Jerry Rossiter has been involved in the aerial platform industry for more than 30 years. Here, he looks back at the major steps in the evolution of the market, and looks forward with optimism.

On July 20 1969, Neil Armstrong was the first man to step onto the moon's surface. About that same time Armstrong was taking his famous walk, John L. Grove designed, built and introduced the first 27 foot self-propelled aerial work platform, creating the future US “Workstations in the Sky.” John's Manlift concept and designs inspired many other pioneers to “extend man's reach” and today we can reach more than 150 feet with self-propelled booms and 330 feet with truck mounted telescopic rigs, which are considered “tools-of thetrade.”

Looking at today's landscape, it is easy to forget that self-propelled aerial platforms took until 1985 to become accepted, with at that time about 5,200 scissor lifts and 2,200 boom lifts produced with revenues of $125 million. The aerial industry's rocket ship would take another 10 years to blast-off, when sales reached 30,000 units, equating to revenues of $750 million, mainly in North America.

The Hertz Equipment Rental Co. (HERC), established in 1965, was one of the pioneers and the only national equipment rental account operating in North America for more than 30 years. In 1993, HERC had 88 US branches and owned 2,400 boom and scissor lifts and were seriously considering eliminating aerial work platforms from their fleet “once and for all” due to a multitude of problems, including a lack of operator training, technical support, breakdowns and component failures.

However, JLG took the bull by the horns producing all machines to strict HERC specifications with safety kits and standardized optional equipment acceptable nationwide. HERC grew its fleet to more than 12,000 booms and scissor lifts during the 90s.

In 1996, HERC was awarded a multi-million dollar, three-year General Motors maintenance contract (renewed for another three years), since they were the only national rental company with branches coast to coast and border to border. The rest of the rental companies were either independent or regional operations.

HERC's success sparked the consolidation of the access sector. The frenzy reached its peak in ′98 as the manufactures shipped more than 50,000 units, and was driven by Brad Jacobs, who established United Rentals and grew the company to over 800 branches with 80,000 aerial platforms, deploying a similar strategy executed previously in consolidating the waste management industry. I still believe it was the award of the GM contract to HERC that inspired Brad Jacobs to consolidate the rental businesses.

Within 18 months there were 12 major consolidators in America and aerial platform deliveries soared from 50,000 to over 85,000 units. The industry was on a roll. However as the Dotcom boom evaporated, followed by the Sept. 11 attacks, the aerial work platform manufacturers went back to square one and ′98 sales levels.

The aerial platform and rental industries began to refocus, regroup and re-structure in late 2001: Genie Industries was taken over by Terex; six aerial platform manufactures closed their doors; and a couple of years later there were only six national rental companies left.

As the books were being closed in 2005, aerial work platform production and revenues were about the same as 2000 numbers, however another dramatic change was taking place amongst the top five US rental companies. The Wall Street gurus decided the US rental businesses were ripe for picking.

On December 19, 2005, a private equity consortium including Carlyle Group agreed to pay $15 billion for Hertz Corp from Ford Motor Co. Initially the group indicated it would sell HERCs 296 US operations, but the equipment rental business has been kept and revenues now exceed $1.7 billion and an anticipated 2007 EBITDA of $900 million. The group has no intention of selling HERC.

Today RSC, NES Rentals and Neff Corp are all owned by private equity groups and even though United Rentals' $7 billion takeover by Cerberus Capital Management is now off, it will surely go the same way in due course.

Another big rental player, the Ashtead Group, which owns Sunbelt Rentals and A-Plant in the UK, is I believe now on the investment bankers and private equity radar screens and ripe for takeover.

As aerial work platform revenues reach the $5 billion mark, many feel the rental businesses (who are the major customers) are still evolving and that the private equity consortiums will bring their financial and management expertise to the table, improving efficiencies and profitability with the EBITDA processes, dismissing the old “ROI” terminology and buzz word of the ′90s. Certainly, HERC is prime example as revenues increased 40% in two years and their EBITDA soared to more than $900 million.

As the market continues to mature, and having been involved in the aerial work platform industry for over 30 years in America, Europe, Africa and the Middle East, I am certain of one thing: there are still fantastic growth opportunities. It's taken almost 10 years to grow the aerial lift business from 40,000 to 100,000 units. I'm very confident we'll see the volumes and revenues doubling in the next five years.

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