Terex's Tim Ford urges access industry to learn from the downturn
By Murray Pollok11 September 2009
Tim Ford, president of Terex AWP, used his keynote address at the Europlatform conference to urge the access industry to learn from the current recession.
He said it was key that rental companies manage their fleet sizes appropriately and for both manufacturers and rental companies to adopt sound credit practices.
Speaking at the event in Milan, which was co-organised by Access International and the International Powered Access Federation (IPAF), Mr Ford said some manufacturers had been guilty of supporting companies that "had no business being in business...To be clear, adding new entrants to our industry is a healthy thing...But there is a big difference between selling to a qualified start-up and selling to someone who has no cash."
He acknowledged that Terex hadn't been "entirely pure either, but we did less of it than others."
At the same time, he said, renters needed to become more disciplined in managing their fleet sizes; "To be clear, I'm not talking about conspiring with your competitor to fix markets or set prices...Rather, I'm talking about managing fleet sizes prudently - in both the upswing and the down turn - to maintain industry economics.
"We simply have too much equipment in rental fleets for the demand that exists today. I urge access rental companies to expedite your de-fleeting because the laws of supply and demand are at work...So let's get fleets sized right and then let's move forward."
Mr Ford, who urged rental companies to partner with manufacturers ("If I were running an access rental company, I would demand that my equipment supplier help me solve my business problems."), warned that the industry would take time to recover; "you have to accept the reality that the downturn is going to be longer and deeper than you can possibly believe it will be...
"At Terex, we're taking the view that this downturn is likely to affect the access rental industry through at least the middle of next year. We expect a return to growth by 2011, assuming the economy doesn't suffer a relapse. The worst is likely behind us, but it's not over yet."
Mr Ford predicted that there would be failures of both rental companies and manufacturers before the market fully recovered, and said that Chinese manufacturers were likely to play a bigger part in the industry; "Make no mistake about it, Chinese equipment manufacturers are on the rise. And while the quality of their products today is inferior to US or European companies, they will improve.
"It seems increasingly likely to me that cash-strapped western manufacturers will be forced out of business or will be purchased by cash-flush Chinese competitors looking to establish a foothold in Europe or the United States."
Mr Ford's keynote speech opened the Europlatform conference on 15 September in Milan. See www.khl.com for further reports on the conference.