This should certainly shake things up.
Newsletter #420 (View other news stories)
Arnold, H&E weigh deal involving NMHG brand
Salt Lake City, UT, United States
Wednesday, 22 Jul 2009
While nothing is final yet, Arnold Machinery Co may add Yale product at its Hyster dealerships in five states, linking Nacco Materials Handling Group (NMHG) brands.
"We will sell both (Hyster and Yale) brands in our Rocky Mountain territory," says Rex Mecham, president of the materials handling division of Salt Lake City-based Arnold Machinery. "What we announced was based on a change in NMHG policy now allowing single owners of a brand" to acquire and market NMHG's other brand in North America.
Arnold has agreed in principle to purchase the Yale business in Nevada, Arizona, Colorado, Utah and Idaho from H&E Equipment Services Inc of Baton Rouge, Louisiana and may complete the transaction by 31 July.
If concluded, the Arnold-H&E transfer might become the first of several geographic NMHG dealership consolidations.
Senior executives of NMHG and parent company Nacco Industries Inc met in June in Chicago to discuss possible distribution-consolidation avenues with certain Yale and Hyster dealers. Each attendee was required to sign a non-disclosure form.
"We have been looking at improved organisation designs for some time as a growth strategy and to better support our dealers and customers, and our ultimate goal is strong Hyster and Yale representation in every market," says Colin Wilson, vice president and chief operating officer for NMHG in Greenville, North Carolina. "NMHG has not changed its view with regard to consolidation of brands. There is a Yale brand, and there is a Hyster brand. The two brands will not be combined."
NMHG managers and dealers are aware of an effort at joint venture Mitsubishi Caterpillar Forklift America Inc (MCFA) of Houston, Texas. Beginning in 2006, MCFA established a two-brand, one-channel distribution strategy (Forkliftaction.com News #217) for its Caterpillar and Mitsubishi forklift brands. Wilson says the NMHG approach is not the same as MCFA because NMHG will continue to offer a full product line through both the Hyster and Yale dealer channels.
Arnold Machinery and H&E reached an agreement in 45 days. Al Richer, chairman of Arnold, called John Engquist, H&E president and chief executive officer, on 1 June, according to Mecham. Top executives of each firm met on 6 and 7 July, and, internally, Arnold disclosed the agreement 15 July.
"It is the goal of both H&E Equipment Services Inc and Arnold Machinery Co to make this transition as smooth as possible to both the company's employees and our valued customer base," the announcement says.
Eight branches slated to add Yale include Arnold locations in Las Vegas, Nevada; Tucson and, for the Phoenix market, Laveen, Arizona; Colorado Springs and Denver, Colorado; Salt Lake City and St George, Utah; and Meridian, Idaho for the Boise market.
A senior H&E executive acknowledges, "We are in discussions (with Arnold). Nacco has a desire to consolidate where they can," but, as of 20 July, NMHG had not officially approved any deal.
Arnold Machinery started working with the Hyster brand initially via a verbal agreement in October 1944. On that basis, "we claim to be oldest independent Hyster dealer in the country," reports Mecham, who started with Arnold in 1974.
Prior to factoring in the H&E assets, the material handling division accounted for 40% of Arnold business, according to Mecham. Other Arnold divisions focus on mining, construction and farm implements.
Mecham identifies upcoming goals: "Increase marketshare for Hyster and Yale, not diminish either brand" and organise service, parts and inventory resources "to take care of these two products."
"Over the years, we have tried to expand and grow," Mecham adds. On 1 October 2008, Arnold purchased the Hyster rights for North Dakota, Minnesota and western Wisconsin from RDO Equipment Co of Fargo, North Dakota, a major John Deere equipment dealer. In April 2006, Arnold acquired the Hyster market for Colorado and most of Wyoming from Materials Handling Co of Denver.
In addition to Hyster and soon Yale, most Arnold locations represent the Sellick, Bendi, Drexel and Combilift brands, and some branches carry the Manitou, Shuttlelift, Hoist Liftruck and Taylor Dunn lines. Also, Arnold sites stock forklift attachments from Cascade, Brudi and Bolzoni Auramo.
In existing locations in the Rocky Mountain region, H&E is expected to retain its aerial work platform business involving Genie, JLG, National Crane, Manitex, Elliott, Tadano and Lift-A-Loft brands. Other core H&E categories involve cranes and earthmoving equipment. H&E also represents Komatsu, Skyjack, SkyTrak, Bobcat, Taylor and Blue Giant brands.
Publicly traded H&E has 63 full-service facilities in various US regions and reported a profit of USD43.3 million on 2008 sales of USD1.07 billion.
H&E acquired the assets of JW Burress Inc of Roanoke, Virginia with 12 locations in four middle Atlantic states for about USD144.1 million on 1 September 2007 and the assets and some liabilities of Eagle High Reach Equipment Inc of La Mirada, California with four locations in southern California for about USD66.3 million on 28 February 2006.
NMHG Holding Co is a subsidiary of publicly traded Nacco Industries of Mayfield Heights, Ohio and, through NMHG, designs, engineers, manufactures, sells, services and leases forklifts and aftermarket parts under the Hyster and Yale brand names. Two reportable business segments are wholesale manufacturing, known as NMHG Wholesale with 2008 sales of USD2.74 billion, and retail distribution, known as NMHG Retail with 2008 sales of USD84.2 million.
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Agreed!
Sales Department sells the first unit.
Additional unit sales are the result of Product services, Parts and Service Support.
I guess the CHinees and Japanees still do not realize, and possibly the Koreans.
The Doc is old and wise.
Product support continues further sales, Not Price.
Welcome to the USA, Newest Third World Country.
Doc
it will all come down to service if the chinese can get their act together then most companies will find it hard.
Most companies make money on big trucks but Helli have got a truck that has a look of a Kalmar so why pay ex amount when you can get a simulare product at a lower price. If you was to strip many down you will find 80% of the conponats are the same. So what it will come down to at the end of the days is who can have there trucks back up and running quickest at a competitive price. This will also go for small trucks
Thre's a big shake up in Chicago with all of the forklift companies. I have never seen it so bad. If you believe that all employees are disposable then you better believe the smart ones will be your strongest competition, hitting you where it hurts most in the pocket. Years ago I remember hearing service was the neccessary evil now it's sales. There is no profit. Toyota out here is selling under cost just to move iron. Yale and Hyster were so busy cutting each others throats to get market share they lost there main focus - TOYOTA and now the Chinese are getting into the mix. My point is good service and quality people will always win out. Employers better have a good handle on who there cutting loose.
Wow I think you are being a little too "Romantic Iceman, In todays economy I really believe all employees are disposable. Also, no amount of integrity is going to increase new truck sales or stop the closures of small to medium size companies that are providing the parts and service dollar to the very companies that are fueling the rumors we are talking about. Dont get me wrong, I get the service and support thing your leaning towards. I could'nt agree with you more. But you cant fault a manager or owner for hiring when times were good, and then expect them to make payroll even though the lost 50 to 60% of their overall revenue within the last 14 months.
I could not agree with you more!! Rumor should never be substituted as truth!!!!! Integrity should be given until action and truth earn a different calling.
Dun and Bradsdtreet works well for larger companies but for smaller companies, like most forklift dealers, they are far from accurate because most small companies don't give them any information so they rely on only public information and then they "guess" at the missing pieces.
We have dealt with some huge companies that pay terribly. Why, because they know they can and still get vendors to sell to them They figure- who wouldn't want their business. It has no negative effect because they know everybody will give them automatic credit and their bad payment histoiry has no negative consequences as far as they are concerned.
My initial point was that I have read alot in these forums about this and that company doing bad or going down and my question is how would you know.
At the beginning of our current economic mess when large banks and institutions were failing I heard a reporter say about other healthy banks that as long as your company's name comes up in the news that it may have difficulties, then just by mentioning the companies name it would probably fail no matter how healthy it was.
So talk about integrity.. If it's a rumor then it should be prefaced that as such and not announce it as a statement of fact.
To All,
Yes there are companies that do it right and wrong. We all know these things happen. I am going to be a bit of a romantic here. What about the people? Too many Managers forget the responsibilities to their employees, customers, and vendors. A lot of bad decisions had to be made before a company closes or even starts to face income problems like that. Whatever happened to good old fashion American integrity? Our country was built by it, and the lack of it will tear us apart. As Managers / Owners we are responsible for the people we hire and their respective families. Remember that the next time you hire someone. Ask yourself the question, are they disposable labor? When you take on a new customer, can you keep the promises you make? When you represent a manufacturer, are you doing the very best to bring them to market and support the product you sell? Some of the old ways of doing things were not bad they just required effort.
I would think a Dunn and Bradstreet (D&B) report might give a better picture of a companies "health" than guessing about some bill not being paid, I know plenty of healthy companies that have firm rules about paying a bill when there is no invoice signed that has had them put on some vendor's "cash only" lists, that had -nothing- to do with 'could the bill be paid".
-Bouncing- an employee's pay check should be a sure sign the doors are closing, at least in most states in the USA.
Kind of like when the IRS puts it's own pad locks on the door, is a good sign the company has some money problems.
I don't know how anyone would know the financial health of a privately held company unless they were bouncing their employees pay checks. I suppose that you could surmise that they were having problems if they didn't pay a bill to you on time but that doesn't mean that they weren't paying all of their bills on time.
With the current economic conditions and the financial health of Yale/Chase, I can't see where they are in a position to aquire Hyster in So Cal, although Chase has done a pretty good job with JCB the hiring of all the Clark Techs has not gone well with 75% of them already having been laid off or leaving for other reasons. Other decisions made over the course of the last 4 years are creating problems that will not be easy to over come in the first half of 2010
Edward,
Here is one that is not a rumor. In the North East a Yale dealer just consumed a failing Hyster dealer. The old Hyster crew was told that there employment was terminated. They were then told to fill out applications that they were handed. They were then told that interviews would be done by the end of the week. By the end of the interviews half of the staff was not rehired! This comes down to simple economics! The failing Hyster dealership did not have the revenue stream to support the existing payroll. How many companies do we know of that can incurr losses for long periods of time and still exsist in these times? Save what you can and rebuild from there. What else can they do. It was nice to hear of a winner. Thank you!!
I should not be such a cynic though, there was just a buyout that was mentioned on forkliftaction, where I heard a rumor (that I have no reason to doubt but it is 3rd person info), the new owners kept all but 1 employee, and the employees all kept their seniority, and the new owners even had a more liberal vacation policy than did the old company so all the employees who went with the company actually got a better deal by staying with the company.
you can win sometimes too.
edwardt: no i haven't been on the recieving end of a buyout..2 independent dealers in the 90's and a factory branch til 2003...then private sector til 2006 and i'm still at an independent dealer.....But one would hope i can retire from here...but based on the economy your guess is as good as mine..............rhyan h i totally agree.....If your honest and do business in an honest fashion you will go down in history as good business person with good ethics,morals and standards......you are in a minority these days...shady/illegal business activities you should be treated accordingly prison,lose the business whatever...........
I understand business as I owned a small business for 11 years before I was sucked into the material handling world. I was completely upfront with my employees and told them about the sale. I told them if they wanted to stick out they could or if they found other employment good luck. Although the truth may hurt, as Tiger can tell us, honesty truly is the best policy. Come clean and I guarantee you the good dedicated employee will stick it out and give his all to the very end.
chubill, was that in 2004 that the dealership (with the unmentionable name) changed something (that can also remain unmentioned), or was there some other thing going on in 2004 that lead you to this "change of faith"?
Your probably right Edwardt, they would'nt say a word for fear of losing their customer "Equity" for a potetial buyer to half their techs hiring in-house with all their big guarenteed maint: accounts. You guys in Illinois and Michigan should start planning your plan b's right now. The minute you guys get the real story will be the same day they fire everyone and re-hire half of you. I was a road tech for 6 dealerships in So cal for the last 20 years, and one I wont mention in this forum in Fontana did exactly that. I suggest to all of you to look for that perfect in-house gig. I finally found mine and its alot more stable and rewarding. I miss the different truck and location and challenge from day to day associated with the "Freedom of the road", but my faith in the independant dealership died in 2004. Good luck guys.
michael_b said; "dealership should also tell it's employees whats going to happen just in case the dealership loses it's agreement so the employees have ample time to look for other jobs"
I take it you have never been the employee of the one being sold?
Well good to hear that! I was wondering about the hyster yale territories and if the bigger dealer with the better numbers and footprint is always best? from what i see in this forum the dealerships are stripped of their products with no leg to stand on? Just curious.............you would think naaco would pay the dealership some kind of settlement up front.......and give a good timeline to have the dubunked dealer come up with another brand before stripping the franchise? Just good business practice? But that dealership should also tell it's employees whats going to happen just in case the dealership loses it's agreement so the employees have ample time to look for other jobs........... In times like these it definately would be smart to be an independent dealer and not to put your eggs in one basket with anyone........
The deal is not done and won't be for awhile. Anyone who thinks us dedicated employees are clueless is sadly mistaken. This has been in the works for quite awhile. Last year at this time Pape Material Handling was going to purchase us now its Alta Lift. Us dedicated employees will continue to do our jobs to the best of our abilities keeping our dedicated employees in mind the whole time.
so were is united based out of? where's out here? indiana or illlinois? Of course were not being told anything but nothing will be said until the ink is dry...hopefully this will stimulate sales and new leads......And the ability to move up the ladder for everyone.......
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