In this improbable desert playground, they say, you can buy just about anything that catches your fancy. But not everything: New visitors hoping to pick up an all-terrain horizontal directional drill with 27,000 pounds of pullback force and standard backreaming adjustments, for example, are too late.
Ditto for those in search of an excavator-mounted stump mill. Or a 44-foot-long vibrating grizzly feeder, equipped with a single-toggle jaw crusher. Those items, too, are going to be hard to find along the Las Vegas Strip, now that the big party’s over.
Every three years, the heavy-equipment industry gathers in Las Vegas to conduct a mammoth show-and-tell known as Conexpo-Con/Agg. As usual at the five-day expo that recently wrapped up at the Las Vegas Convention Center, the crowd was big–more than 111,000 people attended–and the equipment the visitors looked over was really big.
Attendees saw pile-driving equipment larger than some houses and stared up at a mini-forest of cranes reaching high into the blue desert sky. They marveled at the JCB Dancing Diggers, an octet of backhoes that hydraulically rear up to perform a choreographed routine, much like steel Lipizzaner horses. They gazed at a hydraulically operated rock-breaker–a giant jackhammer, in other words–that stands almost 12 feet high.
Many of the outsized products on display proudly claim to pound, pierce, dig, dump, smash or flatten things better or faster than ever before. Not everything is better than ever, though: Since hitting a cyclical peak in 1998, sales in the equipment industry have dropped about 30 percent, and 2002 is expected to see an additional drop of about 10 percent. Most experts think it will be 2003 before a solid profit rebound takes hold.
Although this year’s crowd was about 11 percent smaller than the record throng of 125,000 that poured into Las Vegas for the last show in 1999, “we were a little surprised the attendance was as good as it was,” said Jim Mitchell, manager of marketing communications for Deere & Co.’s construction equipment segment.
The contractors who came “were really upbeat,” he said. Of course, Mitchell added, their good cheer might be due in part to the fact that “contractors love new equipment, love looking at it and climbing all over it.” For the contractors who build America’s roads, bridges, malls, tunnels and skyscrapers, he said, Conexpo is a once-every-three-years chance to look and see all the new gear.
Showcasing brands
And the industry’s big players don’t hold back. Case Construction Equipment, a unit of Lake Forest-based CNH Global NV, had a hundred employees on the scene. Conexpo isn’t primarily a platform for generating direct sales, explains Bill Seidel, senior director of marketing for the construction group.
“It’s more of an imaging and positioning effort for us.” Seidel said. “We’re selling the Case brand.” Racine, Wis.-based Case, like many other players, used the expo to introduce a number of new products.
Peoria-based Caterpillar Inc., the industry’s biggest player, shipped more than 300 employees out to staff company-sponsored events in Las Vegas, says a spokesman.
In addition to the dinosaur-size dozers, excavators and mining trucks on display at Cat’s 50,000-square-foot exhibit, the company sponsored a fashion show featuring Caterpillar-brand clothing and footwear, held a luncheon for Wall Street analysts and laid on a big dinner-and-drinks evening for clients and Cat dealers at the Flamingo Hilton hotel and casino.
“You gotta do whatever it takes to move the iron,” said Midwest Research analyst Mark Koznarek, referring to the dancing diggers, the eye-catching can-can dancer at a French equipment-maker’s display and the excavators that demonstrated their agility by picking up basketballs and dropping them gently into a small barrel.
Pricing pressure, which Caterpillar and other players blame on industry overcapacity, has battered profit margins for equipment-makers for years.
The key question for the equipment industry, Koznarek says, is why demand hasn’t been stronger, given that funding for highway and bridge work has been relatively healthy in recent years and housing starts–a key industry driver–have remained very solid throughout the nation’s economic slowdown.
“Construction activity has been strong without generating solid demand for equipment,” he says. “It’s a phenomenon.”
Holding off purchases
Many of the hard-used pieces of gear employed in open-pit mining, timber harvesting, road building and excavation normally are replaced after three or four years on the job. Cost-conscious customers can defer replacement for a while, but eventually they must buy new equipment. The question for the industry is when.
A number of companies say they expect a bad 2002 first half will give way to a stronger performance in the latter half, but Koznarek isn’t so sure. Given the fragility of the economy’s rebound and other factors, he says, there’s reason to wonder if the hoped-for second-half strengthening may not simply be wishful thinking.
“We can see definite gloom through midyear” for the industry, Koznarek said, “and then there’s a glimmer of hope, but we just don’t know.” Despite the apparent optimism at the expo, he says, “maybe the pent-up demand isn’t there yet. Maybe it will be next spring” before the holdouts give in and start buying new gear in quantity.
Financial issues aside, the 1.9 million-square-foot show presents an astonishing spectacle, filling the convention center and spilling onto the asphalt lots outside.
Not too far from the Stardust Casino, Vermeer Mfg. Co. unveiled a mammoth piece of terrain-busting equipment that resembles a medieval siege device. A Japanese producer, Sakai, showed off a model unromantically named the SV400TB vibratory soil compactor with padfoot drum and strike-off blade. The SV400TB is poised in a realistic action pose atop sand that has been trucked in and dumped onto the parking lot.
Hands-on event
Throughout the parking lots and the huge halls of the fair, large, laconic men stare with ill-disguised admiration at spotless work vehicles sitting on carpeted asphalt, and the sound of blunt commerce is everywhere.
“Go on, climb on up in there,” says a sales rep to one willing attendee. The pudgy visitor, clad in shorts and Hawaiian shirt, clambers up into the cab of the digging machine and begins a businesslike checkout of the various levers. “Yeah,” he says.
“This is the biggest one in the world,” says one host, fondly patting a massive pile-driving unit sporting hydraulic hoses thick as hawsers.
One company that makes mobile hydraulic lifting systems has suspended a gleaming new cement truck six feet in the air.
At another site, a demonstrator for a producer of high-speed cutting torches is methodically cutting through half-inch steel plate, spraying orange beads of melted metal onto the ground and literally stopping some passersby in their tracks.
Not everything at the expo is larger than life. There is ground-penetrating radar that allows workers to look for buried gas mains or power lines before they dig. There are laser-based systems for establishing perfectly straight lines and level grades. Cranemaker Manitowoc Co. showed off a computerized simulator (akin to those used for training pilots) that it uses to train crane operators.
“I like to come and see what’s new” every three years, says Don Garcia, largely retired after 52 years in the asphalt paving business in South Lake Tahoe, Calif. At the Conexpo, he says, with many vendors “you don’t just meet a salesman, you can meet the company president.” And, he adds, looking out towards the Las Vegas skyline, “You get away.”
