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Plant firms must look at service, and not at price

LETTERS

Sir, Reading last week's Top 100 supplement (Construction News, September 2), there is much to be done about plant hire's fortunes in the face of strong construction activity.

The trouble with plant hire people is that we are machine men.

Just look at trade shows.They are like model railway exhibitions for grown men.

I spent most of my time working within the old BET Group with its subsidiary GWS.

Rentokil subsequently finished up with it after a hostile takeover. BET liked it because it generated lots of cash and Rentokil hated it because it meant the firm had to dip into its shallow purse and the market is also very cyclical.

I suppose that these two scenarios represent our problems because there are many companies that trade on cash flow and profit is not the issue.

Too many manufacturers have been keen to fund expansion by giving machines away.

This has been particularly true in powered access, where US manufacturers have dumped machines to take up production line slack.

Our love of machines has left us blind to the obvious.We must create a difference between companies other than price.

Companies employ salesmen mainly because they understand machines but they cannot sell without chopping the price.

A senior buyer for Shepherd Construction at one of its seminars asked a group of plant companies what irritated them most about customers.

The answer was that all they wanted was the cheapest price.

In reply he said that the trouble with plant companies was that hire rates were often the only thing on offer.Not many took the trouble to sell them value.

It is easy for anybody to sit behind a computer and come up with smart ideas. It isn't easy to justify major investment when utilisation drops.

My current employer is embarking on a major project to sell on a price list of hire rates and transport charges by offering a whole range of 'benefits' that really do deliver value to the client. Believe me, the acceptance level has been very surprising.

So what is the answer? One common need is to achieve adequate payback times so that we can invest for the future.

What we need is lots of imagination and courage to create something worthwhile and the guts to see it through.

Perhaps there is an industry-wide debate to be had.

I'm not sure that trade associations work because they tend to be self-preserving and inward-looking.

Denis James By email