State of the Industry 2011: An Interview with Dennis Slater, President, Assn. of Equipment Manufacturers (AEM)

How are off-road industries faring? Domestic vs. global markets? Please speak on behalf of the “I Make America” project, its successes, future goals and how OEMs benefit from being involved?

Our industry sectors are key components to the health of the U.S economy and the strength of the economic recovery. For off-road equipment manufacturing, certainly the construction sector has been hardest hit with the lingering effects of the recession. The agriculture sector has been stronger, helped by commodity prices and positive net farm income of farmers.

In the past few months, the future has become less clear. There’s been little traction in single-family housing. Transportation infrastructure is a key factor for growth, and there’s been no substantial long-term focus on funding. Credit availability has been easing but is still a concern for some customers.

Exports have been a bright spot, but we need action on pending free-trade agreements to boost international business. Global business demand helped many off-road equipment manufacturers stay open through the recession, and they still depend on export sales, especially to emerging markets, for improved business results.

Agricultural equipment makers are helped by commodity demand and prices, but for all off-road equipment manufacturers, the lack of leadership and meaningful legislation coming out of Washington presents a real danger of a stalling economy.

This is where AEM’s I Make America grassroots campaign comes in. We want Congress to focus on manufacturing policies that create jobs, and infrastructure investment and export agreements are proven ways to create and maintain jobs for U.S. workers, for a sustainable recovery.

The issue affects not just our industry and not just OEMs. It affects every community, business, family and individual. An adequate infrastructure system translates into safer and more efficient travel to advance commerce and quality of life. For every $1 billion spent on infrastructure, 30,000 jobs are created, and not just in construction. It has been estimated that overall for every $1 billion in U.S. exports, 5,000 jobs are created.

The I Make America campaign has made a lot of progress so far with more than 175 member companies officially signing up to get their employees and local communities involved; we’ve already had more than 12,000 supporters sign up on the I Make America website.

Congress has passed an extension of the “highway bill” – this is the eighth one - and it is only for six months. President Obama’s latest jobs initiative includes infrastructure spending, but it’s short-term and piecemeal. In our most recent quarterly poll of members, nearly 60% saw no impact from previous stimulus funding.

Roads, highways, bridges and other infrastructure projects aren’t developed and built a few months at a time. A long-term highway bill provides America’s equipment manufacturers with the certainty they need to hire, contractors with the certainty they need to make capital investments in new equipment and employees, and the U.S economy with a badly needed growth engine.

We have pending free trade agreements with Panama, Colombia and South Korea. Failure to enact these FTAs has put America’s manufacturers and farmers at a competitive disadvantage in the global economy. Existing trade barriers make it difficult to compete in countries that want American-made products. While our leaders stall, countries around the world are negotiating dozens of FTAs to boost trade with other non-U.S. countries.

Do your trade shows reflect the strengthening of the various off-road industries?

Obviously a slower recovery for our industry directly impacts the success of exhibitions in this sector. But overall, AEM-run shows have done well despite the economic challenges in the last few years. We collaborate with industry groups to bring co-locations, and industry input in show planning ensures key needs are being met. At CONEXPO-CON/AGG in March our record international participation reflected the importance of overseas buyers.