Construction Equipment

These web site is based mainly on Old Tractors with a name like Yesterdays (Past). I have more than a few oldest tractors the 1940 newest 1954. most of them where had for a few hundred dollars
working on them in the garage has kept me out of the bars. My new truck is a 1999, almost a billion miles.
Most of the young guys around here ( Who thought the money tree would never go away, there wifes new SUV, Boats, Motorcycles, ATV Snow etc..Toys ) Now they have had there equipment reposed, So even if they where to win a bid that can't even do it! There new Cat excavators new Tri- axel's Labor's driving a new duramax or F-450's etc...All gone !. I used to see welding hardening on the bucket, they traded up when the paint wore off or the model numbers changed. What happened to the older stuff that was paid for. Like I have said here before, I'm cheap! There's enough kid's and Grand kid's to spend my money. Is this a generational thing to have shiny and new? The hole in the ground don't care what the machine looked like that dug it. Guy up the road wanted to use my old Bobcat because he no longer has his, add another one to the list that thinks I'm a A-hole after I said no-way.

Explain to me how you can get a "billion" miles on a 10 year old vehicle. If you drive 55 MPH, 24 hours a day, 7 days a week, 365 days a year for 10 years it only adds up to 4,818,000 (or 4.8 million) miles. You must be smoking some good stuff Scooter. I gotta go

A lot of the blame can be placed on Congress' tax laws. Accelerated depreciation makes it cheaper to buy new stuff. That's good for the economy because the manufacturers are paying high priced labor to build even more new stuff. When times are good people treat depreciation as if it was income. But when the economy slows down it's a double whammy; the guys who bought the new equipment assuming it would be paid for by depreciation suddenly don't have the revenue to write it off against. And the banks who repossess it eat the bad loans. So Congress steps in to fix the problem, again.

Donnie: Figure of speech! Did your Mom ever tell you pick-up your toys' a million times 284500 + miles.

Hi Sean
The same thing has happened around here. The guys with the new cat excavators and the new
40,000 dollar pickups are going down fast. Also
I would say that 50 to 70 percent of them didn't
know how to do good quality honest work anyway.

have a good day

Jim

I had to check it out Donnie I'm waiting on my Stepson who forgot his clock back and is late.
Tuesday, February 12, 2008
1991 Chevy Silverado hits the 1,000,000 mile mark
On Friday while driving to dinner, I was listening to All Things Considered on the radio, and they had Frank Oresnik on the line, owner of a 1991 Chevrolet Silverado pickup truck that was about to cross the million-mile threshold. He talked with Robert Siegel (the host) from the road as his odometer hit 1 million miles. (Not sure what that looks like, as I had to leave the car to make my dinner reservation. Does it go back to zero?)

Yup. People are gonna be hurting. I get told that the older stuff just WON'T do it, or CAN'T do it.
Somewhere along the line, we're going to have to kill Mr Jones so people will stop trying to keep up with him....

Many of the ("hey I just got done with a big job down the road, have some extra material, will give you a good deal if you want your 10'x 20' driveway done, for like $8000.00") paving contractors around here would have new equipment every season, but have to take it all to florida or south to work in the winter, or have to sell it off, or go bankrupt etc. Every spring you would see new trucks, trailers, paving machines, rollers, skidsteers or industrial tractors with box blades etc. etc.

Some of these outfits were so inept, they could not even set up an optical level to shoot grades, lack of education, experience, business sense and financial planning, is the root of failure in these business's.

I had one on a job we did, that somehow got awarded a contract on this state job, before we took it over, as a construction manager, and we could not get rid of them, due to the contract, they should have been prequalified based on other work, but were not, what a disaster, they did not know layout, even the owner could not set up an optical level/transit, could not follow pitch/slope established by new curbs, material arrived and the temperature of the material when it arrived almost violated the specifications, was not compacted properly, mix design did not have the correct aggregate, nor enough bituminous material in the mix, we had to reject a whole bunch of work, they violated a stop work order and continued paving, all that was rejected too. The lack of layout expertise and not being able to shoot grades, cause a poding area over a valve vault, was part of a very large and new piping system on this job, flooded that, had to grant an emergency change order to another contractor to fix it and back charge them. It cost them $80,000.00 in claims when said and done, and they were defaulted for failure to perform. You see a contractor with all new equipment, and he does not know what a transit is, get em off the job immediately !

Lots of site work contractors have gone that route, you really need to know what you are doing in that business if you are going to stay afloat.

It's one thing to finance a whole bunch of equipment, trucks etc. but if you don't have the jobs to support it, jobs that warrant new or late model equipment, that you can complete, get repeat business, have enough profit in them, and or knowing how to protect those profits while you are in the midst of performing the work, the bottom can fall out very easily.

There's a very, very simple reason why they have new gear. It's cheaper to run.
I run older gear myself and when you sit down and HONESTLY figure out what the repairs cost you both in terms of parts and labor on a per hour basis of operation, the lease payment will be less when it's working steady, every day. The other factor is downtime. Anybody working a machine every day can't afford downtime. That's not to say that new machines don't break down... but if it's a rented machine, it's the rental outfit's problem.
BTW, I think you'd find that a lot of that gear is either rented or leased, not financed.... so if hte job goes away, the gear goes back. Then it's Cat's problem. Don't worry about these operators. They've figured out how to keep going. They'll just be another re-incarnation tomorrow or they'll rent the gear...

In terms of working with older gear vs newer gear... the newer gear is generally more efficient, often by a wide margin. Whether or not there's an operator on the seat that can take advantage of that is another story... but it's generally there for someone who can take advantage of it.
The other side of that coin is that there are a lot of people on gear today that have little ability... so machines are equipped with a lot of automated features, grade control, etc that look after the technical end of the machine so that a dummy can get production equivelant to an experienced operator.
In most cases it just plain doesn't pay a larger outfit to run old gear.

Rod

Being "cheap" isn't really the best path to enjoy life. Nothing wrong with frugal, but "cheap" usually means missing some of life's joys. I'd much rather go and dig a hole with a shiney new skid steer rather than some old rattle trap if I can afford it, particularly if I do it many times. In my assessment it is much better to at least try and make a little more money so you can afford to spend a little more freely. If more money can't be made, you can always fall back on being cheap.

Sean said,. "Is this a generational thing to have shiny and new?"

To a point it is. I have noticed the same thing and wondered about it. Seems those born after 1946 or so have much less fear of leverage.

Actually I've been on the lookout lately to find some nice newish tools on the cheap from the "oh hey i saw this on tv so now i can do remodeling" people. maybe just wishful thinking i guess. at least I'll still get calls to fix it when they mess a job up. To be honest though, times are hard even on the conservative tightwads.

I've always said it least a million times, " one should never exagerate".

I agree with the other posters who have said old doesnt necessarily mean useless or bad equipment as most of my equipment is on the older side. However I have seen a trend here in the last ten or so years where banks wont loan you $5,000 to buy an older used skid loader, tractor, or whatever. Instead they will loan you $50,000 for a brand new shiny one, most of the time you were just paying the interest on the loan. I think that has a lot to do with people having to give back things. I got into an argument with a banker over this once and he told me that if I default on an old skid loader he's up a creek trying to get it sold where as if it were new it wouldnt be such a problem. Goes back to people buying things they had no intention of paying for. Another reason you're seeing a good deal of new equipment is that sometimes you're better off financially to lease/rent newer equipment than buy old.

I know in our business we bought some equipment using a Section #179. Do all the depreciation in one year, pay less taxes. Good used equipment isn't cheap, and new stuff usually has pretty good financing terms.