Revitalizing the Rentals
The Nation's New Economic Stimulus Package Provides Interesting Rental Incentives
Compiled by The American Rental Association

With election season in full swing, the government wants to quell any rumbles about a recession. In January, Congress took quick action (extremely quick for Congress) to design an economic stimulus package that targeted government spending and tax incentives hoping to stimulate businesses and consumers to invest, spend money and spur economic growth.

On Feb. 13, President Bush signed H.R. 5140, The Economic Stimulus Act of 2008. In total, the impact of the Stimulus Package amounts to more than $152 billion, or about 1 percent of Gross Domestic Product (GDP). Two specific provisions in the Stimulus Package will affect rental companies and their equipment purchasing decisions in 2008. Americans will see an enhancement of section 179 and a 50 percent bonus depreciation allowance.

Enhancements to section 179 include the amount at which business owners can expense on new purchases made in the 2008 tax year. Under the current law, a maximum amount of $128,000 was allowed to be expensed on the purchase of qualified property that did not exceed $510,000. With the enhancement under the Stimulus Package, the government is increasing the expensing limit to $250,000 with the total qualified equipment purchase increasing to $800,000. This means a reduced tax liability on new equipment, allowing more dollars to be spent in the current tax period.

The 50 percent bonus depreciation provision allows taxpayers and business owners to increase the amount of depreciation deduction in the 2008 tax year. This means that in addition to the normal depreciation of equipment in year one, any purchase made in 2008 will be eligible for 50 percent bonus depreciation. For example, consider a five-year asset with 20 percent in normal depreciation that costs $30,000 when purchased in 2008. This equipment is eligible for $15,000 (50 percent) in bonus depreciation, plus $3,000 in normal depreciation of the adjusted basis of the equipment after bonus depreciation ($15,000) for a total of $18,000 in depreciation for the current tax year.

Businesses that qualify for the section 179 enhancement can also take advantage of the 50 percent depreciation allowance on property they do not expense under section 179. However, all property must meet the following conditions to qualify:

1. Property to which modified accelerated cost recovery system applies with a recovery period of 20 years or less
2. New property purchased after Dec. 31, 2007
3. Property placed in service before Jan. 1, 2009

There are some special exemptions to these qualifications for certain narrowly defined types of property. Most rental businesses will purchase property that will meet these qualifications, but all business owners are advised to check with their tax professionals to determine the rules that apply to specific purchases.

“We are very excited about what the Stimulus Package means for the future of the rental industry,” stated Christine Wehrman, executive vice president and CEO of the American Rental Association (ARA). “There has been much uncertainty about growth potential and the purchasing of new equipment, so this is welcome news. The fact that President Bush signed the bill into law during The Rental Show was fantastic timing for exhibitors and show attendees.”

The American Rental Association (www.ARArental.org) is an international trade association for the owners of equipment rental businesses and the manufacturers and suppliers of construction and industrial, general tool and party and event rental equipment. ARA members, which include more than 7,500 rental businesses and 1,100 manufacturers and suppliers, are located in every U.S. state, every Canadian province and more than 30 countries worldwide.

Lady Luck Visits The Rental Show

Luck was a lady recently for Sonny and Nadine Parker of Big Moose Rental Center, Priest River, Idaho, at The Rental Show. They won a 2008 Harley-Davidson Softail Deluxe motorcycle from Doosan Infracore Portable Power. The Harley-Davidson giveaway took place during the American Rental Association’s annual tradeshow in Las Vegas, Feb. 11-14.

“We’ve never won anything like this before,” said Sonny Parker. “We had good luck gambling that week in Las Vegas and I had a feeling we’d win something. I never thought it would be a Harley-Davidson.”

Sonny and Nadine Parker own Big Moose Rental Center & Trading Post in Priest River. They rent and sell a variety of equipment for homeowners, contractors and local resorts. This was the first year the Parkers attended The Rental Show, as they had just joined the American Rental Association (ARA) last June.

Doosan Infracore Portable Power, formerly known as Ingersoll Rand Utility Equipment, has been involved with the ARA for more than 40 years. Doosan Infracore Portable Power manufactures Ingersoll Rand brand generators and air compressors — portable and truck-mounted — as well as lighting systems, light compaction and concrete equipment.

The motorcycle was delivered to the Parkers in Idaho in early March. Although the idea of attending the Sturgis Rally in South Dakota this August is appealing, Sonny Parker says they will most likely tour Idaho instead. “Anyone in the rental business knows that summer is the busiest time of year,” said Parker.

Case Crowns Rodeo Series Champion

While experience with operating a loader backhoe is essential on the jobsite, this particular skill and know-how helped Nick Market of Windsor, Ontario, win the title of Case Rodeo Series North American Champion at the Case North American Rodeo Series Championship event on March 11, which coincided with CONEXPO-CON/AGG 2008. Along with the title, Market was awarded the grand prize — a 50th anniversary limited-edition Case 580 Super M Series 2 loader backhoe, valued at nearly $120,000.

From a field of 4,200 loader backhoe operators from across the United States and Canada, Market joined top five finalists Jeff Coble, Dennis Drake, Corey Jessen and Tim Reynolds for the Championship competition.

An equipment operator with Sherqy Contracting in Windsor, Market led the pack of finalists with a score of 340.37. Market has been operating loader backhoes for nearly 30 years and won the Case rodeo event held at Kucera Farm Supply in Alinston, Ontario, in June 2007.

Jessen took second place, earning a $5,000 Case gift card. A construction foreman with UBTA-UBBT Communications, Roosevelt, Utah, Jessen won the Case rodeo event held at Century Equipment in Salt Lake City in August 2007.

Reynolds took third place, earning a $2,500 Case gift card. With 29 years of experience operating loader backhoes, Reynolds, with Minot Reynolds Excavation of Orleans, Mass., won the Case rodeo event held at Sunbelt Rentals in Shrewsbury, Mass., in October 2007.

Coble took fourth place, earning a $1,500 Case gift card. The owner of JK Coble Excavating, Ottawa, Kan., Coble has 30 years of loader backhoe experience. He won the Case rodeo event at Coleman Equipment in Bonner Springs, Kan., in July 2007.

Drake, of Drake Homes, in Champaign, Ill., took fifth place, earning a $1,000 Case gift card. The winner of the Case rodeo event held at Birkey’s Construction in Urbana, Ill., in July 2007.

The rodeo completes Case’s year-long celebration of the 50th anniversary of the first factory-integrated tractor loader backhoe manufactured by Case.

Auto Crane Celebrates 50 Years

Situated on the Arkansas River, at the foothills of the Ozark Mountains, Tulsa, Okla., is home to many big businesses, from giant oil companies (SemGroup and ONEOK) to national car rental chains (National, Alamo and Dollar-Thrifty).

Tulsa is also home to rising enterprises like Auto Crane, a worldwide manufacturer of electric and hydraulic cranes, crane service bodies and accessories. Auto Crane markets its products in more than 65 countries, and in 2008 Auto Crane Co. begins a year-long celebration of its 50th anniversary. But that celebration doesn’t include plans for resting on any laurels.

“Our focus on new products and our commitment to product quality play equally important roles in why Auto Crane is considered the industry leader,” remarked CEO Bruce Barron.

“For the last several years, Auto Crane has focused specifically on developing crane service bodies and the cranes themselves, both of which helped bring us to the 2003 introduction of the revolutionary Titan Crane Body Series.”

Barron said the industry can expect the company to grow in at least two areas in 2008; the company expects to add jobs in manufacturing, administration and leadership roles, and to add new products to its current offerings. The company also plans to make at least half a dozen significant changes to the design of its service bodies.

It’s a tradition of innovation that the company established in 1958 with founders Claire Simmons and Carl White; the company designed and manufactured cranes that would pick up discarded drill bits, eliminating some of the more backbreaking work in the oilfields. The Auto Crane name was coined because the cranes were originally placed inside the trunks of automobiles.

Today the company is still relying heavily on customer research and researching changing market conditions to help bring Auto Crane to a new level of customer service. “Our customers want to use one provider for as many of their equipment needs as possible,” said Barron. “We listened to them. Since then, our product lines have become much more diversified.”

10 Years of Rental
The Cat Rental Store Network Marks a Decade of Growth

In 2008, Caterpillar Inc. celebrates the 10th anniversary of the Cat Rental Stores brand. Colorado Caterpillar dealer, Wagner Equipment Co., established the first rental outlet approximately 10 years ago. Owned and operated by Caterpillar’s independent dealer network, the Cat Rental Stores have demonstrated consistent growth throughout the world.

The Cat Rental Store network consists of more than 1,400 stores; located worldwide the combined dealer rental network had a revenue in 2007 that exceeded $4 billion.

“We are very pleased with the progress of The Cat Rental Store network and excited about the future,” said Jim Johnson, Caterpillar general manager of Global Rental and Used Equipment. “Dealers are attracting new customers while servicing their traditional customers in a more comprehensive manner. Our plans are to support Caterpillar dealers in growing The Cat Rental Store network in every region of the world to reach 2,000 outlets in the next three- to five-year timeframe.”

The Cat Rental Stores provide solutions to a wide range of customers in industries ranging from landscaping, general and building construction, industrial and road building. The Cat Rental Stores provide customers with newer model Caterpillar equipment to rent, along with a broad selection of allied products, including access equipment, compressors and related air tools, small compacting equipment, concrete equipment, concrete saws, small generators, material handling equipment, lasers, light towers, pressure washers, pumps, road sign equipment, trailers, tree equipment, trenching equipment and welders.

“The Cat Rental Store network provides exceptional customer service. Our Cat dealers provide a deep understanding of local needs, and Caterpillar adds an element of scale that enables our dealers to be more effective in the highly competitive rental business,” added Johnson.

Topcon, Sokkia Combine to Create World's Leading Survey Supplier

With more than 160 years combined in the business of manufacturing precision measuring instruments, Sokkia (founded more than 85 years ago) and Topcon (founded more than 75 years ago) have both pioneered the perfection of modern surveying equipment, used by everyone from construction contractors to crime scene investigators.

“Our companies mirror each other in the offering of full complements of survey equipment and accessories, robotics to GPS, conventional total stations to advanced data collection, from post-processing software to layout and from lasers to levels,” explained Ed Yamanaka, president of Sokkia Corp., of Olathe, Kan. “We bring to the marketplace a history of innovation, quality products and exemplary service after the sale.”

Now these two leading manufacturers of precision surveying instruments, both with corporate headquarters in Japan, have combined their company powers (effective Feb. 5). With the recent approval of the Japanese Fair Trade Commission, Topcon purchased more than 32 million shares of Sokkia stock for about $194 million; the shares Topcon purchased represent about 94 percent of the company’s outstanding stock.

“This friendly combination of two major companies with extensive product lines and excellent distribution networks creates new opportunities for customers, dealers and employees of Topcon and Sokkia,” said Ray O’Connor, president and CEO of Topcon Positioning Systems of Livermore, Calif.

Combining the two companies creates the world’s leading supplier of surveying instruments. Both companies provide turnkey positioning solutions for surveyors worldwide. Subsequent to this combination, Sokkia will become a wholly owned subsidiary of Topcon Corp. after all steps are completed. Topcon and Sokkia have offices throughout the world, including the United States, Canada, Central America, South America, Europe, Africa, the Middle East, China, Korea and Malaysia.

“It will be business as usual for both companies, with no change in brand or distribution network,” O’Connor said. “But, a combining of resources of this magnitude creates natural synergistic opportunities in the key areas of engineering and manufacturing that will allow both companies to perform certain business operations more efficiently. Combining these two strong leaders in the survey industry dramatically and positively changes the dynamics of the global survey marketplace.”

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