Conference Report 2009

Industry should embrace sound credit management practices, urges Terex AWP president

The powered access industry needs to embrace sound credit management practices and to be more disciplined in managing fleet sizes, said Tim Ford, president of Terex Aerial Work Platforms, at the Europlatform conference on 15 September 2009 in Milan, Italy.

“The downturn is going to be longer and deeper than you can possibly believe it will be,” said Tim Ford to the audience of about 100 senior and middle managers of European access rental companies. “Companies that thrive in this economy share a few common traits. First, they have a cushion of cash relative to their peers. Second, they continue to make strategic investments despite the economy, and third, they have a willingness to ‘go for the jugular’, seizing this time to go aggressively after weaker competitors.”

Ford emphasised the importance of managing cash, sharing lessons from Terex’s daily operations. These include avoiding complex financial transactions, keeping trade terms short so as not to be hit by bad debt, selling off unproductive inventory, collecting cash and managing the supply chain to reduce incoming materials.

During a downturn where survival is the key, it is better for companies to be nimble rather than big, advised Ford. Cash becomes more important than market share. Not all items sold contribute equally to the bottom line. Businesses need to re-think their products and services and shed some of them.

He noted that with new equipment sales down 85% or more in some categories, there is not enough demand in the foreseeable future to sustain the number of manufacturers and brands that exist in the industry today.

“It seems increasingly likely to me that cash-strapped western manufacturers will be forced out of business or will be purchased by cash-flush Chinese competitors looking to establish a foothold in Europe or the United States,” he predicted.

Access rental companies have seen revenues down between 25% and 33% over last year and the outlook for near-term improvement is not rosy.

“We saw the number of aerial manufacturers decline in the downturn of 2002, from many to a handful,” said Ford. “We are likely to see a shakeout among rental companies as well.”

The call on investors, manufacturers and rental companies to manage cash coherently and responsibly was reiterated by other speakers at the conference, including Antonio Gomez de la Vega, director of JLG Financial Solutions, who examined the question of “Can Rental Companies Still Find Capital?” and Loxam’s chief operating officer Cees van der Kooij, who spoke on “Ten Things Not to Do in a Recession”.

MEWPs are safer, more productive and more economical to use: Study by major contractor

Research on “Selection of Access Equipment” commissioned by UK-based Crown House Technologies, part of the Laing O’Rourke Group, has found mobile elevating work platforms (MEWPs) to be safer and more effective compared with other methods for work at height.

“Following our study we were able to provide evidence that MEWPs are safer, more productive, ergonomic and avoid unnecessary strain injury,” said Gerry Mulholland, HSE Leader at Crown House Technologies (CHt), who initiated this rigorous assessment of work at height policies and procedures within CHt. Mulholland was speaking at the Europlatform conference in Milan. “MEWPs are also easier for site management to maintain the appropriate safe standards on site as there are fewer options offered, therefore fewer opportunities to make the wrong choice; their automation reduces accidents caused by human error. General site opinion from our workforce is that MEWPs get the job done.”

The findings were the result of a complete review of the work at height procedures (up to 4.5 metres) for mechanical and electrical installation carried out by Crown House Technologies in 2008. The research began with a series of seven road shows attended by over 170 people across the UK where CHt asked their workforce, “What do you want to work from?”

Falls from height are the primary cause of serious injury in the construction industry. CHt’s detailed review found that just under a fifth of all accidents on site are related to access equipment. A small proportion of these are caused by MEWPs (19%), compared with podiums, mobile towers, and ladders and A-frames.

The study also looked at the cost of access-related accident claims as well as repair costs. Loss and damage data was collected from a selection of projects where MEWPs were used: Heathrow Airport Terminal 5, the Royal Ascot Racecourse Grandstand, the Slough Treatment Works, the Arora Hotel at Heathrow Terminal 5, and the York Building, Marble Arch in London.

The cost of renting a MEWP is more expensive on a weekly hire rate than that of a mobile tower, the second most expensive work at height method, or other options such as podium steps. However, CHt is expecting that in the future, it will see fewer falls from height and fewer accident claims.

Reviewing the personal injury claims data, CHt found that over a two-and-a-half-year period, podiums accounted for 41% of claims costs while MEWPs were 11%.

CHt undertook a series of time and motion studies using different types of access equipment on two different projects. These were used to understand how long typical tasks took with the variety of equipment that had been used in the past. On average, MEWPs were found to be three times more efficient to use than mobile towers and podiums during these tests.

“The findings have led us to eliminate the inconsistent use of access equipment and standardise the selection of this equipment,” said Mulholland. “We have developed a matrix which is used to help select the most appropriate item of equipment for any typical M&E task we undertake, up to 4.5m working height, helping the user to select the right access equipment for the job.”

The study is steadily gaining recognition. The UK Health & Safety Executive (HSE) has been made aware of the findings and approach to equipment selection. The HSE will also be publishing the approach in a case study on its website demonstrating best practice with regard to workforce engagement.

Access Rentals Roundtable

Rental panelists Tim Ford (Terex AWP), John Ball (IPAF president and Height for Hire managing director), Mendes Migotto (Venpa3 managing director) and James Horsfall (senior vice president of software specialists Result Group) answered questions from the audience. Written by Murray Pollok, managing editor of Access International.

Mr Ford said that productivity rather than safety was the key driver in developing new access markets worldwide, and argued that the industry would respond differently to the next slowdown because the current crisis would leave its mark: “The great depression left an indelible mark on previous generations. This isn’t close to that, but the longer it goes on, the greater the impact on a generational level.”

There was consensus from the panelists that both access rental specialists and general rental companies with access fleets would continue to co-exist –- “there is room for both” was the general view. Mr Migotto agreed, in response to a question from the audience, that the Italian access rental sector was likely to consolidate in the coming years.

During a discussion on when markets would recover from recession, John Ball said that although eastern Europe was suffering, he did not regret buying a rental company in Slovakia last year: “I would still do it”, he told delegates. Mendes Migotto, whose Venpa company has been operating in the former Yugoslavia for over six years, said that its Slovenian rental business had been harder hit than its main Italian operation.

Result Group’s James Horsfall, who is based in the US, said there was an opportunity for rental companies to reorganise and prepare for the upturn in the current slow period, with investment in software and IT being one option.

Photos: Access International