Industry Hopeful New Administration Will Cut Costs And Create Opportunities

After a few years of steady growth, in and around the service truck business, industry leaders are eagerly watching and waiting to see if a new presidential administration will continue that streak — or slow it.

Some manufacturers of service bodies, cranes, reels and other products say they are hopeful that U.S. President-elect Donald Trump — and a Republican-majority Congress — will carry through on campaign promises that might open up business in industries like mining and oil. Some are betting changes to regulations on everything from health care to air pollution could drop the cost of doing business. Others, however, worry that overseas concern about Trump’s economic policies could have a chilling effect on businesses looking to grow both at home and abroad.

With so much still up in the air, many say they’re cautiously optimistic, but wary of trying to predict too much about 2017 too soon.

“I think for the most part, people are in a wait-and-see mentality,” said Jim Brown, vice-president of commercial products for Omaha Standard Palfinger in Council Bluffs, Iowa. “We have seen quote activity increase now that the election is over, but I do think people are still holding on to their money fairly closely.”

Opportunities for growth

Over the last few years, many businesses have seen sales spike as companies crawled out of the recession and began upgrading and expanding after a period of much more cautious spending.

Steve Latin-Kasper, the director of market data and research for NTEA, the trade organization of the work-truck industry, said he does expect the trend to continue. Although commercial vehicle sales have increased since the end of the recession, he said truck fleets are continuing to age — which means people will still be looking to make replacements.

“The market for commercial vehicles is expected to remain stable at a high sales volume level for several years,” Latin-Kasper said.

Some in the industry, however, noted that the expansion might not be equal across the board. Companies linked primarily to the building industry, for example, have seen a boom in recent years. But those connected to other industries that have been slowed by regulation, like energy and mining, haven’t necessarily shared in the same kind of growth.

Brown, with Omaha Standard Palfinger, said drops in some industries have prompted more activity in the used truck market than in new manufacturing.

“I think (growth) is really more market driven, or industry driven,” he said. “If you look at the oil and gas industry, that’s really down  … I think once you see oil and gas come back, and mining come back, then the truck equipment industry will start to take off.

Impact of a Trump presidency

Some in the industry are hedging their bets on Trump’s stated interest in improving the country’s infrastructure, from roads and bridges to airports. While many of the specifics of his plans have not been released, Trump has said he wants to approve oil pipelines, coal export facilities, and use tax credits to spur private investment.

Dennis Slater, president of the Association of Equipment Manufacturers, said he’s hearing optimism in the machinery industry as Trump talks about his plans.

“All the talk about infrastructure and the need for infrastructure — it’s top of the agenda, where in past years it was hard to get on the agenda,” Slater said. “I think the fact that it’s front and center in dialogue means that it’s something that will happen.”

Though he cautioned that it’s too soon to make predictions about what Trump might do in office, Mike Kastner, NTEA’s managing director, said the president-elect’s campaign points to direct impacts on the service truck industry.

“In general, we expect that proposed regulations will face stronger cost/benefit scrutiny,” Kastner said.

Still, some in the industry say the topics of some of the regulations remain a priority. Doyle Sumrall, another NTEA managing director, said his organization expects that “clean air and efficient people and goods movement” will continue to be important.

“It is also anticipated that commercial fleets engaged in fuel use reduction and sustainable transportation will remain committed to pushing for more efficient and productive work trucks,” Sumrall said.

Others report that while optimism may abound among many in the service truck industry in the U.S., some Canadian industry leaders are warier of Trump. Brett Collins, president of Venco Venturo Industries LLC, a Cincinnati, Ohio, manufacturer of truck-mounted cranes, service bodies, and hoists, said he recently went north on a business trip and found that “they think we’re nuts,” he joked.

Collins said Canada’s focus on government and regulations that are sometimes more similar to some in Western Europe than those in the U.S. point to a real divide between the neighboring countries.

“Political events from around the world, as far as the election is concerned, are going to make Canadians more apprehensive,” about business, Collins said.

But Tim Davison, product manager for Stellar Industries, a manufacturer of hydraulic truck-mounted equipment in Garner, Iowa, interviewed while on a visit to Edmonton, Alberta, found Canadians sharing a different perspective.

“The discussion up here is that they’re quite happy Trump got elected, hoping he will open the Keystone Energy Pipeline,” Davison said. “If he does, it will create new markets for oil, new jobs in Canada, and that helps us out because we sell equipment in Canada.”

Davison said he’s also hopeful that Trump will reduce some of the restrictions currently placed on coal.

Changing technology

Either way, it’s clear the U.S. and Canada have much to share as the industry evolves and responds to political shifts. Collins, with Venco Venturo, said he’s looking to Canadian trends to figure out how to get more efficient, particularly through the use of aluminum crane bodies.

He’s also getting more interested in the use of European-style cargo vans as service vehicles, and in the increase in programmable logic controllers for cranes to help improve safety and accuracy.

“These are the systems that will basically take away the old-school technology of cranes, add a computer to it, and have a lot more inputs,” Collins said.

Brown, with Omaha Standard Palfinger, says he’s watching the rise of virtual reality technology. He said one of the biggest challenges at the moment is in getting the end-users of the equipment to be willing to cover the costs of the systems, which are getting increasingly complex.

“If the regulations change, and it is safety driven, it can get highly sophisticated,” Brown said. “And if the chassis manufacturers keep adding to the stability control of the vehicles, that plays a part in what manufacturers can put in one.”

Slater, of AEM, said the ConExpo-Con/Agg show in Las Vegas in March will provide a good opportunity for a glimpse into the future in a technology work area exhibit. It will showcase innovations that should help improve safety on the job or make projects more sustainable, ranging from biodegradable concrete to autonomous machinery.

“And then you already hear a lot of talk about drones, augmented reality where you can see what (a job site) is going to look like before you even get to it,” Slater said.

Workforce challenges

Slater expects that some of those developments will be key in attracting new, young workers into the industry — particularly those who grew up playing computer games or operating in programs with virtual-reality environments. He’s hopeful that the government will work with schools and private companies to expand partnerships aimed at showing young people the range of opportunities available in manufacturing and machinery to pique their interest early.

“The manufacturing of today has so much automation and they are using robotics and things to help them —and that requires a different kind of workforce, too,” Slater said. “That factory job of 30 years ago isn’t the factory job of today.”

Several employers said they’re running into the perennial challenge of finding qualified workers, particularly welders. But like business overall, they said much of the ebb and flow of the workforce in the service truck industry has to do with the current success of the industries they serve.

“When oil and gas is really booming, the railroad is booming, mining is booming,” said Brown, with Omaha Standard Palfinger. “Finding those skilled workers is even worse, because they’re chasing the dollars. They’ll jump ship for another 50 cents and hour.”

Brown, like others interviewed, said the success or failure of the next few years might be hard to predict, but one thing remains clear.

“We just need people to spend money,” he said.

Erin Golden is a writer based in Minnesota.