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Case Skid Steers and Track Loaders are the Army’s Newest Recruit
The Cost of Health Care in the Construction Industry
Kawasaki Unveils “For the Cure” Wheel Loader
JCB Embarks on Coast-toCoast Fundraising Road Trip
Wells Fargo Construction: Is the Industry Turning a Corner?
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Case Skid Steers and Track Loaders are the Army’s Newest Recruit
 Last month, Case Construction Equipment welcomed guests from the U.S. Army TACOM (Tank-Automotive and Armaments Command) as the company commemorated the recent production startup of a new line of military skid steer loaders. Case has begun manufacturing and shipping the first of several thousand model M400W skid steers and model M400T compact track loaders. Case is providing the equipment as part of a $160 million contract with the U.S. Army TACOM that could span 10 years, depending on contract renewals.
The CNH manufacturing plant in Wichita, Kan., will produce and ship more than 3,000 skid steers and compact track loaders. The long-term contract calls for as many as 1,900 skid steers and nearly 1,500 compact track loaders. The project is a boon to the Wichita plant and the local economy, with production likely to continue through at least 2017.
“Case earned this award based on our ability to satisfy all key TACOM criteria,” said Pat Hunt, Director of Strategic Accounts, Case Construction Equipment. “This includes the ability to support the vehicles with parts and technical services globally, the technical performance and reliability of our machines and our past performance in supporting other military contracts. In all these areas, Case was evaluated as ‘Excellent,’ and Case skid steers and compact track loaders were deemed to provide the best overall value to the military.”
Hunt and other Case executives participated along with TACOM officers in ceremonies celebrating both this new project and the company’s more than 150-year history of supporting the U.S. military.
Meeting Special Military Requirements
In addition to the M400W skid steer loader, Case will build the M400T compact track loader under the TACOM contract. Each unit will be shipped with a full complement of attachments — including an auger with fittings for two sizes, a 4-in-1 multi-purpose bucket, pallet forks and a hydraulic hammer with multiple attachments.
The M400W and M400T are equivalent in size and general specifications to the civilian model 420 Series 3 skid steer loader and 420CT Series 3 compact track loader, respectively.
To fulfill the Army’s special requirements, the new machines also include:
- Four tie-down and lift points to meet requirements for various means of transport, including lifting by helicopter;
- A weapons rack;
- 24-volt starting and charging system, providing the ability to power auxiliary equipment;
- Removable steel crawler tracks for the skid steer;
- A fuel injection pump that enables the machines to use JP-8 military-blend fuel; and
- A military-spec NATO slave cable receptacle that allows the machines to provide an electric jump-start to any other military vehicle.
The skid steer and compact track loader project is among several recent contract awards to Case from the U.S. military for more than 5,000 machines. For example, in 2008 Case began fielding armored and armor-ready backhoe loaders under a contract with the U.S. Army to build nearly 700 units. Some of these machines have been deployed to support the U.S. Army in Afghanistan and Iraq. Production of these units at the Case plant in Burlington, Iowa, is scheduled for completion this month.
Other current Case contracts with the U.S. military include refurbishing more than 300 M4K rough-terrain forklifts and more than 550 MW24C wheel loaders. The company provides refurbishing for military equipment at its Case Remanufacturing Center at Fort McCoy in Wisconsin. |
The Cost of Health Care in
the Construction Industry
Health care is on the tip of the American public’s tongue and you’d be hard pressed to find someone who doesn’t like at least one part of the new legislation — and that includes those in the construction industry. Large companies across the board, including John Deere and Caterpillar, are speculating that they will lose as much as $100 million dollars due to a lost drug-benefit tax break in the health care overhaul.
According to a report by National Public Radio, when Congress subsidized drug coverage, the government covered 28 percent of a company’s costs for a plan and the company could deduct the entire cost from its taxes. Thanks to the new health care reform, companies still get the subsidy, but not the tax deduction — bringing in $4.5 billion to the government at the expense of large companies like Cat, John Deere and even AT&T.
Caterpillar filed a Form 8-K, on March 24, which stated “as a result of the Patient Protection and Affordable Care Act [H.R. 3590] signed into law on March 23, 2010, beginning in 2011 the tax deduction available to Caterpillar Inc. will be reduced to the extent its drug expenses are reimbursed under the Medicare Part D retiree drug subsidy [RDS] program.”
The form goes on to report that, “as retiree health care liabilities and related tax impacts are already reflected in Caterpillar’s financial statements, the change will result in a charge to Caterpillar’s earnings in the first quarter of 2010 of approximately $100 million after tax.”
Similarly, a John Deere press release stated that the Patient Protection and Affordable Care Act will adversely impact its expenses for fiscal 2010. The company’s expenses are expected to be about $150 million higher on an after-tax basis, primarily in the second quarter. This impact was not included in the 2010 outlook for net income attributable to Deere & Co. of approximately $1.3 billion disclosed in the company’s first-quarter earnings report on Feb. 17th.
Though the bill has been signed into law, it isn’t stopping opponents of the legislation. There’s still plenty of time until the law goes into effect for amending, repealing and other political maneuvers.
Kawasaki Unveils “For the Cure” Wheel Loader
 The triumph of the human spirit is our strongest attribute. Even in the face of disease and death, we still have the ability to celebrate life. In April, Kawasaki honored such human spirit, releasing its first designed and built 70TMV-2 “For the Cure” wheel loader. At the behest of Mid-Country Machinery in Iowa, the unit was painted light pink with bright pink “Susan G. Komen for the Cure” decals, ordered by the new Kawasaki distributor as an addition to their rental fleet.
“Hopefully, this is just the beginning of our contribution,” stated Bud PeCoy, a principal with Mid-Country Machinery, a construction equipment dealer and rental company headquartered in Fort Dodge, Iowa. “We are passionate about this cause because we feel it’s safe to say that many of us have known someone with this devastating illness. Our hope is that we can not only heighten awareness, but also donate money for the research, treatment and the never-ending search for the cure.”
PeCoy, along with partners Mark Swedlund, Lucas Peed and Bob Conaway, created the breast cancer awareness campaign when they learned that one of their customers suffered from the disease. Mid-Country anticipates donating 10 percent of the wheel loader rental proceeds over the course of the next 54 months.
The Kawasaki 70TMV-2, a parallel lift wheel loader, is fitted with a JRB quick coupler and 3.4-cu yd bucket. The new Tier 3 engine boosts both power and torque, yet is extraordinarily fuel-efficient. The 70TMV-2 also has a Machine Operations Diagnostic Module (MODM) that provides essential operational and diagnostic machine information and offers an Efficient Loading System (ELS) that increases rimpull power while demanding less fuel. It also features an outboard brake system, typically found on much larger wheel loaders. The 70TMV-2 gives you great dump clearance and breakout force as well. Comfort features include increased leg room in the cab, standard air conditioning and a Ride Control option.
JCB Embarks on Coast-toCoast Fundraising Road Trip
 There’s nothing like hitting the open road, especially when it’s for a good cause. JCB, one of the world’s largest manufacturers of construction equipment, and its 3CX backhoe loader have embarked on a 26-day, coast-to-coast fundraising road trip to help rebuild Haiti. JCB hopes the “Backhoe Across America” cross-country campaign will both remind Americans that Haiti’s long road to recovery is only just beginning and encourage them to show their continued support — either by visiting one of the 11 featured route stops or by visiting the JCB for Haiti Web site (www.jcbforhaiti.com) to make a donation. JCB aims to help raise $1 million for the American Red Cross Haiti Relief and Development Fund.
No Ordinary Road Trip
The JCB 3CX backhoe loader began its coast-to-coast trek from the beach at Tybee Island, Ga., on March 26. Throughout the trip, the backhoe traveled more than 3,000 miles across the United States, making fundraising pit stops at JCB dealerships in nine cities along the way before reaching its final destination — the beach at California’s Santa Monica Pier — on April 20.
“Haiti’s road to recovery will be long and difficult,” said John Patterson, Chairman and CEO of JCB Inc. “On behalf of everyone at JCB, we hope that the miles traveled and donations secured during Backhoe Across America will help ease the burden of the journey that lies ahead for this devastated nation.”
No Ordinary Driver
JCB veteran employee Neil Smith is the man behind the wheel as the backhoe makes its way across America. When Smith was growing up in Rocester, England, he walked by JCB’s world headquarters on his way to school each and every day. Not surprisingly, Smith dreamed of operating JCB’s signature bright yellow machines — but he had no way of knowing that the family-owned manufacturer would play a major role in his life for many years to come.
Now in his 37th year with JCB, Smith is operating the 3CX machine and traveling at speeds up to 30 mph on secondary roads, which, by law, must be used throughout the trek due to the backhoe’s maximum speed limitations.
Wells Fargo Construction: Is the Industry Turning a Corner?
Times are tough, but they’ve been tougher. According to the latest Wells Fargo Construction Quarterly newsletter, the construction industry might be turning a corner.
“In January, we released the results of our annual Construction Industry Survey and its Optimism Quotient [OQ],” John Crum, National Sales Manager for Wells Fargo Construction wrote in his opening letter. “After coming off a record low OQ of 38 in 2009, the measurement bounced back to a 66 for 2010. While sentiment may not be considered overly optimistic, it is definitely up from last year. More executives than in 2009 said they plan on acquiring new and/or used equipment.”
Equipment values are also starting to stabilize. As construction activity peaked in 2006, equipment manufacturers produced large quantities of machines to meet demand.
Domestic activity then trailed off, but international demand propped up prices. When global construction activity dried up, demand for new and used machines fell and equipment values slid along with it. Recently, Wells Fargo Construction has seen a stabilization of equipment values, according to Crum. A turnaround might be afoot, but numbers of new pieces sold will remain at low levels through this year.
And while construction spending is holding, it’s doing so by a string. Wells Fargo Construction research shows that overall residential spending appears to have bottomed out and should grow, albeit at a moderate pace. However, non-residential construction activity is down almost 50 percent from 2008 through 2009 and Wells Fargo Construction expects another slight drop in 2010. Highway spending is likely to remain flat in 2010, but may be helped by the recently passed bill that extends funding for the Nation’s surface transportation system until the end of the year, the newsletter reported.
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