priority, you’re going to have to free up some time to actually make it happen. To begin, I recommend planning for three to five hours of uninterrupted time a week to work on the additional action items to follow. This could be an hour every day, a half-day every
week, or something in between — whichever works best for you. The key is to schedule it, and stay committed to it. This may mean you need to delegate something else. Perhaps you can turn this into an opportunity to motivate one of your managers by giving him or her more responsibility. First and foremost, successful dealers focus their efforts on selling strong brands. Sure, they may sell other brands to fill product gaps or deliver on the tried and true, goodbetter-best selling strategy. But inevitably, they focus their efforts on the best brands in the category. Why? Because they recognize that strong brands have momentum. Through awareness, reputation, and loyalty, strong brands are already working for them. The mere mention of the brand commands respect and attention. The power can be so strong that it brings customers in the door with little to no effort on the dealer’s part. It has taken decades of consistent work and
millions of dollars to build that kind of value into a brand. And guess what? If you are a dealer of a strong brand, you get that value for free. If you are a dealer of a strong brand, you know exactly what I’m talking about. And as a successful dealer, you’ve played an important role in that process. You are the face of that brand to the contractors in your market. You deliver the advice, the service and the support that keep customers happy and builds brand loyalty. If you sell a strong brand of equipment, don’t underestimate the value it is bringing to your dealership. Instead, do everything you can to build upon it. BRENT SCHOTT is senior vice president and group account director at communications agency Swanson Russell. He can be reached at brents@ swansonrussell.com. AED members can read the full book at www.aednet.org/freeebook.
Lowe Manufacturing coMpany, inc.
18903 High point road Viola, wi 54664 pH: (888) Dig-Lowe (344-5693) fX: (608) 538-3995 www.LoweMan.com Lowe@LoweMan.com
PRODUCTIVE, DURABLE, VALUE. ® AUGERS TRENCHERS
GRAPPLES
September 2015 | Construction Equipment Distribution | www.cedmag.com | 45
>> MONEY$$$MAN
GARRY BARTECKI
Spend Some Quality Time With Your Numbers AED’s Cost of Doing Business Report is a great resource to analyze, compare your data from companies with similar sales numbers.
D
If you are in this industry, you need to own a copy of AED’s Cost of Doing Business Report.
Sales
o me – and yourself – a favor and gather up your year-end internal financial statements, your laptop or tablet, a cigar and some spirits of your choice and your copy of the 2015 Cost of Doing Business (CODB) report. Find a place to spread out your materials and plan on spending at least two or three hours reviewing your data compared with the CODB. Make sure to examine the “Typical” versus “High-Profit” categories and where you fit between the two. (To purchase a copy of the report, visit bit. ly/aedcodb.) If you are in this industry, you need to own a copy of this AED publication. If you participated in the survey, you will get one for free along with your personal company analysis. If you didn’t participate, you can buy one (at the member rate) and do your own analysis. Be on the lookout to participate in next year’s report in the first quarter of 2016. For more information on participation, contact your regional manager at 630-574-0650. Quite frankly, I think CEOs are making a big mistake by not participating in this program. I sometimes hear, “We can’t get the numbers ready in time to participate.” Or, “We can’t fill in the data template because it is too complicated or does not agree with the way we do our books.” If you fall into either of
Typical
High Profit
$52 million
$52 million
Pretax Margin 3.9% Sales change
11%
Gross margin
20.5%
7.6% 16%
24.1%
46 | www.cedmag.com | Construction Equipment Distribution | September 2015
these scenarios, I respectfully suggest you are missing a major opportunity to learn where you need to improve if you plan to stay in this business. The 2015 CODB, which represents 2014 data, provides some meaningful numbers because we have Typical and High-Profit stats provided by companies with similar sales numbers – about $52 million for each category. High-Profit dealers represent the top 25 percent of the dealers participating in the program. This year we have some significant spreads between Typical and High-Profit. The pretax margin spread provides results of $2.028 million for Typical and $3.952 million for High-Profit – about a 100 percent difference. I would say that is significant. Why the difference? There are two reasons. First, let’s look at the difference in the top line and the difference in the gross margin percentage. The remaining expense categories are similar for both categories. Further analysis reveals that the High-Profit sales mix has a higher concentration in rent-to-rent business and higher gross profit margins for each of the standard sales silos (equipment, parts, service and rental). A review of the balance sheets for both categories supports the rental comment. Typical dealers carry a much higher percentage of inventory compared to the High-Profit dealers, who carry more rental assets in place of inventory. Another great feature of the CODB is the five-year historical analysis it provides. It is very informative, especially the data regarding both the Typical and High-Profit results. The spread between the two has been consistent through the 2013 results, but has narrowed
>> MONEY$$$MAN somewhat in 2014. That means the Typical stats are getting closer to High-Profit results. I also like to review the commentary at the front of the report, and the guidelines to follow to stay on top of your business and operating results. Some of the highlights include: Sales growth: We want sales growth to be about 3 to 5 percent higher than inflation. For 2014, I believe we hit that goal. Gross margins: These must be maintained. We’re doing well here, but still have that big spread between Typical and High-Profit. Percentage increases in payroll costs: These cannot exceed sales growth and in fact should increase at 2 percent less than sales growth. Follow these rules and you are almost guaranteed success now and in the future.
But making it happen is the hard part. It requires constant planning and analysis of the numbers. Let’s also not forget that we are dealing with the construction industry, which has a high volatility factor because of the economy, interest rates, weather, government funding and the remaining issues that can bite the construction industry when it is least expected. In short, managing a dealership in this industry may require many “adjustments” during a year to help reach the numbers you are looking for. There is one more topic to note before we close for this month, and that has to deal with the rent-to-rent (RTR) business. What I am personally seeing is many dealers finding themselves getting into the RTR business whether they want to or not. Customers that used to buy equipment or enter into RTS contracts now just want to
“rent,” with dealers finding themselves with an RTR fleet and not having a clear plan on how to manage it to ensure profitability and positive cash flow. This is a big issue for a dealer because of the cash flow implications the rental business brings to the table. If you are going to be in the RTR business, please be sure that you have the ability to manage it. If you need some help, I would be glad to discuss this with you. My cigar is getting short and I am running out of spirits, so it is time to close for this month. Do your homework using the CODB, and good luck for the rest of the year! n GARRY BARTECKI is the managing member of Dealer-Rental Success LLC, which services construction equipment dealers, material handling dealers and rental companies. He can be reached at gbartecki@comcast.net.
Heavy Duty Attac hme nts That Maximize Your Ve r s at ilit y
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TAG Manufacturing, Inc. • Chattanooga, TN 37416 423-893-3345 • 1-888-490-0501 • http://www.tagmfg.us September 2015 | Construction Equipment Distribution | www.cedmag.com | 47
>> GOOD COMPANY
MEGAN MATTINGLY-ARTHUR
Computer Program Changes the Way Parts Distribution Company Does Business Owner says RFE Distribution has revolutionized the industry by allowing dealers to search for the exact part or piece of equipment they need and its condition. When Brook Hale first got the idea for a computer program for his company, RFE Distribution’s All Makes, All Models Program (AMAM), he couldn’t have known just how much that program would change the logistics of the multitrillion-dollar-per-year construction equipment distribution industry. However, after teaming up with a friend to build the program and showing it off to their tech team, its likely impact became clear: Hale had created fire. “What we’ve done is we’ve created a program that has truly revolutionized the construction industry,” said Hale, owner and CEO of RFE Distribution and the AMAM program, which carries a wide variety of new and used construction parts for excavators, dozers, loaders and other heavy equipment. “We put a deal together – the RFE partners and a good friend of mine – to build a program that would essentially replace downtime in the need for wanting a product in a certain market,” said Hale. “The tech world is not necessarily in our industry, but when we showed the program to the tech team, it was like showing them fire – that’s how important it was.” In the past, connecting construction parts manufacturers and dealers was primarily dependent on location. Dealers would buy from a manufacturer in their area that they knew and had a business relationship with, and when they paid a visit to the manufacturer, he or she would give them an update on new and
Brook Hale
more efficient advancements in parts and equipment. Transactions were dependent on relationships rather than true efficiency or availability. Then came the advent of a global marketplace and e-commerce, which made it possible for dealers to buy from manufacturers located anywhere in the world. Still, there wasn’t a single program to streamline the process. “There hasn’t been one program where you could come for everything under your dealership’s roof,” Hale said. “We
48 | www.cedmag.com | Construction Equipment Distribution | September 2015
built a marketplace for that dealership. Now, if the dealer needs shop towels, rotary discs, a hydraulic pump, etc., he can buy them new, used, remanufactured, aftermarket – all the inventory that’s available, live from more than 1,700 suppliers.” Hale’s program allows dealers to search for the exact part or piece of equipment they need and find out not only which manufacturers have that item available, but can also find it in a variety of conditions – whether it’s OEM, used, aftermarket or rebuilt. The program also makes it much easier for manufacturers to update and extend their product lines in essentially real time, so that dealers have the most up-to-date information on what’s available. The revolutionary B2B program offered by RFE Distribution AMAM program is a boon for both manufacturers and dealers working in the construction industry, which is among the fastest-growing industries in the country, according to Forbes.com. “From the supplier’s position, the greatest feature is inventory – being able to move stuff that you’re sitting on and not have to dump that inventory later,” Hale said. “The perspective of the manufacturer is they’ll be able to move more inventory quicker, and in real time, because they’re not hung up on traditional channels that connect them to dealerships.”
>> GOOD COMPANY
Brook Hale, left, works with RFE Distribution Partner/Owner Chris O’Neal on a program Hale and his colleagues created called All Makes, All Models (AMAM) that helps streamline the parts-buying process.
In the past, one of the primary ways that parts and equipment manufacturers connected with new potential customers was to attend and host a booth at industry trade shows and conventions. While this method of reaching customers had its benefits in that it allowed some manufacturers to form relationships with clients, it also had major downsides in that it also required manufacturers to spend a significant amount of money to travel to the convention, host a flashy booth and make meaningful connections with potential clients. In the end, this approach resulted in manufacturers securing the business of perhaps 5 percent of the dealers they met with and wooed. Additionally, in a rapidly changing construction industry, dealers can no longer rely just on brand loyalty to keep their customers coming back again and again. Being able to offer a wider range of products can help dealers expand their customer base and offset the business they might lose as their customers’ brand loyalty wanes. “The majority of the customers today are not brandloyal,” Hale said. “This program invites dealers to reach so
many more customers in an attempt to offset that.” “The old traditional way of selling equipment on brand reputation or brand loyalty is ending. Brand loyalty that results in parts and equipment sales is fleeting – and this program is a response to that.” RFE Distribution’s AMAM program also has an additional benefit: Dealers tend to make a larger percentage of profit off of parts rather than equipment, so being able to access the parts a client needs, whenever they need it, can vastly increase a dealer’s earning potential. Working with an expanded database for parts and equipment also results in shorter waits for products which, in turn, results in faster service and happier clients. “This program is going to be one of the biggest tools you’ve ever seen or will ever need,” Hale said. For more information on RFE Distribution’s AMAM program, call 877-344-2399 or visit www.amamlogin.com. MEGAN MATTINGLY-ARTHUR is a freelance writer. Reach her at AED@LocalLabs.com. September 2015 | Construction Equipment Distribution | www.cedmag.com | 49
>> WORKFORCE SOLUTIONS
LARRY COLE
Good Data Can Add Up to Success Key Performance Indicators are worth your time and effort.
If you have not already discovered them, there are a ton of KPIs out there that will measure just about anything (and if you are really feeling bored you can develop more).
W
hen I was asked to write a piece for this month’s issue on Key Performance Indicators (KPIs), I was very excited about which ones to concentrate on and to spout my suggestions on how to successfully use KPIs. But after putting it on paper, I sat back and reviewed it only to realize that there are a few basics that aren’t mentioned very often that have caused heartache and frustration for people and managers using KPIs. With that said, let’s take a closer look at why we should pay close attention to KPIs and some of the pitfalls in doing so. The fundamental reason for KPIs is to provide feedback as to how well your department is doing based on your company’s data, and comparing the results to the same KPI of successful similar businesses. These KPIs are called metrics and are used to provide an indication as to where a business - or a department in a business - is versus their successful peers. As Jonathan Deming said: “It is difficult to manage what is not measured.” Therefore, one of the measuring sticks that has been chosen by the industry has been KPIs, and rightly so.
50 | www.cedmag.com | Construction Equipment Distribution | September 2015
However, they are not silver bullets for correcting all the woes of a business. There are some key issues that I believe need to be discussed when using KPIs to help your business become more profitable and efficient. The first point is that a department or business did not get in the shape it is in overnight and will not change its performance overnight while still maintaining its customers or employees. When we look at the current culture in our society, instant gratification is the norm. However, when resolving KPI issues, that can be a hazard in the road to success. In my humble opinion (and as I was taught), KPIs should be looked at as a trend over the year or years, as well a daily or monthly basis. Caution is key to preventing knee-jerk reactions that can lead to erratic decisions, resulting in the old flavor-of-the-month solution. Successful companies have spent time analyzing and developing solutions based on the overall picture. That is not to say that you shouldn’t change a process or some processes in a department to maximize profit or efficiency when common sense dictates there is a better way of doing something. In the grand scheme of things, the key is: What is the real reason for the trend of the KPI? Is it a lower gross margin in parts or service? As a manager of a department, you need to be concerned with the KPIs that you have control over and monitor the ones you do not have control over. Most of us operate with a limited amount of time and more than enough on our plate to worry about without having to get all twisted up in something you cannot control. But I am not saying to discard those KPIs you monitor. You will need to understand what they are and what they are telling you; how they are affecting your department; and if called upon to be able to speak to issues arising from them in such a way that management
>> WORKFORCE SOLUTIONS has an understanding of the department. By of your limited ability providing employees to control the situation insight as to the KPIs, due to whatever the what they mean and circumstances that are how they affect the NEW Cooling beyond your control. department and the Technology! Be sure that when dealership profitability you do discuss it with and efficiency, it will management that the almost always result accountability and responsibility for the in a win-win situation results are beyond your for the department and control. provide the employees In order to utilize with a sense of pride KPIs, you must have and ownership in the access to the infordepartment. mation needed to Anytime you come calculate the specific up with a solution for KPIs for which you are improving the KPIs, being held accountable - AND the information always look around and Keep Your Cool with Polar Cab by Webasto must be correct. see if there is collateral Calculating KPIs Webasto’s Polar Cab TS engine-off cabin cooling system will ensure operators damage that may result never lose their cool again. Webasto’s exclusive thermal storage technology with inaccurate from the solution. Is the provides operator comfort by maintaining cabin temperatures during down numbers only leads to damage a short-term time. Increase productivity, save money, reduce fuel consumption and engine inaccurate decisions or possibly a long-term hours with Polar Cab TS by Webasto. which will result in issue? Also think about wrong solutions. That Polar Cab TS Benefits who all the collateral often results in a future n Cold Storage Technology with patented damage is affecting: detrimental impact on graphite matrix n the department and/or Cooling capacity 1.3 kW (4,450 BTU/h) other departments, n Increases productivity the business. employees and most of n Maintains cabin temperature If you have not all, the customers. n Reduces Engine Hours already discovered One last note: There n Saves Fuel them, there are a ton n may be times that you No Additional batteries required of KPIs out there that n Low power consumption will need to segment will measure just about out certain portions of anything (and if you To find out more about Webasto’s your business in order are really feeling bored off-highway cooling solutions visit you can develop more). to clear up the picture www.PolarCabCooling.com The key to improving for the department. your department is to For instance, if you are calculating gross margin percentage or select a few key ones on which to work. If you try to do it all at any KPI that pertains to gross margin and there is a difference in once, that could lead to more frustration for yourself and your pricing between internal customers/departments and external/ employees. Through analyzing the trend, develop a plan and goal customers, this can possibly result in incorrect solutions for for the department. If you solicit the assistance of your departcorrecting KPIs. n ment’s employees for solutions, you will get buy-in and negate resistance to changes that need to occur to accomplish your goal. Remember that Rome was not built in a day. Be sure to deterLARRY COLE is a professional facilitator, program developer and trainer in mine the root cause and not what appears to be an issue due to dealership management, tractor performance, and farm and ranch safety some other process and/or procedure in or out of the department. programs. Cole’s focus is in the development of parts and service managers Your department’s employees are an integral part of the success at dealerships to help them become better operational and financial leaders. September 2015 | Construction Equipment Distribution | www.cedmag.com | 51
>> CANADA
CODIE TAYLOR
Interpretation of Commercial Vehicle Law Impacts Canadian Equipment Dealers AED and 42 percent of its Canadian members support changes to Hours of Service regulations.
AED and its Canadian members will reach out to provincial and federal decision makers to advocate for change so distributors are not at a disadvantage under the Hours of Service regulation.
Y
ou wouldn’t take a semi or a dump truck down the highway to a conference or customer visit, but if you aren’t careful, taking the company pickup truck or a similar vehicle can be an even costlier venture. Depending on how you have licensed your vehicle, the federal Commercial Vehicle Drivers Hours of Service regulations SOR/2005-313 (Hours of Service regulations) portion of the Canadian Motor Vehicle Transport Act treats equipment distributors who drive pickup trucks the same as long-haul drivers who operate semitrailer trucks. AED recently conducted a survey of its Canadian members to find out how much this affects their business and if they would support some sort of change. When asked if their dealership is adversely affected by Hours of Service, 50 percent of participants answered “no” while almost 42 percent answered “yes.” The remaining 8 percent said they weren’t sure if Hours of Service affected their business. The truth is, as equipment distributors, we are all affected by this regulation. If your company truck is licensed to pull more than 4,500 kg because you need it to haul a trailer and a piece of equipment being delivered to a customer and you decide to use that truck to attend a business meeting, Hours of Service kicks in even if at the time of the trip your truck and load (you) are below that limit. The same thing is true if you are visiting a job site or answering a service call. So why should you care? In short, hours can turn into days, profits can turn into CVOR (or similar) fines, and insurance rates can be crippling. It means you cannot work more than 12 hours a day. It means you have to complete a log of your activities. It means you
have to stop at inspection stations along with semis. All of this hits productivity, revenues, labor costs and more. The AED and its Canadian members believe that a shift toward a more efficient system would be welcome. A recent survey indicated that more than 83 percent of AED members in Canada would support an increase when it comes to the weight restrictions under the Hours of Service regulation. It could be suggested that use exemptions or exceptions could be included in the licensing process when those company trucks are used for meetings and are not hauling equipment or materials and the weight is below 4,500 kg, which would ease up restrictions on most heavy duty pick-up trucks. Another option would be to raise the weight restrictions altogether. Either way, a change is needed. Over the next few months, the AED and its Canadian members will reach out to provincial and federal decision makers to see if a change could be implemented so that equipment distributors are not at a disadvantage because the Hours of Service regulation. While we would welcome some sort of a change, we still want to ensure that our members practice safe driving when operating company vehicles. The safety and security of our members is a priority, but we also believe that there is a common sense solution to the Hours of Service regulation that will help increase productivity and ensure continued success of our members. For more information visit bit.ly/1OzXzvR; or for Ontario CVOR, bit.ly/1UC3rf9. n
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. 52 | www.cedmag.com | Construction Equipment Distribution | September 2015
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>> CONTRACTOR CONNECTION
NUCA Gives Utility Contractors a Voice on Important Issues
CONTRACTOR / from page 39 Construction. The company invested in a software program that streamlines payroll while sending labor and equipment cost data directly to the company’s project-management software. The company is also looking to make better use of telematic data in the near future. It is currently investigating a program from Navman Wireless that can accommodate a mixed fleet. “We have access to telematics data now, but I don’t want to log into four different programs to find out what is going on,” Wendorf said. Komatsu’s “no idling” program has caught Wendorf’s attention. He receives a monthly report on idle time from the dealer, and he appreciates the proactive approach, which has made him more aware of the potential fuel savings using
The excavator is the “workhorse” of the construction industry, Bruce Wendorf said.
information garnered from telematic data. Wendorf said it’s important to set
JOANNE COSTIN is a freelance writer and marketing consultant focusing on the construction industry. She can be reached at jcostin@costincustom. com or 847-340-4075.
As the current chairman of the National Utility Contractors Association (NUCA), Bruce Wendorf has been active in representing its 1,800 members in Washington, D.C., on issues important to the industry. NUCA, along with several other industry associations, drafted and sent comments to OSHA concerning its new crystalline silica-dust proposed rule. This new rule would significantly impact NUCA members by changing the compliance measures on employers in regard to dust exposure in the workplace. “What it did is made them stop and reevaluate that rule,” Wendorf said. Water infrastructure funding is another key area for the group. “Every year, we go to Washington to fight for SR funding (State Revolving Fund),” Wendorf said. The State Revolving Fund (SRF) provides low-interest loans for investments in water and sanitation infrastructure, such as sewage treatment, storm-water management facilities and drinking-water treatment. Like AED, NUCA supports lifting a cap on private utility bonds as a way to encourage private capital investment in expensive water and wastewater projects.
advertisers’ index AmTrust North America...............................................21 BAIR Products, Inc. .......................................................26 Bell Trucks of America.................................................. 11 BidSpotter.com............................................................23 BOK Financial...............................................................17 CDK Global Heavy Equipment ...............Inside back cover Diamond Mowers........................................................31 e-Emphasys Technologies Inc.........................................1 EPG Insurance, Inc. ........................................................8 Infor...............................................................................5 Knapheide Manufacturing Co. ......................................15 LBX Company LLC................................ Inside front cover Liebherr Construction Equipment Co...........................53
Loftness.......................................................................37 Lowe Manufacturing Co. . ...........................................45 Okada America ..............................................................50 PRINOTH......................................................................51 PriSim .............................................................................55 RFE Distribution / ANAM ...............................................33 Ritchie Bros. Auctioneers ...............................................2 Sentry Insurance............................................................6 Sumitomo Finance and Leasing Co...............................13 TAG Manufacturing, Inc...............................................47 Unified Purchasing Group............................................19 Webasto Product North America.....51XAPT Corporation Back Cover
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
54 | www.cedmag.com | Construction Equipment Distribution | September 2015
See things differently, think differentlyâ&#x201E;˘
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>> EASY WINS
STEVE CALECHMAN
Business is Booming: Does That Mean It’s Time to Expand? Here are some first practical steps to take when considering going bigger.
Be rigorous in your research and forecasting to minimize unavoidable risk.
T
he goal of any company is to generate sales, generate more sales and then keep that streak going. The eventual dilemma, however, is when to expand your business. When you’re experiencing success, it might seem like a no-brainer to expand, but there are factors and pressures, both internal and external, that need to be considered. If you overlook or minimize them, you could be falling into an inescapable hole. But if you perform your due diligence, you will put yourself in a position to grow and command more of the market. John Beauregard, owner of Beauregard Equipment Inc., advises the following: Look for a foundation. There’s no single best predictor of the economy, but new housing starts is one sector to watch. Home construction is volatile, but you will want to see a trend. Four positive months in a row is a solid harbinger that the upswing will continue, and with that, the regular need for equipment. Conversely, four negative months is a sign that it is not time to expand. Get feedback. Talk with your customers and find out how heavy their workload is and how far out they are booked. One month? Not so
great. A year out? Encouraging. Determine what their appetite is for investing, particularly if they’re looking to replace equipment or merely repair it. After consulting with your customers, talk to your banker and assess the risk tolerance and flexibility in getting loans approved. The bottom line is that you want to hear that people are looking to spend money. Resist authority. Pressure from a manufacturer to take on more inventory is constant and inevitable. Companies are always looking to capture a bigger market share, but that might not be right for you. Information is critical. Do your research, look at your company’s track record and then negotiate the difference to something that would be mutually acceptable to you and your supplier. Moving forward. If expansion makes sense, the good news is that you will likely have three to six months before new equipment arrives. Make sure you have ample staff, particularly in sales and parts. Whether or not you take on additional help, salespeople need to familiarize themselves with the incoming stock and must be able to talk it up. They can also get a sense of what customers want and when it will be needed. Different specifications and earlier delivery schedules can then be accommodated. The parts department is especially key because new equipment often means new problems to fix, and finding skilled repair people is a regular challenge. The lead time also comes with a downside. Unlike businesses that have a 30-day wait for new inventory, you likely don’t have that flexibility and instead need to make longer-term projections. You can spread out the order to slowly incorporate it into your space, but you’re locked into the quantity and vulnerable to the unforeseen economic downturn. Again, it comes back to being rigorous in your research and forecasting to minimize unavoidable risk. n
STEVE CALECHMAN is a freelance journalist in the Boston area. He’s a contributing editor for Men’s Health and his work has appeared in The Boston Globe Magazine, The Old Farmer’s Almanac and Delta’s Sky magazine. 56 | www.cedmag.com | Construction Equipment Distribution | September 2015
Create Fast, Professional Quotes with Optimal Margins Margin Worksheet provides a customizable approach to managing and approving equipment quotes before presenting them to the customer. • Manufacturer incentives are taken into consideration when determining the margin • Specify the amount of money your dealership needs to set aside (reserve) to make the deal happen • Programs and reserves are defined by the Type (New, Used or Both) as well as the class of the equipment • Integration with IntelliDealer™ allows for customer and equipment data to import automatically to your quotes and invoices With Margin Worksheet, your equipment quoting process can have the margins you desire. cdkglobal.com/heavyequipment | sales.heavyequipment@cdk.com | 519.474.5212
Heavy Equipment © 2015 CDK Global, LLC / CDK Global is a trademark of CDK Global, LLC.
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