Equipment industry rebounding, still room for improvement

While the equipment industry has seen ups and downs this year - exports declining slightly in the first quarter while imports continued to rise, smaller horsepower tractor sales hitting a 10 year high and indications in August that the market was returning - attendees at the 2015 AED/CDK Global Executive Forum in Schaumburg, Illinois, saw reasons for hope.

“We still have a lot of growth,” Vermeer Texas-Louisiana CEO Whit Perryman said. “There’s still lots of construction going on. They’re always going to be building roads. There’s still improvement for infrastructure needed, for waters and sewers and things like that.”

Mike Quirk, Wagner Equipment Co.’s vice president of operations, said that while the industry isn’t trending negatively, it still has a way to go.

“I think we’re trending in a flat direction and I think that we’re all learning how to operate in an uncertain economy. There’s uncertainty about so much.”

For those in attendance at the forum, much of that uncertainty stems from Congress and both its actions and inaction.

“Things that Congress has talked about doing would actually limit our ability to hire more people and that’s really what it’s all about,” Dennis Heller, the president of Stephenson Equipment, Inc., said. “We want to grow our businesses and the only way that we grow our businesses is by hiring more people and we need to be encouraged to do so.

“What Congress doesn’t understand is that their actions and inaction have been stifling business. Whether it’s lifting the ban on the export of oil to not putting in place bonus depreciation prior to the end of December when it does not change the behavior of your customer, they’re taking too long to give us the answers of what they are or aren’t going to do. I actually would prefer if they said we’re not going to do it and at least then we’d know. It’s always a state of limbo wondering if they’re ever going to pass the next bill.”

Quirk echoed Heller’s sentiments.

“I think everybody would tell you that the problem is regulation,” Heller said. “If you just are constantly regulating everything, all that does is add cost to it. We are fortunate in the western U.S. where we operate that we have a lot of natural resources - we have construction, we have oil and gas, we have mining and several different commodities that they mine, we have a lot of power generation, we have a pretty good balance of things that we can turn to - but every one of them is regulated. It gets worse as it gets from a federal level to a state level to a local level and everybody seems to want to tell folks how to run their business and we have to then learn to live with that.

“I think Congress has a lack of leadership so it is incumbent upon us to figure out how to operate without the certainty that we enjoyed for a lot of years.”

To counteract that uncertainty, Heller said, his company is focusing on the future.

“We’re making an investment in the future through facilities and people and new systems because you can’t just sit on the sidelines,” Heller said. “You need to grow with it.”

“We need to continue to be close to our customers and what they’re looking for,” Perryman added. “It’s an ongoing, ever-changing business that evolves and continues. There’s always competition, there’s always international problems coming on the marketplace.”

For Quirk, a brighter future might also be visible by looking at current problem areas.

“In some of the areas of the country that are continuously down, you can look at what works to stimulate it and what works to inhibit it,” Quirk said. “I would trust that folks are smart enough to recognize that and try to make changes that will be more positive and more business-friendly.”
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