EUROPE - Machinery Outlook · The Hertz Corporation announced that Hertz Dayim Equipment Rental has...

machinery

OUTLOOKA Publication of Manfredi & Associates

GENERAL DISTRIBUTORS MANUFACTURERS RENTAL

Manfredi & Associates,1157 North Indian River Drive, Cocoa, FL 32922, phone (847) 949-9080, fax (847) 949-9910 www.machineryoutlookeurope.com

®

INSIDE

The content of this report represents our interpretation and analysis of inforrmation generally available to the public or released by responsible individuals in the subject companies, but is not guaranteed as to accuracy or completeness. It does not contain material provided by our clients. Individual companies reported on and analyzed by Manfredi & Associates may be clients of this and or other Manfredi & Associates services. This information is not furnished in connection with a sale or offer to sell securities or in connection with the solicitation of an offer to buy securities.

Copyright © Manfredi & Associates ISSN 1464-1313

EUROPE

HEARD IN THE DIRTTM

ISSUE 6 2014

VOLUME 6.14

The Impact of U.S. Emission Regulations On The AWP Market

As most everyone knows by now, the U.S. Environmental Protection Agency (EPA) has just about finished implementing their so-called Tier IV regulations for diesel powered off-road equipment. The regulations were implemented in phases called Tiers. On January 1, 2014, the final phase, Tier IV, was implemented,. Most categories of products are affected. Aerial work platforms (AWPs) are one of them.

The devices added to diesel engines to meet the regulations are expensive. Most diesel-powered machine prices are up between 15% and 25%, depending on the brand of engine. AWPs are a unique product category in that a fairly substantial portion of the machines, especially the smaller ones, are equipped with electric drives – batteries that power electric motors.

(continued on page 3...)

• CaterpillarChina,HugeExpansion, Renames SEM, Dual Brand Strategy

• MetsoRejectsWeir’s$5.5BillionMerger Approach

• GlobalEquipmentSalesToGrow5%In2014

• RamirentandZeppelinFormJoint Venture to Supply Tunnel Project

• Ramirent2ndQuarter2014RevenuesDown5.6%

• Toromont2ndQuarter2014RevenuesUp16%

• Cummins2ndQuarter2014RevenuesUp7%

• KomatsuFiscalYear2014RevenuesUp4.3%,1stFiscalQuarter2015RevenuesUp1.1%

• Terex2ndQuarter2014RevenuesUp10.4%,ProfitsUpMore Than 3x

• CaterpillarInEnginesBuyersLawsuits

• VolvoEngineSubsidiaryOwesEPA$72Million

© Manfredi & Associates, Inc ISSUE 6 20142

Table of ContentsAED|EDADealerMarketingReportRevealsCEDealers’MostEffectiveTactics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

BonfiglioliRiduttoriAndComerAnnouncePowertrainAcquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

CaterpillarChina,HugeExpansion,RenamesSEM,DualBrandStrategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

CaterpillarCutsCompensationforCEOby33% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Caterpillar In Engines Buyers Lawsuits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

CaterpillarSells50-YearBonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

CaterpillarToLayOff60WorkersAtSouthMilwaukeePlant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Caterpillar To Sell Its Rantigny Plant In France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Caterpillar Unit May Face Air-Pollution Fines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

CNHandMonsanto’sAnnouncePrecisionPlantingTechnologyAgreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Cummins2ndQuarter2014RevenuesUp7% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Deere Investing €30 Million In Brazilian Plant Expansion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

FinningReceivesNewDealFromHewden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

GlobalEquipmentSalesToGrow5%In2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Gorman-Rupp20142ndQuarterRevenuesUp3.1% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

HERCExpandsinSaudiArabia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

IronPlanet Awarded U.S. Department Of Defense Rolling Stock Surplus Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

John Deere Landscapes Appoints New CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

JoyGlobalAnnouncesAcquisitionofMiningTechnologiesInternational,Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

KomatsuFiscalYear2014RevenuesUp4.3%,1stFiscalQuarter2015RevenuesUp1.1% . . . . . . . . . . . . . . . . . . . . . . . . . 15

Komatsu’sSalesInChinaLowerThanExpected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

KomatsuUKReturnsToProfit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

KubotaExpandsWithDOC-OnlyOptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Largest Ever Order For Doosan Excavators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

ManitexInternationalAgreestoAcquirePM-Group,S.p.A.,ofModena,Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Manitowoc Pushed To Spinoff Foodservice Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Manitowoc/Sany Patent Infringement Lawsuit Update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

MetsoRejectsWeir’s$5.5BillionMergerApproach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

MillerUKIn$100mCourtClaimAgainstCaterpillar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Ohio CAT to Purchase Part of Cat Mining Distribution Business From Caterpillar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Oshkosh Corporation Announces Defense Employee Layoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

OshkoshFiscal20143rdQuarterRevenuesDown12.3%,ProfitsDown34.2% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Ramirent2ndQuarter2014RevenuesDown5.6% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

RamirentandZeppelinFormJointVenturetoSupplyTunnelProject. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

RingPowerSignsonWithCaterpillarGlobalMining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

SanyGetsFavorableWindFarmRuling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

TadanoTakesOverUKDealership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Terex2ndQuarter2014RevenuesUp10.4%,ProfitsUpMoreThan3x . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Toromont2ndQuarter2014RevenuesUp16% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Volvo Engine Subsidiary Owes EPA €54 Million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

ZoomlionRejectsOrdersAmidUncertainty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

ZoomlionToDeliver41CranesToSaudiContractor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

machinery OUTLOOK EUROPE ®

w w w . m a c h i n e r y o u t l o o k e u r o p e . c o m


We recently estimated the total 2013 U.S. fleet of AWPs at a little over 403,000 units. As the chart below illustrates, approximately 50% of the units operating in fleets today are electrically driven and the rest are diesel powered. The vast majority of boom lifts (86.6%) are diesel powered. Furthermore, approximately 45% of the AWP fleet are boom lifts.

Therefore, the new EPA emission regulations will have an impact on about half of the AWP market. The standards and implementation dates are illustrated in the table that follows.

(....continued from front page)



Estimated 2013 U.S. AWP Fleet

AWP Type Diesel Electric Total Fleet

Scissor 26,800 196,536 223,336 13.4% 96.5% 55.4%

Booms 172,632 7,193 179,825 86.6% 3.5% 44.6%

Total 199,432 203,729 403,161 49.5% 50.5% 100%

EPA Tier 4 Emission Standards(gallons/break horsepower-hour)

NonmethaneHydrocarbons

Engine Power Carbon + Particulate(horsepower) Year Monoxide Hydrocarbons Nitrous oxide Nitrous oxide Matter

<11 2008 6 - 5.6 - 0.3

11 ≤ 25 2008 4.9 - 5.6 - 0.3

25 ≤ 50 2008 4.2 - 5.6 - 0.222013 4.1 - 3.5 - 0.022

50 ≤ 75 2008 3.7 - 3.5 - 0.222013 3.7 - 3.5 - 0.022

75 ≤ 175 2012-2014 3.7 0.14 0.3 0.015

175 ≤ 750 2012-2014 2.6 0.14 0.4 0.015


So, how much do the EPA regulation affect companies that rent AWPs? I estimate that approximately 10% of the AWPs in the current fleet are equipped with Tier IV engines. Therefore, the impact on the operating expenses of rental companies is not trivial, but on the other hand, the full impact of the regulations has not been felt yet and probably will not be felt until 2015 at the earliest. Moreover, the quantity of AWPs that are equipped with engines rated at 75 hp or more is very small, probably less than 5% of the total AWP population. As can be seen from the above table, engines under 75 hp have far simpler emission requirements. The smaller engines do not have limits on hydrocarbon and nitrous oxide emissions that are the more difficult exhaust gases to mitigate. It is interesting to note that many of the new models of diesel powered AWPs introduced by manufacturers in the past two years are rated below 75 hp and there have been a number of instances where engines have been derated in order to slip under the 75 hp threshold.

According to Rouse Analytics, which tracks the age of equipment in rental fleets, the average age of AWPs in the nation’s rental fleets is between 52 and 57 months. This means that rental fleet operators will not be purchasing large quantities of AWPs with new diesel engines for several years.

In order to met the emission requirements, engine manufacturers have had to increase the operating temperature of the engines to assure more complete combustion. In addition, they are using very high injector pressures (up to 30,000 psi) creating other problems. The injectors wear out faster than before the regulations. In addition, under those high pressures, a pinhole break in a fuel line or hose can cause serious injury. The special injectors and high pressures require the diesel fuel to be very clean. Fuel filters are down to 2 microns. If fuel contamination is a problem on a jobsite, filters must be changed out frequently.

In order to reduce the amount of nitrous oxide emissions, most diesel engine manufacturers add urea to the air intake. There is a separate tank for the urea and it comes in several forms but is most commonly call diesel exhaust fluid (DEF), sometimes called DEF Blue. The urea combines with the diesel exhaust gases, neutralizes them, and reduces the amount of oxides, thus making the exhaust emissions acceptable. The urea is injected automatically along with the fuel.

As far as we can estimate, the cost of owning and operating Tier IV engines is higher than the previous Tier level engines. Most engine manufacturers are claiming their Tier IV engines are more fuel efficient, but we believe the reality is somewhat different. Equipment users with whom we have spoken tell us the Tier IV engines consume 5% to 10% more fuel. With the requirement to also add DEF, the cost to operate Tier IV engines is typically 5% to 10% higher than before.

For a rental company, the higher fuel consumption is probably not a problem because the customer supplies his own fuel and DEF. But rental companies will have to shoulder the added cost to service fuel injectors. In addition, rental companies will have to provide special instructions to its customers on how to properly operate the Tier IV engines. It turns out that providing customers with Tier IV engine training




has become a major expense for rental companies, but the cost to the rental company of a machine that has not been properly taken care of during the rental period is very high.

When Tier IV engines become ubiquitous, there is the issue of what will happen to the value of those machines. We estimate that in the past, 10% to 20% of used AWPs were sold to customers in overseas markets, especially in Central and South America. Those regions of the world do not have the ultra Low Sulphur Diesel fuel Tier IV engines require. Therefore, the only way Tier IV equipped machines could be sold in those regions is to remove the emission devices, a process that will add more expense to machines that are already more expensive than the machines they replaced. As a result we are predicting a decline of between 10% and 20% in used equipment values.

HERC Expands in Saudi Arabia

The Hertz Corporation announced that Hertz Dayim Equipment Rental has further expanded in the Kingdom of Saudi Arabia by opening a greenfield location in Riyadh, the country’s capital and largest city. The new location will serve Central Province-based infrastructure, commercial, government, military, construction, event services, and industrial sectors. The company is now also a registered vendor with multiple contractors of the €16.6 billion Riyadh Metro project, a 6-line, 85 station public transport construction initiative taking place over a five year period.

Lois Boyd, President, Hertz Equipment Rental Corporation, said: “Hertz Dayim Equipment Rental, the joint venture of Hertz Equipment Rental and Dayim Systems, is continuing its rapid growth across the Kingdom of Saudi Arabia. The Central Province is considered a strong market opportunity due to massive spending on large-scale urban infrastructure projects. This includes the Riyadh Metro project as well as multi-billion dollar initiatives for the financial district, medical cities, commercial centers and highways and bridges.”

CNH and Monsanto’s Announce Precision Planting Technology Agreement

CNH Industrial and The Climate Corporation have reached a non-exclusive agreement for factory integration of some Precision Planting technology into CNH planters. The Climate Corporation’s full range of services and technologies includes Precision Planting equipment to The Climate Technology Platform, including Climate Pro, FieldView, and FieldScripts. The integration of advanced agronomic decision tools provided by The Climate Corporation through CNH equipment will help farmers increase yields and operate more efficiently.

CNH Industrial and The Climate Corporation will continue to follow the principles of the Open Ag Data Alliance (OADA), an open standards software project working to ensure farmers have full data access and different agriculture platforms share common security and privacy standards. The central guiding




principle of OADA is that each farmer owns data generated or entered by the farmer, their employees, or by machines performing activities on their operations.

Caterpillar Unit May Face Air-Pollution Fines

Caterpillar Inc. disclosed in an SEC filing that its Progress Rail Services unit could face fines for alleged air pollution regulation violations. The company said Progress Rail in February was warned by the California Air Resources Board that the agency was considering an enforcement proceeding that could involve fines of more than €75,000. Caterpillar said Progress Rail had received a notice of violation in March “alleging violations of air emissions regulations applicable to compression ignition mobile cargo handling equipment” operating at California ports or rail yards serving ports. Progress Rail provides repair services to railcars used to carry goods to and from the ports of Los Angeles and Long Beach. Caterpillar said Progress Rail had taken “certain corrective action” and was working with the Air Resources Board to resolve the matter. Caterpillar added that it didn’t believe the situation would have “a material adverse effect” on the company’s financial position.

Zoomlion To Deliver 41 Cranes To Saudi Contractor

Zoomlion announced that it will deliver 41 wheeled mobile cranes to Saudi Arabia-based construction contractor Aramco, making it the largest single order since the Chinese manufacturer entered the Saudi market. The €8.3 million order also exceeds the number of Zoomlion wheeled mobiles in the country. The 41 cranes will comprise a range of models and capacities and will be put to work in a number of applications, including petrochemical projects in Saudi Arabia.

Caterpillar Sells 50-Year Bonds

Caterpillar Inc. recently sold 50-year bonds, taking advantage of investor demand for income-generating securities while interest rates remain low. According to data provider Dealogic, the construction equipment manufacturer is the first U.S. company, excluding financial institutions, to sell 50-year corporate bonds in nearly a year. Caterpillar sold €377.48 million of 50-year bonds and offered them to yield 1.375% more than comparable U.S. Treasurys. The company also sold 10-year and 30-year debt, to yield 0.80 and 0.95% over Treasuries. The 10-, 30- and 50-year bonds yielded 3.402%, 4.342% and 4.767%, respectively. The total size of the sale was €1.5 billion. The Caterpillar deal received about €6 billion in orders, said one investor following the sale. It initially planned to sell 10-year and 30-year bonds but added the 50-year later in the day. Barclays PLC, Bank of America Merrill Lynch and J.P. Morgan Chase & Co. oversaw the sale.

Corporate bonds with such long maturities typically come from companies with investment-grade credit ratings, or triple-B-minus or above. A high rating gives investors more confidence the company can repay




the debt so far into the future, though borrowers pay higher rates to borrow for longer periods. Caterpillar carries single-A ratings, making it investment grade and four notches above triple-B-minus. Corporate bond rates are tied to yields on U.S. Treasuries. The 10-year note was yielding about 2.60%.

The company is no stranger to long bonds—it issued a bond with a 100-year maturity in 1997. One person familiar with the sale said the 50-year portion was added after a “reverse inquiry”—when an investor approaches bankers and asks for bonds with specific terms. Investors said the bonds appealed to insurance companies and pension funds, which have liabilities many years into the future and often buy long-dated debt to more closely mirror what they will owe.

Ring Power Signs on With Caterpillar Global Mining

Ring Power Corporation has signed an agreement with Caterpillar Global Mining LLC acquiring the distribution and support business of the former line of Bucyrus Mining Products acquired by Caterpillar in July 2011. This agreement allows Ring Power to provide a full spectrum of Cat mining products, services and support in north and central Florida.

The expanded line of mining products is utilized in both surface and underground mining and complements Caterpillar’s existing lines. The range of products includes large electric rope shovels, hydraulic mining shovels, surface drills, underground drills, draglines, continuous mining machines and belt systems for underground mining as well as large electric-drive trucks. Over the past several months Ring Power has made significant investments in training, tooling and employees, working closely with Caterpillar to ensure a smooth transition for new and existing customers.Caterpillar To Close Virginia Mining Service Site

Caterpillar Global Mining America LLC plans to close a customer service center in Pearisburg, Virginia, this summer. The Underground Customer Service Center employs about 50 workers who rebuild and repair underground mining equipment. Caterpillar is transferring these responsibilities to dealers as part of an ongoing integration of the company’s 2011 acquisition of Bucyrus International. The company said the Pearisburg center’s workers are being offered severance packages. The company also is looking to partner with area employers who might have openings, and it is working with agencies on outplacement services.

John Deere Landscapes Appoints New CEO

John Deere Landscapes ( JDL), North American distributor of landscaping products, recently announced the immediate appointment of Doug Black as chief executive officer. Black is the former president and chief operating officer of Atlanta, Georgia-based Oldcastle Inc., a €9.5 billion building materials manufacturer and distributor and wholly-owned subsidiary of Irish-based CRH, plc. During Black’s 18-year career with Oldcastle, he helped build the company from €679.47 million in sales to the leader in




North American building materials through strong internal and acquisitive growth and industry-leading operating performance. He is a graduate of the U. S. Military Academy, West Point, New York, with a B.A. in Mathematical Sciences and an M.B.A. from Duke University’s Fuqua School of Business.

Caterpillar Cuts Compensation for CEO by 33%

Caterpillar reported that total compensation for Doug Oberhelman, Caterpillar Inc. chairman and chief executive officer, declined 33% last year. The company said Mr. Oberhelman’s total compensation for 2013 was €11.3 million, down from €16.8 million a year earlier. The decline was largely due to a drop in option awards and incentive-plan payments. Caterpillar’s profit also dropped 33% last year to €2.86 billion, mainly because mining companies slashed spending on equipment. Sales, including revenues from financing, declined 16% to €42 billion.

Caterpillar To Sell Its Rantigny Plant In France

Caterpillar is planning to shut down and sell its plant in Rantigny, France, about 65 km north of Paris. The facility, which employs 244 people, produces equipment for road paving, including compactors, planers and pavers. The company will relocate two of the three production lines to the US, and will temporarily continue to make universal or multipurpose machinery in Rantigny, while seeking for a buyer for this sub-division. If Caterpillar fails to find a taker by the end of 2015, the making of that sort of equipment will likely be transferred to Italy.

AED|EDA Dealer Marketing Report Reveals CE Dealers’ Most Effective Tactics

The following article was provided by AED:

How has the Internet influenced the way construction equipment dealers market their products and services? What marketing tactics have they found to be most effective? Equipment Data Associates (EDA) and Associated Equipment Distributors (AED) joined forces on a comprehensive survey investigating construction equipment dealer marketing practices. The results are published in the AED | EDA Dealer Marketing Report: 2014 Benchmarks and Trends in the Construction Industry, released on April 10 , and highlighted in a feature article in the April issue of Construction Equipment Distribution magazine (CED), published by AED.

“Dealers are questioning where they should spend their marketing budget. This report documents what they’ve tried and how they rate the effectiveness of those marketing tactics,” said Ross Conroy, EDA director of digital marketing. “This report contains lots of insights that can help dealers make better marketing budget decisions.”




The survey results show construction equipment dealers are transitioning away from traditional forms of marketing to digital marketing, but at a slower rate than other industries. Topics addressed in the report include spending trends, satisfaction levels, budget allocations, dealer marketing challenges, social media usage, lead sources, co-op advertising, and use of outside agencies by construction equipment dealers.

Kim Phelan, editor of CED and AED’s director of programs, said results from the survey confirmed some accepted marketing truths but also revealed some surprises. “For example, we were pretty confident that dealers rely on a healthy mix of digital, print and event-type marketing,” she said. “But we thought the marketing investment devoted to digital would be much greater by now. And trends like video, social media and content marketing are not being embraced as widely as we expected.”

In the April issue article published on http://www.cedmag.com, dealers and marketers add insight to the survey statistics. “We learned directly from dealers what their biggest marketing challenges are and what they plan to spend their marketing budget on,” said Joanne Costin, CED’s contributing editor who authored the article and the final report.

Caterpillar China, Huge Expansion, Renames SEM, Dual Brand Strategy

Caterpillar announced it has renamed SEM (formerly Shandong Shangong Engineering Mechanics Co., Ltd.) Caterpiller (Qingzhou) Co., Ltd. (CQCL). The business has been renamed to add emphasis to the company’s dual brand strategy in China (Caterpillar and SEM) and a huge expansion of the SEM-branded product line and CQCL’s production capacity. In 2012 Caterpillar expanded its hydraulic excavator production capacity at its plant in Xuzhou by 80%.

At the Qingzhou plant, Caterpillar will produce Caterpillar-branded wheel loaders (the model 950GC is presently built there) and an expanded SEM-branded product line that includes motor graders, compactors and bulldozers. Caterpillar will carry out a dual brand strategy in China to provide differentiated products to Chinese users. The plan is to transform SEM from a leading Chinese brand of wheel loaders to a provider of a full line of construction equipment. The expansion at Qingzhou to be completed by the first half of 2014, will triple the plant’s SEM-branded wheel loader capacity. In addition to its SEM-branded 160 hp bulldozers, the company will launch its 220 hp model as well. More higher horsepower bulldozers are expected.

Karl Weiss, Caterpillar’s Global Vice President in charge of the project, said the launch of Caterpillar’s 950GC wheel loader shows that the Qingzhou plant has been entirely integrated into Caterpiller Inc. and that the manufacturing level and quality specifications of Qingzhou plant have reached Caterpillar’s global standards. Meanwhile, as a practical brand with strategic significance, Shangong Engineering Mechanics will become one of the important members of Caterpillar portfolio in the growth markets of China and other areas. Differentiated value proposition of the two brands - Caterpiller and SEM - will help to render




better, broader and more comprehensive support for the company’s many clients. CHEN Qi-hua, Vice President of Caterpillar Inc. and Chairman of Caterpillar (China) Investment Co., Ltd, said, “As a new chapter composed in China by Caterpillar Inc., Caterpillar (Qingzhou) Co., Ltd. will play an important role in implementing the strategy of ‘hand in hand with China to create brilliance together’. We will be committed to an end-to-end business model in China, helping our clients to achieve success.”

Deere Investing €30 Million In Brazilian Plant Expansion

John Deere has announced it will invest €30.2 million for the expansion of its sugarcane harvester and sprayer manufacturing plant in Catalão city, Goiás state, Brazil. The company said the move is in response to growing demand for the machines and production capacity at the plant will increase 30% by the end of 2015.

The facility will be expanded from 322,917 sq. ft. to 484,375 sq. ft., which will also include the addition of a new automated paint system. The warehouse area will be expanded 75% and the truck logistics park will be improved to enhance the material flow, Deere said. The project is also expected to generate 300 jobs. Deere recently launched its new model 3520 and 3522 sugarcane harvesters into the Brazilian market. The company currently builds two sprayer models in Brazil, the 4630 and the 4730. It’s the fourth investment announced by Deere the last several years, Marobin added. “We had announced an investment of R$60 million (€19.6 million) in 2012 for the beginning of sprayer production. So investing in the expansion of the facility means offering better products and services.”

Metso Rejects Weir’s $5.5 Billion Merger Approach

Metso Corporation has rejected Scottish rival Weir Group’s €4.15 billion proposal to merge, claiming the deal isn’t in the best interests of its shareholders and that it remains confident of its growth prospects as a stand-alone firm. Weir revealed earlier that it had proposed an all-share merger to Metso that would create a group with a combined market capitalization of $14 billion (£8.5billion).

Under the terms of the proposed deal, Metso shareholders would receive 0.84 Weir shares per Metso share held, which would see the Finish firm’s shareholders owning around 37% of the combined company. The merged entity would be listed on both the London and Helsinki Stock Exchanges.In response to Metso’s rejection, Weir said it continues to believe in the strategic rationale for bringing the two companies together. However, it added that there was no certainty it would revise the terms of its original offer.

“The proposal was structured to enable the shareholders of both Metso and Weir to share in the very significant value creation that would result from material cost synergies in addition to further revenue




synergies expected to be generated through the combination,” said Weir. The all-share offer was met with a cool reception from state-owned Finnish investor Solidium, one of Metso’s biggest shareholders, which is against the deal. The proposed multibillion-dollar marriage of the companies, which make equipment for the energy and mining industries, comes amid a recent uptick in European deal activity.

Tadano Takes Over UK Dealership

Japanese crane manufacturer Tadano has taken over direct ownership of its UK and Ireland dealership Cranes UK. The Barnsley-based business has been renamed Tadano UK Ltd. Cranes UK was established by Joe Lyon in 2001 to take over the Tadano dealership that was previously held by Marubeni Komatsu Ltd (MKL). Since then, it has grown the market share of Tadano’s German made all terrain cranes in the UK and Ireland. It had sales in 2013 of £18.3 million. Tadano UK has been set up as a subsidiary of Tadano’s German operation, Tadano Faun GmbH. Joe Lyon had been looking to retire but was keen to preserve the legacy of the business he had created and maintain the jobs of his team of 17 employees.

Global Equipment Sales To Grow 5% In 2014

According to Off-Highway Research, sales of construction equipment in China, Europe, India, Japan and North America are set to grow 5% in unit terms this year. All five key regions are expected to see increased equipment sales this year, with Japan leading the way. The last time this happened was 2004.The industry fell 1% in 2013, with sales in these territories totaling 713,363 machines. This year is expected to see more than 747,000 pieces of construction equipment sold in these five major markets.

Despite two years of declines, China remains the biggest construction machinery market in the world in unit terms, with 301,200 pieces of equipment sold last year. Off-Highway Research forecasts a 1.5% increase in volumes in 2014 to 305,605 machines. Despite the turnaround in China’s fortunes, the market will still be well below its stimulus-driven peak of 487,642 units in 2011.

North America is expected a fifth consecutive year of growth this year. A 5.7% increase in unit sales is expected to take the equipment market to 162,660 machines in 2014. Western European markets are set for a similar improvement this year, following a two-year dip. Sales are expected to increase 4.5% in 2014 to 116,416 machines.

Japan meanwhile is expected to see a fifth consecutive year of double-digit growth, with sales rising 12% in 2014 to 101,718 machines. This would be the highest the market has been for some 20 years. Finally, equipment sales in India are expected to return to growth in 2014 after two years of declines. The market is forecast to rise 8.4% to 60,655 machines.




Overall, Off-Highway Research’s figures indicate the global market is returning to growth after the second downturn of a double-dip recession, following the collapse of Lehman Bros. in 2008. The initial rebound in 2010 was driven by huge stimulus spending in China. The collapse of this bubble led to a second global downturn in 2012 and 2013, even though markets in Japan and North America continued to grow during this period.

Largest Ever Order For Doosan Excavators

L.Lynch Plant Hire of Stanmore in London has recently placed the largest ever single order for Doosan excavators in Europe. The order covers the supply of 216 tracked and wheeled machines ranging in size from 14 to 38 tons and has been placed with Doosan’s most successful UK dealer, Promac Solutions of Aldermaston, which has a territory covering most of southern England. L. Lynch management stated that one of the key factors that influenced the final choice of Doosan was the availability of the latest Tier 3B engines offering customers benefits by way of reduced fuel consumption and lower carbon footprints. The order forms part of L.Lynch Plant Hire’s planned total 2014 investment in new equipment of nearly £60M and will, to a large extent, help meet the company’s rapidly growing involvement with the UK’s rail infrastructure program.

Joy Global Announces Acquisition of Mining Technologies International, Inc.

Joy Global Inc. announced that it entered into a definitive agreement to purchase Mining Technologies International, Inc. for €38.5 million Canadian dollars. MTI is a Canadian manufacturer of underground hard rock mining equipment serving the North American markets and a world leading supplier of raise bore drilling consumables. Joy is acquiring substantially all of the assets associated with MTIs hard rock drilling, loaders, dump trucks, shaft sinking, and raise bore product lines. MTI’s fiscal 2013 revenues associated with these product lines were approximately €67.9 million U.S. dollars. Completion of the transaction is subject to customary closing conditions and is expected to occur within 90 days. “This acquisition represents an exciting opportunity as the Company executes on its growth strategy to expand its underground mining product lines into the hard rock markets including nickel, potash, palladium, platinum, gold and copper,” commented Ted Doheny, President and Chief Executive Officer. “We believe that MTIs broad range of complementary products, combined with Joy’s proprietary technology, our global direct service team and operational excellence capabilities, will provide significant value to hard rock mining customers and our shareholders,” continued Doheny.

Oshkosh Corporation Announces Defense Employee Layoffs

Oshkosh Corporation announced that its Defense segment reduced its workforce in Oshkosh, Wisconsin, by approximately 700 hourly positions starting in June 2014. In addition, approximately 60 salaried




positions were eliminated starting in July with the vast majority being temporary employees and those retiring. After the layoffs, Oshkosh Defense will employ approximately 1,850 employees in Oshkosh.

“We need to reshape our workforce with U.S. defense spending down as a result of tight government budgets and a return to peacetime operations,” said John Urias, Oshkosh Corporation executive vice president and president of Oshkosh Defense. “We have gone to great lengths to minimize and delay the impact of the reduced spending on our Defense workforce. We explored and implemented a range of alternatives from not filling open positions to bringing in outside contracted work as promised in earlier discussions with the UAW, which represents our production employees, as well as continuing to pursue relevant international opportunities.” Oshkosh plans to reach out to county and state workforce development agencies and local employers to help those affected in the layoffs make the transition to other employment if they so desire. The company also plans to hold job fairs with local and state-wide employers.

Caterpillar To Lay Off 60 Workers At South Milwaukee Plant

Caterpillar is laying off 60 production workers at its plant in South Milwaukee. “As we stated late last year and more recently in our fourth-quarter release, Caterpillar Inc. continues to take actions to reduce costs and better align our workforce with business needs. While some cost reduction measures have already been implemented, further measures must be taken in the near term. As a result, we have notified approximately 60 production employees that they will be placed on indefinite layoff, effective April 14, 2014. We know this is difficult for our employees and their families, but we must take steps to position the company for long-term success.”

Kubota Expands With DOC-Only Options

Kubota announced that it has introduced four new diesel engine models with diesel oxidation catalyst (DOC)-only after-treatment from 25.5 hp to 75 hp (19 kW to 56 kW). Kubota said this further expands its Tier 4 final line-up providing additional engine options and flexibility. The four new engine models are certified by the U.S. (EPA) and California Air Resources Board (CARB), Kubota said. The launch date for the new engines will be January 2015. Kubota had previously introduced engines utilizing diesel particulate filters (DPF) as the after-treatment device.

Ramirent and Zeppelin Form Joint Venture to Supply Tunnel Project

Ramirent, based in Vantaa, Finland, and Zeppelin Rental, the parent company is based in Friedrichshafen, Germany, have formed a joint venture, Fehmarnbelt Solution Services, in preparation to provide equipment rental services to the Fehmarnbelt tunnel project. The project, the Fehmarnbelt Fixed Link, will comprise a four-lane motorway and a double-track electrified railway running on an approximately




18-kilometer section between the Danish and German coast. It will be the world’s longest underwater tunnel. The project has an estimated cost of £5.5 billion (approximately $7.5 billion), and is expected to start in the summer of 2015 and be completed in 2021. The final consortium of constructors is still to be selected after which other subcontractors, including other rental companies, can make offers.

The range of services the joint venture will provide include modular space, equipment rental services, maintenance and repair, logistic and safety management and consulting, temporary infrastructure, energy and climate solutions, facility management services, access control, waste management, training and more. FSS will offer a 24/7 service onsite with rental depots in both countries.

Ramirent 2nd Quarter 2014 Revenues Down 5.6%

Ramirent posted second quarter 2014 sales of €151.8 million (approximately $203.6 million), a 5.6% decrease compared to the second quarter last year. The company attributed the decreases to weak demand in most of its markets. For the first six months of the year, Ramirent’s volume dropped 7.7% to €289.3 million. “Slower than expected sales of equipment rental continued in many of our markets in the second quarter 2014,” said Ramirent CEO Magnus Rosen. “Second quarter net sales decreased by 2.1 % at comparable exchange rates. Second quarter EBITDA was below the previous year level at an unsatisfactory 10.7 %.

“Lower than expected demand and slow progress in the start-up of new projects impacted negatively on sales in Sweden. Our profitability in Norway was impaired by low demand from residential construction, decreased fleet utilization and increased pricing pressure. In Finland, acquisitions and recovering market demand supported sales growth. Demand picked up in the Baltic States and Poland and we have relocated fleet capacity to these markets during the first half of the year.” Rosen added that construction remained soft in Denmark, the Czech Republic and Slovakia. Ramirent, based in Vantaa, near Helsinki, Finland, is active in 10 European countries.

Toromont 2nd Quarter 2014 Revenues Up 16%

Toromont Industries, the Caterpillar dealership for Ontario, Manitoba, Newfoundland and Labrador, posted second quarter 2014 revenues of €286.5, an 11% increase compared to a year ago. The company’s equipment group revenues were up 16% to €254.4 million for the quarter on strong equipment sales, product support and rentals, which increased 11% in the quarter. Rentals for the first six months of the year increased 9% to €62.7 million. Toromont is the parent company for Battlefield Equipment Rentals, based in Stoney Creek, Ontario, which operates 38 Cat Rental Store locations.

Separately, Toromont secured a large equipment order to support the Keeyask hydroelectric project in northern Manitoba. The order includes trucks and auxiliary equipment totaling €37.9 million, €9.6 million




of which was delivered during the second quarter, with the balance to be delivered later. The remainder of Toromont’s revenue comes from CIMCO, a refrigeration systems business segment.

Cummins 2nd Quarter 2014 Revenues Up 7%

Cummins Inc. reported second quarter 2014 revenues of €3.62 billion, an increase of 7% from the same quarter in 2013. The increase year-over-year was driven by stronger demand in on-highway markets and distributor acquisitions in North America. Revenues in North America increased 14% while international sales decreased 1% compared to the second quarter a year ago. Within international markets, lower revenues in Mexico, Brazil and India offset stronger demand in China. Second quarter profits were €336.71 million compared to €312.55 million in the second quarter of 2013.

“Demand is growing in on-highway markets in North America this year as the economy improves and we have gained market share in medium duty truck and bus markets. Our Components business delivered very strong results in the second quarter generating record sales and profits,” says Chairman and CEO Tom Linebarger. Based on the current forecast, Cummins expects full year 2014 revenues to grow between 8% and 11%, up from its previous forecast of growth of between 6% and 10%, due largely to improving demand in North America.

Komatsu Fiscal Year 2014 Revenues Up 4.3%, 1st Fiscal Quarter 2015 Revenues Up 1.1%

Komatsu’s construction and mining equipment sales for its fiscal year ending March 31, 2014 totaled €12.9 billion, a 4.3% improvement compared with the previous year. The segment’s operating profit was up 15.9% to €1.78 billion, a 13.8% increase. During the past year the company saw revenues increase from sales in Africa, Europe, Japan, Latin America and the Middle East. The most significant in value were the 16.9% increase in domestic Japanese sales to €2.53 billion and the 35.1% increase in China to €1.19 billion. The biggest percentage increase was in the Middle East, where revenues were up 86.6% to €409.19 million.

However, the company saw sales decline last year in Asia (excluding China and Japan), the CIS (Commonwealth of Independent States), North America and Oceania. Most significant was the 15.2% decrease in the rest of Asia and Oceania, where revenues were €2.57 billion. The biggest decrease was in the CIS, where sales were down 23.4% to €506.5 million.

A statement from the company said, “While demand for mining equipment remained slack in coal and iron ore mines, demand for construction equipment was brisk in Japan and increased steadily in China.” Despite the improvement, Komatsu has forecast a fall in sales for the coming year due to more challenging market conditions. “Such market environment is attributable to demand in rental companies having run




its course in Japan as well as a decline in demand for mining equipment resulting from the conservative mindset of mining customers for capital investment against the backdrop of sluggish commodity prices.”

Separately, Komatsu reported increased revenues and operating income for the three months ending June 2014, fuelled by demand for construction equipment in North America, Europe and the Middle East. The company reported a 1.1% year-on-year increase in revenues to €4.82 billion, and a 21% increase in operating income to €464 million for the period.

Komatsu said demand for construction equipment steadily increased mainly in North America, Europe and the Middle East, but this had been offset to some extend by reduced demand for mining equipment around the world. In Japan, it said demand for construction equipment from rental companies “ran its course”, with a strong response from rental customers to its new generation of dozers – the D61PXi-23 and D37PXi-23 iMC models.

Komatsu said it had also seen increased demand in Japan as a result of a rise in construction investment and reconstruction in the regions destroyed in the 2011 earthquake and tsunami. In addition, it said it had expanded sales of used equipment in the country. For the full fiscal year ending March 31, 2015, Komatsu forecast expected revenues of €13.7 billion, down 3.8% year-on-year. Full-year operating income is expected to rise 1% to €1.77 billion.

Gorman-Rupp 2014 2nd Quarter Revenues Up 3.1%

The Gorman-Rupp Company reported second quarter 2014 revenues increased 3.1% to €82.8 million compared to €80.3 million during the same period in 2013. Domestic sales increased 11.9% or €6.26 million while international sales decreased 13.5% or €3.77 million. Sales in water end markets increased 1.1% or €0.53 million and sales in non-water end markets increased 5.7% or €1.35 million during the second quarter. Profit was €20.3 million for the second quarter of 2014, resulting in gross margin of 24.5% compared to 24.9% in the same period in 2013. The decrease in gross margin was due to increased cost of material primarily from the purchase of completed components for the Company’s previously disclosed Permanent Canal Closure and Pumps project driven by timing and capacity constraints, and freight costs due mostly to PCCP flood control project specialized shipments.

The second quarter increase in water end market sales was largely due to increased sales in the municipal market of €3.85 million driven by large volume pumps related to wastewater and flood control. This increase was partially offset by lower fire protection sales of €2.41 million due to timing of shipments and lower agriculture sales driven by wet weather conditions. Sales increased €1.35 million in non-water markets primarily due to increased shipments for the OEM market related to power generation equipment and pumps for residential appliances.




The company’s backlog of orders was €131.2 million at June 30, 2014 compared to €137.5 million at December 31, 2013. Incoming orders grew 12.6% during the current quarter compared to the previous quarter reflecting increased activity across both our water and non-water end markets. The €6.3 million decrease in backlog is largely due to record shipments during the first six months of 2014. Approximately €40.4 million of the PCCP project to supply major flood control pumps to a member of a joint venture construction group for a significant New Orleans flood control project remain in the June 30, 2014 backlog total. The pumps for this project are expected to be shipped primarily in the second half of 2014 and first half of 2015.

IronPlanet Awarded U.S. Department Of Defense Rolling Stock Surplus Contract

IronPlanet announced that it was awarded the U.S. Defense Logistics Agency contract to manage and sell rolling stock surplus assets of the U.S. Department of Defense. The DLA issued the final contract award to IronPlanet on July 25, 2014 pursuant to a competitive bid process that was held on April 1, 2014. Rolling stock includes surplus trucks, trailers, generators, wheel loaders, cranes, crawler tractors, and other equipment. While Surplus Contract volume will begin to flow to IronPlanet in the third quarter of 2014, the contract is scheduled to fully commence late 2014 into 2015.

Bids for the Surplus Contract were based on a percentage of the sales price of the items that bidders will share with the DLA. IronPlanet estimates €37.7 million to €52.8 million of rolling stock annually, and its bid was equal to 75.29% revenue share to the DLA. The Surplus Contract has a base term of two years with four one-year renewal options. Following the bid process, Liquidity Services, Inc. filed a bid protest with the Government Accountability Office. This protest and supplemental protests filed were denied by the GAO on July 23, 2014.

Oshkosh Fiscal 2014 3rd Quarter Revenues Down 12.3%, Profits Down 34.2%

Oshkosh Corporation reported fiscal 2014 third quarter profits of €79.3 million compared to €112 million in the third quarter of fiscal 2013, a 34.2% decrease. Net sales in the third quarter of fiscal 2014 were €1.45 billion, a decrease of 12.3%. Expected lower defense segment sales were offset in part by improved demand in the company’s access equipment ( JLG) and commercial segments.

Access Equipment – Access equipment segment sales increased 10.4% to €0.78 billion for the third quarter of fiscal 2014, a record for quarterly sales. The improvement was primarily the result of higher unit volumes in North America and Europe and higher pricing, offset in part by the absence of U.S. military telehandler sales under a contract that was completed in the fourth quarter of fiscal 2013. Sales of access equipment, excluding U.S. military telehandler sales in fiscal 2013, rose 13% in the third quarter.Access equipment segment operating income increased 8.0 % to €125.9 million, or 16.0% of sales, for the third quarter of fiscal 2014 compared to €116.6 million, or 16.4% of sales, in the third quarter of fiscal




2013. Operating income of €125.9 million was also the highest quarterly operating income ever reported by the access equipment segment. The increase in operating income was primarily the result of higher sales volume and the favorable impact of cost reduction initiatives, offset in part by increased new product development spending and higher operating costs.

Defense – Defense segment sales for the third quarter of fiscal 2014 decreased 46.5% to €355.36 million. The decrease in sales was expected and was primarily due to lower sales to the U.S. Department of Defense (DoD). Sales in the third quarter of the prior year also included more international MRAP All-Terrain Vehicles as international orders and sales tend to be uneven.

Fire & Emergency – Fire & emergency segment sales for the third quarter of fiscal 2014 decreased 8.3% to €141.5 million. The decrease in sales primarily reflected lower sales volume as a result of lower international deliveries.

Commercial – Commercial segment sales increased 27.0% to €186.7 million in the third quarter of fiscal 2014. The increase in sales was primarily attributable to a nearly 40% increase in concrete mixer unit volume. Refuse collection vehicle unit volume also rose due in part to delays in the prior year in the timing of orders from one of the segment’s largest customers. Severe weather in the second quarter of fiscal 2014 contributed to delays in chassis supplier deliveries, which impacted the company’s ability to ship completed units at the end of the second quarter. Some of the shipments were completed and recognized as revenue in the third quarter of fiscal 2014.

Manitowoc Pushed To Spinoff Foodservice Operations

Activist investor Relational Investors LLC has disclosed an 8.5% stake in The Manitowoc Company and called for the company to spin off its foodservice equipment business. Relational said in a regulatory filing that Manitowoc’s crane and foodservice segments are “core, yet incongruent businesses” that “differ materially in their operating metrics and cyclical characteristics.”

Manitowoc said in a statement that it has had several conversations with Relational and is committed to acting in the best interests of the company and its shareholders. Relational said it met with Manitowoc management in January to recommend the hiring of advisers to pursue a spinoff of the foodservice business. Relational said the company’s board has declined its request for a meeting.

Terex 2nd Quarter 2014 Revenues Up 10.4%, Profits Up More Than 3x

Terex Corporation announced that second quarter 2014 revenues were €1.55 billion, 10.4% higher than revenues of €1.4 billion in the second quarter of 2013. Profits from continuing operations of €66.2 million




for the second quarter of 2014 more than tripled compared to profits of €15.4 million for the second quarter of 2013.

“Our results for the second quarter and first six months of the year were mixed both from a business and geographical perspective,” commented Ron DeFeo, Terex Chairman and Chief Executive Officer. “Our Aerial Work Platforms (AWP) segment had a strong quarter but margins were slightly lower than a year ago due to product mix and planned investments in new product development and manufacturing footprint. We expect this dynamic to continue through the remainder of the year, although on increasing sales versus the prior year. Our Cranes segment is making progress, as bookings were roughly equal to sales during the quarter and the order entry run rate was 12% above the prior year level on a year to date basis. Our Construction and Material Handling & Port Solutions (MHPS) segments both delivered quarters roughly in-line with our expectations, while the Materials Processing (MP) segment had a more challenging quarter from a sales perspective than originally anticipated. From a geographical perspective, Western Europe and North America were the growth drivers with increases of 35% and 15% respectively, with the rest of world somewhat offsetting these strengths.”

Outlook: “The Company’s overall outlook for 2014 remains unchanged,” Mr. DeFeo added. “We expect continued strength from our AWP segment and improvement from our Cranes and MHPS segments to drive improved performance for the second half of 2014 compared with the first six months. While we see a slightly weaker end-market than we originally anticipated, from an EPS perspective, the impact on operating earnings is expected to be somewhat offset by both a lower effective tax rate and a lower anticipated share count. We reiterate our annual outlook for earnings per share of between €1.88 and €2.11, excluding restructuring and other unusual items, although now on revenues of between €5.5 billion and €5.66 billion.”

Backlog: Backlog for orders deliverable during the next twelve months was €1.66 billion at June 30, 2014, a decrease of 7.0% from March 31, 2014 and an increase of 2.2% from June 30, 2013.

Manitowoc/Sany Patent Infringement Lawsuit Update

Manitowoc recently received favorable initial determination in its patent infringement lawsuit against Sany. The United States International Trade Commission has issued an initial determination in a patent infringement and trade secrets case filed by Manitowoc against Sany Heavy Industries and Sany America. On July 14, 2014, ITC Administrative Law Judge David P. Shaw issued a notice of the Initial Determination in Certain Crawler Cranes and Components Thereof.

The investigation is based on a June 12, 2013 Complaint filed by Manitowoc Cranes, LLC alleging violation of Section 337 of the Tariff Act by Sany Heavy Industry Company, Ltd. and Sany America, Inc.




in the importation into the U.S. and sale of certain crawler cranes and components that infringe one or more claims of U.S. Patent Nos. 7,546,928 (the ‘928 patent) and 7,967,158, and that were designed and manufactured using Manitowoc Cranes’ misappropriated trade secrets.

According to the notice, the Judge determined that Sany violated Section 337. Specifically, the Judge determined that Manitowoc demonstrated that “certain accused products infringe claims of the ‘928 patent,” and that Sany engaged in the “misappropriation of certain asserted trade secrets” owned by Manitowoc.

Manitowoc is pleased by the Judge’s favorable ruling and looks forward to receiving the Commission’s final order later this year. The notice issued by the Judge released only limited information. The company will provide additional information once the public version of the Final Initial Determination is issued.

Komatsu UK Returns To Profit

Komatsu UK, based in Birtley, the U.K., has returned to profit after a stronger year in the construction sector lifted rise in demand. Komatsu UK, which employs 388 people, suffered heavy losses in the year ended March 2013, with an operating loss of £14.1 million. Revenues during that period also dropped by 20% to £140.6 million from £153.1 million the year before. This information is based on reports filed by Komatsu U.K. in England.

A strategic report accompanying the financial data said demand in the European market has been subdued since the financial crisis of 2008 but that there are signs of a recovery in demand. It noted a drop in European sales but said there was an increase in sales to other territories, including some ‘one-off ’ sales to the USA. Among the lucrative deals was an order worth more than £25m for its US counterpart, for 190 hydraulic excavators to sister company Komatsu America.

Stuart Reid, director of finance, said: “European trading conditions remained difficult in the year to March 2014, but the business benefited from additional, one-off sales to America. There will be no repeat of the American business in 2014, though there are initial signs of improving demand in some European markets. The extent of such recovery in the European markets, however, remains uncertain.”

Manitex International Agrees to Acquire PM-Group, S.p.A., of Modena, Italy

Manitex International, Inc., based in Bridgeville, Illinois, announced that it has reached an agreement to acquire PM Group S.p.A. “PM” based in San Cesario sul Panaro, Modena, Italy. The agreement is subject to pending Italian court approval of a debt restructuring plan. Manitex has agreed to pay €80.8 million in total as follows:




• €18.1millionincashprovidedbyanewManitextermloanwithcurrentManitexbankers;

• €11.3millioninnewequityissuance(approximately1millionMNTXshares)distributed primarilytocurrentPMbanks;

• €51.3millioninassumeddebtandliabilitieswhichincludesworkingcapitalfacilitiesforPM.

Trailing Twelve Months (TTM) Revenues for PM through June 2014 was approximately €80 million with EBITDA margins consistent with those of Manitex, approximately 9% of sales. The acquisition is expected to close in the fourth quarter of 2014, upon Italian Court approval. Management expects this to be immediately accretive to Manitex International’s net earnings in 2014.

PM-Group S.p.A. is an Italian manufacturer of truck mounted hydraulic knuckle boom cranes with a 50-year history of technology and innovation and a product range spanning more than 50 models. Its largest subsidiary, Oil & Steel, “O&S”, is a manufacturer of truck-mounted aerial platforms with a diverse product line and an international client base. Combined, O&S and PM add nearly 510,000 square feet of assembly and manufacturing space, spread between its two locations in San Cesario S/P, Modena, and in Arad, Romania, and sell to a broad dealer network, worldwide.

Zoomlion Rejects Orders Amid Uncertainty

Zoomlion Heavy Industry Science and Technology, based in Changsha, China, announced that it has rejected approximately 15% of incoming new orders for truck-mounted concrete pumps in the first half, fearing that China’s property market slowdown will hit customers’ ability to pay for them. The company, which warned that its first-half earnings would drop by up to 70%, also said in a briefing it is now requiring larger down-payments for new contracts.

Zoomlion is trying to reduce its accounts receivables that surged to €3.4 billion (HK$34.7 billion) as at December 31, up 47% compared to the end of 2012. New home prices in China fell in June for a third straight month, which hurt demand for Zoomlion’s equipment. About half of its business is directly tied to the property market, with the rest linked to infrastructure and other markets. To reduce its risk, Zoomlion has mandated 20% to 30% down payments for new contracts. The previous industry practice was that customers were able to purchase equipment with no money down.

Zoomlion also faces a foreign exchange headwind now that China’s currency has stopped appreciating versus the dollar. It has to pay dollar-denominated interest on two bond issues totaling €0.75 billion (HK$7.8 billion).




Sany Gets Favorable Wind Farm Ruling

Sany management recently stated that a ruling giving an affiliate of China’s Sany Group Company the right to question President Barack Obama’s order to bar a planned Oregon wind farm may prompt the multiagency Committee on Foreign Investments in the U.S. to reform.

The decision also provides a legal guarantee for foreign investments in the U.S., especially for Chinese companies. “The result means our choice is correct. We didn’t have motives to harm the U.S. national security.” said Sany president Xiang Wenbo.

The U.S. Court of Appeals in Washington on July 15 ruled that Ralls Corporation, a Delaware-based company controlled by Sany Group, must be allowed to challenge evidence the president drew on to make the decision.

Ralls sued Obama and the multiagency Committee on Foreign Investments in the U.S. in 2012 for barring the wind-farm project near an area where the Navy base conducts training for bombing and electronic-combat maneuvers and develops drones.

Obama ordered Ralls to divest all of its interests in the wind-farm project that consisted of locations near or within restricted Navy airspace. The decision marked the first overseas purchase blocked by a U.S. president on national-security grounds in 22 years.

Sany wants to seek justice and deepen understanding between the U.S. and China, Xiang said.

Caterpillar In Engines Buyers Lawsuits

More than a dozen lawsuits have now been filed against Caterpillar over its 2007-2010 year model ACERT C13 and C15 engines, as carriers claim the engines had defects that Cat knew about but that were concealed from buyers. According to court documents, a panel on multidistrict litigation has consolidated the cases and transferred them to a federal civil court in New Jersey.

Caterpillar also has submitted a legal answer to the suits brought against it, in which it denies all the allegations brought against it in the suits. All of the lawsuits center on Caterpillar’s emissions controls system, which plaintiffs claim were defective. The systems consisted of a diesel particulate filter, after-treatment regeneration device and an electronic control module.

The system had repeated failures, the plaintiffs allege, driving up their costs and driving down their resale value. Plaintiffs also claim Caterpillar knew about the defects, yet sold the engines anyway and concealed the defects from buyers. The class-action lawsuits were filed on behalf of anyone who owned or leased




a truck with a 2007-2010 C13 or C15 engine within the warranty period. Caterpillar no longer builds engines for Class 8 trucks and no longer makes the ACERT engine line.

Ohio CAT to Purchase Part of Cat Mining Distribution Business From Caterpillar

Ohio CAT has acquired the expanded Cat Mining equipment distribution and support business for its territories from Caterpillar Global Mining LLC. Ohio CAT is the authorized Cat dealer in Ohio, northern Kentucky and southeastern Indiana.

Ohio CAT assumed responsibility for the sales, marketing and product support of the expanded Cat mining products, which include hydraulic shovels, electric shovels, draglines, highwall miners, drills, belt systems, longwall and room and pillar products.

Caterpillar has announced similar transactions with other dealers over the last several months. Caterpillar continues to hold discussions with other Cat dealers that have mining activity in their territories and will continue to operate the former Bucyrus distribution business until the transitions have occurred in a given territory.

Volvo Engine Subsidiary Owes EPA €54 Million

The U.S., D.C. Circuit Court ruled that Volvo Powertrain, a Volvo subsidiary, based in Hagerstown, Maryland, must pay €54.3 million for failing to comply with a consent decree in which Volvo agreed its engines must meet next year’s EPA standards to be sold in the U.S. Under the Clean Air Act, engine manufacturers are required to conform to certain emissions standards before selling their products in the U.S. In 1998, the Environmental Protection Agency found that several major engine manufacturers, including Volvo, were evading emissions requirements with “defeat devices” designed to allow an engine to pass emissions tests without actually being in compliance.

To settle the allegations, Volvo signed a consent decree and agreed to satisfy future EPA emissions standards one year ahead of schedule. As a result, model year 2005 Volvo engines were supposed to meet model year 2006 emissions standards. But 2005 engines made by Volvo Powertrain, a wholly-owned subsidiary of Volvo, did not comply with the EPA’s 2006 requirements.

Komatsu’s Sales In China Lower Than Expected

Komatsu, Ltd., based in Tokyo, Japan, reported that sales in China are declining faster than expected. China represents 9% of Komatsu’s annual revenues. The company’s sales were down 20% year on year in the April/May period. The company also said sales in Indonesia were also likely to be significantly lower as




many mines are idled on the government’s ore export ban. In April the company had forecast that global demand for mining equipment in the financial year to March 2015 would be about 2,000 units, down 38% from a year ago, as miners continue to cut spending. In 2011, around 7,000 units were sold by the industry in the now depressed market.

Miller UK In $100m Court Claim Against Caterpillar

Miller UK, based in Cramlington, the U.K., is involved in a court battle with Caterpillar, claim-ing the company stole its engineering designs. The family firm – run by siblings Keith, Jacqui and Gary Miller – alleges fraud, trade secret misappropriation and breach of confidentiality agreements, and are seeking more than $100m in damages and compensation. The lawsuit began in the US District Court for the Northern District of Illinois in 2010.

Founded in 1978, Miller UK enjoyed a long and mutually-beneficial business relationship with Caterpillar, an arrangement which gave the American firm exclusive rights to sell the Miller Bug Coupler in the US. First going on the production line in 1999, the coupler sold through Caterpillar became a global leader and by 2007 Miller UK had sales of £38.7m, with profits topping £5.5m. Caterpillar represented one third of Miller’s business and the majority of its profits.

In 2008 Caterpillar ended the business agreement – a move Miller claims led to the loss of just under 300 of its 400-strong workforce. Miller pulled through the ensuing recession, but said it was dealt an even bigger blow when soon after that Caterpillar began making its own version of the bug coupler.

Miller UK claims Caterpillar used Millers’ own designs to make a rival coupler. Miller had supplied Caterpillar with its designs as part of its agreement. Now Miller UK is suing Cater-pillar in Illinois, claiming the company used the supply agreement to gain access to Miller’s proprietary designs. Caterpillar countered that claim by saying that the design of its own coupler was supervised by one of its own in-house engineers.

Finning Receives New Deal From Hewden

U.K.-based plant hire company Hewden has confirmed yet another deal with Finning to ex-pand its core fleet with an additional investment of £3 million, taking the total value of pur-chases in the last 12 months to £35 million. The latest purchase will see Finning deliver a fur-ther 26 Cat hydraulic excavators to Hewden. The new order consists of twenty one Cat 320EL’s and five 312E’s. This adds to the fleet of 109 excavators purchased earlier in the year and 463 C series telehandlers purchased in late 2013. The deal takes the total number of new Caterpillar core fleet products purchased in the last 12 months to 598 units.




Commenting on the deal, Hewden Director Mark Hogg, said: “Our core fleet next day delivery guarantee has been a real success, with the 109 excavators previously purchased from Fin-ning proving to be very popular. This latest purchase is testament to the success of our on-going relationship with Finning and shows just how important the combination of state-of-the-art Cat equipment and service support is in the competitive market of plant hire.”

With equipment already being delivered to Hewden sites across the country, each of the new machines will be supported by a five-year preventative maintenance service contract, alongside a five-year warranty.

Bonfiglioli Riduttori And Comer Announce Powertrain Acquisition

Bonfiglioli Riduttori, based in Bologna and Comer Industries, based in Reggiolo, both Italian drivetrain component manufacturers, have announced an agreement in which Bonfiglioli will purchase Comer’s electric wheel drive units and planetary wheel drive product lines. Starting January 1st , 2015, Comer will transfer its entire equity stake dedicated to the production of its electric wheel drive units (electrically operated wheel drives) and planetary wheel drive product lines to Bonfiglioli.

Comer said the sale allows it to concentrate and optimize its resources on “core” product lines for the agricultural and industrial sector, while for Bonfiglioli the acquisition represents an opportunity to expand its range of planetary wheel drives and offering of solutions for electromobility, in particular in the material handling sector.

Comer Industries had annual revenues of €340 million and 1367 employees while Bonfiglioli Riduttori had revenues of €614 million and 3335 employees.






• How will equipment users respond to the increased costs involved?• How will sales of new equipment be impacted?• How will used equipment sales and prices be impacted?• How will the US and Canadian equipment rental markets be effected?• How will the worldwide construction equipment auction markets be impacted?• Will changes in residual values effect lease and finance rates?• How will sales outside Tier IV markets be effected?• Will emission devices be disabled/modified for non-Tier IV markets?• What is the future for low sulpher fuel in emerging markets?

How Will Tier IV Emission Regulations Impact Construction Equipment Sales and Prices?

Your Business Will Be Impacted! Are You Prepared?

Manfredi and Associates, publisher of Machinery Outlook Newsletter, will be conducting extensive surveys of equipment users, distributors, manufacturers, and finance and lease companies to answer these and other questions and forecast used equipment prices.

For more information on the scope of this important multi-client study, contact:

Frank Manfredi, 847 922-9816

Manfredi & Associates, Inc.20934 West Lakeview ParkwayMundelein, IL 60060




-------------------------------------------------------------------------------------------------------

Subscribe to Machinery Outlook Europe NewsletterReceivethebestnewscoverageandanalysisintheworldoftheconstructionandminingequipmentindustry.Filloutand mail, e-mail or fax your subscription today. Fax number (847) 949-9910.

Mailing address: Manfredi & Associates, Inc. 20934 Lakeview Parkway Mundelein, IL 60060 (847) 949-9080 email: [email protected]

Name ________________________________ Title_____________________

Company Name _________________________ Phone __________________

Street Address ___________________________________________________

City ________________________State/Province ________________________

Postal Code _____________________Country__________________________

E-mail address ____________________________________________________

Annual Subscription Options: PerYearAnnualprintcopytoNorthAmericanaddress €420Annualprintcopytonon-NorthAmericaaddress €485Print copy plus Internet access to the electronic version (eitherNo.Americaornon-No.America) €650Electronicversiononly(includesarchivedatabase) €550Electronicversionforexistingprintsubscribers €230 (will be prorated to renew with print version)

Machinery Outlook Europe: Annualprintcopy–worldwide €995 BothMachineryOutlook&MOEuropeannualprintcopy€1295

Invoice me _____ or select a credit card option as follows:Charge my credit card: ___ Visa ___ Master Card ___ America Express

Card Number ________________________ Expiration Date _____________

Signature ________________________________________________

CALENDAR OF EVENTS

Dates Name Description Venue Contact Details

2014

JUNE 10-12 Euro Mine Expo Mining Equipment Skelleftea, Sweden www.euromineexpo.com

JUNE 24-26International Rental

ExhibitionRental Exhibition

Amsterdam, The

Netherlandswww.ireshow.com

JUNE 24-26 APEX Aerial Platforms/LiftingMaastricht, the

Netherlandswww.apexshow.com

2015

ARIL 20-25 INTERMAT 2015 Construction Machinery Paris, France paris.intermatconstruction.com

machinery

OUTLOOKManfredi & Associates1157 North Indian River Drive,Cocoa, FL 32922

EUROPE - Machinery Outlook · The Hertz Corporation announced that Hertz Dayim Equipment Rental has...

Documents

Transcript of EUROPE - Machinery Outlook · The Hertz Corporation announced that Hertz Dayim Equipment Rental has...