CEDMag.com - March 2012 Articles
Construction Equipment Distribution magazine is published by the Associated Equipment Distributors, a nonprofit trade association founded in 1919, whose membership is primarily comprised of the leading equipment dealerships and rental companies in the U.S. and Canada. AED membership also includes equipment manufacturers and industry-service firms. CED magazine has been published continuously since 1920. Associated Equipment Distributors
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CEDMag.com - March 2012 Articles

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Contact Kim Phelan at (800) 388-0650 ext. 340.


MARCH 2012
  • Drilling Drama
    Markets
    By Giles Lambertson
    Hydraulic fracturing for shale oil is the only thing keeping equipment markets alive in some states; meanwhile other states wrestle over environmental concerns – and the plot will only thicken as federal players also choose their sides.
    The "Eureka!" moment for hydraulic fracturing came more than 60 years ago when a dying natural gas well in central Kansas was revived by "fracking." But the real shouting started when fracturing was combined with horizontal drilling and slick water and introduced to shale fields in the northeastern United States.
    [ read more ]
  • Online Shopping – CE Dealer-Style
    Product Support
    By Joanne Costin
    Online parts stores strengthen relationships with your customers.
    Online shopping has been slow to catch on in the construction industry. Dealers have been held back by worries about protecting their territories; customers shopping around for the lowest-priced parts; and systems that have lacked a user-friendly experience. While some manufacturers and dealers were involved in e-commerce as early as 1998, things didn’t exactly take off. But recently, there’s been a rather sudden shift in attitude about shopping online for parts.
    [ read more ]
  • Contrarian Marketing It's Not Magic Just Math
    Strategy
    By Nick Mavrick
    You can use the strategic thinking of your competition and market to the masses, or choose to focus most of your efforts on the best-of-the-best customers.
    Warren Buffett, the world's most famous investor, once quoted Mae West: "Too much of a good thing can be wonderful." On another occasion, Buffet also said, "Wide diversification is required only when investors do not understand what they are doing." Many OEMs and dealers often disagree with the notion of marketing to VIP customers and prospects – they are concerned about putting all of their company’s eggs in one basket. Professionals from CEOs to field sales teams often view marketing as whatever the latest brand awareness, co-op advertising program, or tradeshow happens to be. The result is marketing that is alarmingly subjective and ineffective within the construction equipment industry. My aim in this article is to share strategies and tactics that I used to compete against some of the largest companies in the world – and won. You can too.
    [ read more ]
  • Experience INTERMAT 2012
    Industry Event
    An equipment show of enormous proportions returns to Paris on April 16-21.
    Looking for opportunities to develop overseas business relationships? Whether you’re looking at products to introduce to your North American customer base, exploring equipment export partnerships, or even considering how to expand your company through acquisitions in the global marketplace, INTERMAT provides you with a week to see what’s new and meet up with a world of industry players.
    [ read more ]
  • The Federal Government Plays by Well-Defined Rules
    From the Chairman
    By Larry Glynn
    You may as well take your place on the field, tell your story, and maybe even score a few points for your industry.
    A lobbyist is just a very high priced salesman. Someone hires them to sell their idea. The member of Congress, on the other hand, will either buy their idea, or not, based on what their agenda is to get re-elected. Getting re-elected requires a lot of money these days, and typically the lobbyists represent corporations or persons with money to donate. Members of Congress need this money, so they have to be open to adding the well-funded lobbyist’s proposals into their political program. That is the daily routine in our nation’s capital. Everyone seems to want something from the government.
    [ read more ]
  • Used Equipment Market Facing Potential Shakeup
    Editor's Note
    By Kim Phelan
    In 2019, who – in the world – will be buying used T-4 machines?
    Now that interim T-4 compliant construction equipment is a reality and final T-4 is just two years away, are you troubled at all by the thought of where that sophisticated, emissions-reduced machinery will go when it’s a couple years old? Industry analyst Frank Manfredi has been giving quite a lot of thought to that question, and in a multi-client study on which he and co-author Tom Rhein are embarking, he raises provocative pricing issues that could occur in the event of a potentially shrunken market.
    [ read more ]
  • The Bare Minimum You Should Do This Year
    On the Numbers
    By Garry Bartecki
    Your AED membership affords you some very competitive advantages that should not be ignored.
    It looks like dealer confidence is on the rise. Nice sentiment to encounter after the last couple of horrible years. I have actually had dealers tell me that 2011 was the best year they ever had. As I have stated in the past, this group of dealers are a resilient bunch, able to react to current economic conditions and adapt until the economy turns around, and you have proved it once again.
    [ read more ]
  • 2012 Construction Equipment Outlook May Be Better Than You Think
    Business Outlook
    By Eli Lustgarten
    Making sense of conflicting indicators, or at least making an educated guess, given U.S. and foreign conditions.
    Thirty-eight percent! That's what the preliminary data indicates for the growth of construction equipment sales in North America for 2011 despite minimal gains in underlying construction spending. We had been expecting strong construction equipment demand last year and it appears the industry finished the year with a strong surge.
    [ read more ]
  • Let's Start to Solve the Shortage of Technicians
    Aftermarket
    By Ron Slee
    Why aren't we leveraging the skills of our current workforce?
    At the recent AED Summit I had the opportunity to visit with acquaintances from many dealerships representing many brands and products. They were an eclectic group of talented people. We had the chance to discuss the usual challenges of equipment dealers across the country. And, as you might imagine, there was a common thread of dilemmas and difficulties. The major subject was the usual one. "What do we need to do find technicians?"
    [ read more ]
  • The State of Our Union Is Divided
    View from the Hill
    By Lynn A. Westmoreland (R-GA)
    Though predictable, the president's speech was nonetheless disappointing.
    In January, the president gave his State of the Union address to a joint session of Congress. The speech is a constitutional requirement on the presidency and has become a way for the president to announce his agenda for the coming year.
    [ read more ]
  • Canadian Chapters Find Working With Others Helps Workforce Initiatives
    Inside AED
    Two AED local groups earn the prestigious 2011 Founders Award.
    Award winners is not that they are both from Canada, but that they both have learned to collaborate with other industry organizations to advance initiatives that help the entire construction industry. Struggling to attract diesel mechanics to the industry with their limited resources, the Ontario chapter of AED realized that all of their customer associations were struggling with similar problems attracting students into technical careers in construction.
    [ read more ]
  • Successful Summit Fundraising Events Support the AED Foundation
    Groundwork
    Sponsors and attendees collectively raised $54,000 to benefit professional education and workforce development for the CE distribution industry.
    The AED Foundation hosted two benefit events at the 2012 AED Summit in National Harbor, Md. The Comedy Club Night and the 5th Annual Live Auction each successfully raised proceeds to support the Foundation’s Workforce Development initiatives.
    [ read more ]
  • New Study Shows Infrastructure Investment Helps Economy While Boosting Government Revenues
    Industry Beat
    The AED-commissioned report finds sizeable tax revenues are generated.
    A report by researchers at the College of William and Mary's Thomas Jefferson Program in Public Policy sheds new light on the positive impact infrastructure investment has on the economy and government tax receipts. The study, commissioned by AED, found that over two years, one dollar spent on infrastructure construction produces roughly double ($1.92) the initial spending in direct and indirect economic output. The long-term impact is also significant, with a dollar in aggregate public infrastructure spending generating $3.21 in economic output (GDP) over a 20-year period.
    [ read more ]
  • Fire Prevention Belongs to the Proactive
    Play It Safe
    By Randy Dombrowski
    Dealers can avert the devastation of a workplace fire with frequent checks and by promoting a culture of safety.
    Picture the scene: A small electrical fire starts in a dealership's service area. Due to poor safety practices and unsafe conditions, the small fire ignites four plastic containers of gasoline stored nearby, quickly spreads to other combustibles and is soon burning out of control. The building's automatic sprinkler system, which would typically extinguish the flames, is unable to control the fire due to its intensity. The fire overwhelms the building and before firefighters can arrive, most of the service area is a total loss. The remaining sections of the building are inundated with smoke and water, which further delays business recovery efforts. Fire investigators trace the ignition source back to an overloaded extension cord. The fire causes over $1 million dollars in damage, and reconstruction efforts exceed six months.
    [ read more ]
  • Full Product Line Spells Big Potential for Dealers
    A Closer Look
    By Kim Phelan
    Building name recognition in North America is challenging, but LiuGong is blending value, American management and a strong finance partner to gain distribution traction.
    North Americans have been complacently reading "Made in China" labels for decades – and when they check the price tag, look at the value of what they're buying, they're happy to walk out of the neighborhood big-box store knowing they got a good product that does what it promises for a lot less than some betterknown brands. Translating that accepting mentality onto the construction jobsite, however, where customers can have epoxylike loyalty to favorite brands, especially in the U.S., has been a slower process. And whether you see the North American marketplace more as an oligopoly, a country club of sorts with limited membership, or as a cocktail party in which there's always room for one more guest, there's no denying that setting up camp and making a name for yourself as a manufacturing newcomer takes more than guts and money – Chinese manufacturer LiuGong Construction Machinery N.A. would have to say it also takes perseverance, experienced American management, an established finance partner, and most of all, strong dealers willing to sign on and introduce the products to their customers.
    [ read more ]
  • Construction Forecast is a Mixed Bag for 2012
    Forecast
    By Joanne Costin
    Hot and cold sectors are likely to bring varied results for dealers.
    The Associated General Contractors' (AGC) webinar "Delve into Twelve," held on Jan. 19, 2012, provided three different views of the construction industry: an equipment market forecast; a general construction activity forecast, and a look at the super hot shale gas market. Eli Lustgarten, senior vice president for Longbow Securities, reported that the equipment market ended 2011 up stronger than previously expected (up 30 to 35 percent heavy) (up 20 to 25 percent light) due to tax incentives such as 100 percent bonus depreciation and buyers wanting to offset the higher prices of new interim Tier 4 machines. "The question is: Have we borrowed from 2012 to help compensate for the significant price increases that are rolling through the industry?" asked Lustgarten. His forecast for 2012 calls for construction equipment sales to grow 6 percent. "We are witnessing a bounce back in sales towards a level more consistent with current construction activity," added Lustgarten. Despite strong growth in construction equipment sales in 2011, levels are still below the prior peak levels.
    [ read more ]
  • How to Think Like a Banker
    Money
    By Patrick Balson
    Financial statements are nice – but manage your business for cash. Here are the secrets.
    Financial statements are perfectly good accounting tools. They tell you and your banker a lot about the health of your business, especially historically. Since they're usually based on accrual accounting, they take into account noncash items. So you've got a lot of receivables? Swell. You're loaded with noncash assets? Whoopee. Do you know how much your bank cares about those things? If you've recently tried to secure a business loan, you know. Or do you? If you thought their reaction was cold as a witch's heart then, it might seem warm and fuzzy compared to tomorrow's credit market. The times have changed, and you have to change the way you manage your business. It's time to start thinking like a banker and managing your business for cash. Period.
    [ read more ]
  • Bridging the Profit Divide
    Profit Improvement Report
    By Dr. Albert D. Bates
    Future growth potential of high profit dealers has the ability to slowly crowd the typical dealer out of the market. The question is, which side of the divide will you choose?
    The economic challenges of the last several years have created a "profitability divide" in the industry. Historically, the top-tier firms have always generated higher profits than the more typical firm. And now, they are generating a lot more profit. Slowly but steadily the profit divide is widening. Quite understandably, most firms aren't particularly concerned about something as vague as a profit divide. Instead, they are looking to ensure their economic viability today so they can continue to compete in the future. The assumption the typical firm makes is that it can catch up in subsequent years.
    [ read more ]
  • Kirby-Smith Selects e-Emphasys Solution
    Industry Beat
    e-Emphasys Technologies announced that Kirby-Smith Machinery has signed a contract to implement the latest version of eXtend, an enterprise software solution for the Equipment Service Management and Rental industries. Kirby-Smith will replace its legacy software with the industry-specific enterprise software suite from e-Emphasys to help implement best business practices and support key business initiatives such as customer relationship management.
  • Tyler Equipment Corporation Live with e‑Emphasys eXtend Software
    Industry Beat
    e-Emphasys Technologies and Tyler Equipment Corporation have announced the successful completion of a project significantly upgrading Tyler’s business management capabilities. e-Emphasys’ eXtend solution now supports Tyler’s full range of dealership activities, including rental, in Connecticut and Massachusetts.