Reporter: This year’s ICUEE to be largest ever

Approximately 17,000 industry professionals will attend the 2007 International Construction and Utility Equipment Exposition, scheduled for October 16-18, 2007, in Louisville, Kentucky. The show, held at the Kentucky Exposition Center, will feature 1.118 million net square feet of products and equipment for the construction and utility industries.

Held biennially, the show will feature exhibit and equipment demonstrations, as well as a Technology Pavilion. A New Products and Innovations program will spotlight products introduced since the last ICUEE. For 2007, ICUEE offers expanded hands-on working equipment demonstrations, including a “ride and drive” program for on-road commercial vehicles. The program will simulate conditions commonly found on the job to allow attendees to compare equipment in a realistic setting.

For more information on ICUEE 2007, see the show planner on page 103 or visit this site.
-Amy Materson

Sany builds in Georgia
Chinese construction equipment manufacturer Sany Group, one of that country’s largest industrial corporations, is coming to America. Sany will build a manufacturing plant in Peachtree City, Georgia, just south of Atlanta, making them the first Chinese heavy manufacturing company to build a plant in the United States.

“We are excited about establishing a U.S. presence,” says Liang Wengen, chairman of Sany. “The Atlanta region is known as ‘The New Symbol of the South’ and we believe our facility here will serve as the new symbol of business relations between the United States and China.”

The company plans to invest $100 million on the 268-acre site and will initially employ 200 workers, ultimately providing up to 500 jobs.

Sany’s broad range of products include truck-mounted concrete pumps, trailer pumps, vibratory rollers, asphalt pavers, crawler cranes, drill rigs and crawler excavators.

The Georgia plant will initially assemble what the company says is one of the largest truck-mounted concrete pumps built in the world as well as house a research and development unit. Key components of the concrete pump will be manufactured in the United States. Mack Trucks will make the chassis, Cummins will provide diesel engines and Sauer-Danfoss will supply hydraulic components.

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“North America has a large market for our products and Georgia occupies an important geographical location with convenient transportation,” says Sany America president Lincoln Liang. “But most importantly, support for foreign investment from state and local governments in metro Atlanta is coordinated and well-structured. They understand Chinese businesses.”

Sany plans to begin construction of the plant during the first quarter of 2008, with completion scheduled for the first quarter of 2009.
-Lauren Barrera

Industry Briefs
United Rentals chairman steps down

Bradley S. Jacobs, chairman of the board of directors, United Rentals, has stepped down as chairman and director. Jacobs had served as chairman since he co-founded United Rentals in 1997. The company also announced that it has filed a preliminary proxy statement with the Securities and Exchange Commission relating to the previously announced merger agreement under which Cerberus Capital Management will acquire United Rentals. The merger is expected to close in the fourth quarter.

JLG awarded $78 million Army contract
JLG Industries has been awarded an estimated $78 million contract for the refurbishment of equipment in Iraq and Afghanistan. The JLG military service team will perform the work in Balad, Iraq, and Bagram, Afghanistan. The work under the contract is expected to last until 2012 and is designated for the JLG manufactured Atlas and 6000M telehandlers, and the Case M4K and MW24C loader.

Caterpillar to produce engines in China
Caterpillar has announced the company will build small and medium Perkins and Caterpillar diesel engines in Wuxi, Jiangsu province, China. The first of the planned engine operations in Wuxi will focus on production of the Perkins 400 Series. Once the engine facilities in Wuxi are fully operational they will have the combined capacity to produce in excess of 100,000 diesel engines per year.

Wacker marks 50th anniversary in United States
This fall, Wacker celebrates its 50th year of business in the United States. The German company founded its first foreign affiliate in 1957 and today has more than 30 affiliates around the world. What began in 1848 in Dresden with only one product and three employees has become an international operation.

Brothers Peter and Hermann Wacker began their U.S. venture by marketing one product: the gasoline rammer invented by Hermann Wacker. This tool offered workers performing light compaction an option to using compressed-air powered tools. Soon the gas rammer was a fixture on construction sites.

The U.S. workforce now numbers 650 and is headquartered in Menomonee Falls, Wisconsin. Wacker currently manufactures vibratory rammers, rollers, trash pumps, generators and trowels in its U.S. plants.

In 2006, Wacker further expanded by obtaining Ground Heaters, which manufactures space and ground heating equipment. The company plans to construct a new production site for Ground Heaters in Norton Shores, Michigan. In April, Wacker announced plans to merge with compact machinery manufacturer Neuson Kramer to form Wacker Neuson. The merger will expand Wacker’s product line to include compact excavators, wheel loaders and telehandlers.
-Lauren Barrera

Cat offers computer-based compact excavator course
Caterpillar has unveiled a new training course for compact hydraulic excavator operators. The computer-based course offers study in maintenance, machine controls, safe operating practices and techniques for Cat excavators up to 6 metric tons in weight.

“The program incorporates video, sound, and a series of knowledge checks to ensure comprehension,” says Dan Bruch, North American general construction training manager. “We wanted an informative program that would engage the student, even if the individual isn’t accustomed to spending a time at a computer screen.”

The course features training in both English and Spanish, and can be obtained from Cat dealers.
-Amy Materson

Everything’s humming unless you’re in housing

If you include all types of construction: residential, commercial, public and private, construction in the second quarter of the year looks to be almost flat compared to last year. But the flat growth figures mask what Ken Simonson, chief economist for the Associated General Contractors of America, calls a nearly symmetrical split, with non-residential construction spending booming in equal proportion to the residential market’s decline.

At the close of the second quarter, year-to-date, total construction spending is down 3.5 percent. Private non-residential spending shot up 18 percent and private residential spending sank by 18 percent.

The second quarter numbers look even better for non-residential and somewhat less troublesome in the homebuilding market. Real investment in private nonresidential structures increased 22 percent. This was the largest quarterly gain since 1994 and the seventh consecutive quarter in which this component outpaced the overall GDP growth. By contrast, real residential fixed investment declined 9.3 percent, the sixth consecutive quarterly drop.

Residential issues regional
“The homebuilding segment of the industry receives a lot of negative press,” says Tim Pratt, division manager for Wells Fargo Construction. “What we’re seeing is that this is a regional issue. There are still pockets of real estate and homebuilding that are doing well, although this is not a segment of the construction business we choose to participate in.”

On the commercial side of construction Pratt sees continued strength. “Residential was so strong for so long that I think there is still a lot of catch-up work to be done on the commercial side,” he says.

Lodging construction continues it’s white-hot pace, recording a 60 percent increase year to date over the first six months of 2006. In that same time period, office construction is up 25 percent, multi-retail up 21 percent, education construction up 10 percent and highway and street up 6.4 percent.

“2006 was one of the best construction economies in history,” Pratt says. “So if 2007 is flat, it won’t be a huge negative. Many are predicting a small up-tick in the second half of 2008 and all of 2009.”

Pratt acknowledges that the subprime mortgage mess and related stock market volatility are giving some the jitters. “It may be a bigger problem than some people think, but I find it hard to believe that it would take down the whole economy. It’s such a diverse economy,” he says.

Scary headlines notwithstanding, the numbers bear this out. Real GDP grew at a seasonally adjusted annual rate of 3.4 percent during the second quarter of 2007.

Equipment values up
Although sales have slowed in the United States, prices for equipment are holding up well. Equipment inventories and lead times have shrunk a bit and demand is still good. Construction cranes are in especially high demand, with lead times of up to two years. Some of this equipment demand is being spurred on by overseas buyers who are gobbling up a lot of used equipment at auctions, Pratt says. “We’re not seeing a deterioration of core yellow iron values. Equipment is holding its value very well,” he says.

The collapse of the Interstate I-35W bridge in Minneapolis may also have a positive long-term effect on the construction market if the government develops the political will to adequately fund infrastructure, Pratt says. “The silver lining to that dark cloud may be that the funds from federal and state taxes will finally get allocated to repairs. The state of the nations’ highways and bridges is pretty dismal.”
– Tom Jackson