The year 2010, going into 2011 was the beginning of a comeback for the RER 100 and the rental industry. As explained in the RER 100 lead story on page 20, while the overall numbers are largely flat, the industry began its rebound in the second half of 2010, leading into a much more upbeat business environment in 2011.
Change was in the air as rental companies were forced to streamline operations. Many looked for software solutions that would help them run more efficiently. Many rental companies shortened the distance between repair shop and jobsite by providing service staff with real-time information on handheld communication devices or Smartphones to facilitate part-ordering, diagnostic capability and information on replacement units. Similar devices are providing outside sales staff with information on equipment availability as well as rates. United Rentals instituted new rate optimization systems that sales personnel can access in real time; other companies are looking at similar approaches. Improved centralized dispatch and delivery systems are being looked at or launched by a variety of companies.
There are a number of new people occupying CEO suites. A couple of years ago when Sunbelt Rentals first began dealing with eroding profit margins from the crippling recession, it brought in a new CEO Joe Phelan. He may have been new to the rental industry but he was knowledgeable when it came to operating a business in a downturn. Once the downturn was over and business began to improve, Sunbelt said goodbye to Phelan and promoted Brendan Horgan, long-time chief operating officer, to the CEO position with his in-depth knowledge of various facets of running a rental business. Horgan is widely viewed as one of the brightest minds in the rental business and the various conversations I've had with him since he's been in senior management at Sunbelt certainly has done nothing to contradict that impression.
Another bright mind in rental management is Gerry Plescia who stepped down from running Hertz Equipment Rental Corp. after about 14 years. Plescia had big shoes to fill when he took over from Dan Kaplan, who had built HERC up to the industry's perennial leader in the pre-consolidation era, and Plescia grew as a well-respected executive who will be missed by the industry (unless of course he returns to it at some point). Hertz replaced him with Lois Boyd, a Hertz executive from outside the equipment side of the business and we'll watch with interest to see how she does as HERC continues to expand through acquisitions and start-ups. Boyd led Hertz' Advantage car rental brand and previously worked with Tenneco.
Another interesting leadership change took place at AmQuip Crane Rental, where Frank Bardonaro had done much to grow AmQuip into one of the industry's leading crane rental companies before stepping down to work with Terex Cranes. AmQuip dipped into the equipment rental arena to find a CEO, hiring Charles Snyder who through the years at American Equipment Co. (now AMECO), Nations-Rent and Sunbelt Rentals was one of the industry's most visionary and innovative leaders. Snyder had some knowledge of crane rentals having managed American's large crane rental fleet for a while but is still relatively new to the operations of a crane rental company. Those who know Snyder, nonetheless, have few doubts that he'll bring some great ideas and practices to AmQuip.
Some interesting alliances developed over the past year that bear watching. United Rentals' alliance with AMECO to grow and expand industrial business opportunities could be a creative, trend-setting way of bringing out the best in both companies to create something new and ground-breaking. The alliance between Trico Lift and Modern Group — with Trico Lift acquiring Modern's aerial assets and in turn helping to market Modern Group's extensive material handling rental and sales business — is another interesting venture to watch, as the agreement could help both companies do what they do best and enhance their abilities to maximize their core business competencies.
The acquisition of Coast Crane by Essex Crane Rental, and Oregon's Halton by San Francisco Bay Area-based Peterson Tractor, one large Caterpillar dealer buying another, could turn out to be interesting and beneficial acquisitions.
These are just a few of the ongoing story lines to watch as the rental industry enters a new phase. Just as occurred at the end of the 2002-2004 recession, a lot of waste has been cleared away, redundancies eliminated, and excess fleet sent out of the country. There's been no shortage of pain. Companies, including a few RER 100 firms, have gone into bankruptcy or closed their doors. People have lost their jobs, just as the construction industry has suffered massive unemployment. Change is not easy but hopefully this year we'll see some good rise out of the ashes.