How should rental companies manage over the next year?

In my view, rental companies need to broaden their customer base. A lot of customers still want to buy or rent to own equipment. Rental companies have to be willing to offer the customer equipment in the form that the customer wants it and not just as they want to market it (daily, weekly, or monthly rentals are not enough). This means that rental companies need to sell more equipment and make service arrangements with local dealers. It means they need to offer financing.

It means they have to generate more positive cash flow after capital expenditures. In short, rental can be a focus but it is not enough. They have to be problems solvers.

Obviously most manufacturers will decrease production in 2009. What about R&D? Is there likely to be greater emphasis on research and development to stay ahead of the competition in equipment innovation and be prepared with new products when the economy turns around?

R&D will continue at the same relative pace. But remember this is not an industry that largely rewards true innovation, but rather the industry rewards improvements. The largest challenge facing this industry will be the move toward more fuel efficient and environmentally friendly engines. The Tier IV engine changeover will be a big move.

A lot of people are hoping the new Obama administration will try to put together an infrastructure spending package to stimulate construction projects, repair and expand highways, build and repair bridges, etc. How likely do you think such a package is and what would it take to make an economic difference?

Yes there will be a new package and yes it will make a difference. I have been arguing for this for a long time, having held a conference at Iona College last February with many political and industry players. My fear is that we only focus on repair and maintenance and not system-wide improvements. We need to build the best infrastructure in the world, not just repair our old one.

Any additional points you'd like to make?

Our economic prosperity depends upon our infrastructure. We need vision and will too tackle the tough challenges of how to build an America for 2050. My generation has been riding on the vision and coat tails of prior generations relative to infrastructure. We need to step it up and build an infrastructure that will be the envy of the world again, which will be the best thing for the economy as well.