Equipment Type

Ready When It Turns Around

In past years, the first quarter kept the industry bustling with trade shows. Not this year — for us or for the rest of the country. The first sign was last month during our trip through Chicago's O'Hare International Airport. Even though a snowstorm canceled or delayed dozens of flights, we found short lines, plenty of places to sit and wait, and few people traveling.

February 01, 2009

In past years, the first quarter kept the industry bustling with trade shows. Not this year — for us or for the rest of the country. The first sign was last month during our trip through Chicago's O'Hare International Airport. Even though a snowstorm canceled or delayed dozens of flights, we found short lines, plenty of places to sit and wait, and few people traveling.

Then, news started trickling in of equipment manufacturers pulling out of equipment exhibitions such as The Rental Show, World of Concrete, and Intermat. Official reasons typically centered on the economy. Some said they would redirect that investment to customer support and service — excellent news to many end-users who rely on OEMs and dealers for product support.

Another reason for pulling out may be that end-users simply are not buying. According to comments on our industry group at LinkedIn.com, Construction Equipment, purchasers are hesitant. For a manufacturer, that caution means fewer show attendees and a more difficult marketing sell as the return on investment in show space diminishes.

ROI in a down market becomes more important. Managers feel the tightened grip on the reins as all spending faces justification. In a market such as this, those reins are being held in a vise-grip.

As managers of fleets that represent a sizable portion of a business's capital investment, you're going to feel that grip tighten even more this year, at least in these upcoming months. The equipment operation's ROI will be scrutinized, but the last response fleet managers should consider is retreat.

Nobody will question a decision to not purchase a new machine. But a fleet must still be managed. Preventive-maintenance schedules must be maintained; fleet age must be balanced; rebuild/replace work must continue.

For more than five years, Mike Vorster has advised readers on the financial aspects of management; now may be a good time for review. And for alumni of our Construction Equipment Institute, we have a LinkedIn.com group for conversation with peers: Construction Equipment Institute.

Equipment fleets must be ready for work when the current crisis abates. And that's the return on investment that fleet managers must provide.

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