LOUISVILLE, Ky.
2008, it was the GIE+EXPO of the three “Es”: the election, economy and ethanol—and not necessarily in that order depending on who you were talking to. More than 20,000 people (including exhibitors) attended the 2008 GIE+EXPO at the Kentucky Exposition Center October 23-25, including approximately 7,000 dealer/retailers and 7,000 lawn and landscape pros.
The 625 manufacturers and suppliers at North America’s largest lawn and garden power equipment event included 170 first-time exhibitors and more than 30,000 sq. ft. of new exhibit space. The GIE+EXPO is not only the largest industry event, it’s also the 14th-largest trade show in the U.S.
The economy maintained a firm hold on visitors and exhibitors’ outlooks during the show, as the stock market gyrated up and down during GIE+EXPO’s first two days.
The biggest impact that dealers are expected to see is the tightening of credit for floor-planning and inventory, costs that will rise as the banking system reels from major losses due to a retrenching housing market and speculative abuse.
Ariens Co. President Dan Ariens particularly emphasized what dealers are facing: “2009 is going to be a very, very challenging year,” Ariens said, noting that dealers have already been feeling the effects of a slowing housing market for the better part of two years.
“One of the dealers’ biggest challenges is to be careful with floor plans, buy smart and don’t over-buy,” Ariens noted. “It’s going to be tougher to get extended lines of credit, especially next year.”
Briggs & Stratton CEO John Shiely agreed, adding: “Credit ratings are going to be much more important,” though he noted, “Dealers are notoriously cautious.”
Shiely added the recent drop in fuel prices and bouts of severe weather, whether it be rain events in the South and Midwest or a high-drift snow year across the U.S. “snow belt,” are adding to a positive dealer and OEM outlook. “Snow and lots of rain are what gets dealers excited,” Shiely said. “I’d almost rather have a ton of rain and a lousy economy than a good economy and no rain.”
Tough economic times are when it’s super-important to keep an eye on reducing costs and increasing operating efficiencies while bolstering your dealership’s market strengths and service capabilities. It’s also important to be open to new markets and niche products that enable business growth. “Simple change is grounded in the past,” said Husqvarna’s Dave Zerfoss. “Instead, look to transform yourself to meet the future.”
The election is a big concern for many industry officials and leaders, with a change in administrations—no matter who wins—that includes changes at regulatory agencies such as the EPA.
According to Kris Kiser, Outdoor Power Equipment Institute (OPEI) vice president of public affairs, OPEI staff and member companies have identified three areas of “concern, opportunity and risk: climate change, water issues and ethanol and renewable fuel in the marketplace.”
There’s a big opportunity if carbon offset and cap-and-trade programs are developed by a new administration that would place increased value on the ability of turfgrass to absorb and sequester carbon.
A big issue is educating government agencies such as the EPA, which sees lawn and garden activities and equipment as sources of pollutants, while the Dept. of Agriculture has listed managed turfgrass as a specialty urban crop that helps reduce air pollution by absorbing carbon dioxide.
Water availability issues are also beginning to crop up, with EPA and some state agencies looking to limit grassy areas in new developments. “We have a huge opportunity to be a value leader in the cap-and-trade debate, and we’re trying to find all the environmental attributes of our industry and educate people,” Kiser said. “It’s a huge challenge, but we’re going to have to tackle it.”
On the fuel front, OPEI and industry are highly committed to working with government agencies to ensure an orderly transition to more renewable fuel blends, such as the E10 (10% ethanol) gasoline now common across the U.S.
There’s a big push by ethanol producers and allied groups to increase ethanol usage and sell more into the marketplace, Kiser said, but any new ethanol blend increases need to be phased in to allow industry time to design for higher ethanol content and also avoid massive equipment failure and consumer backlash against renewable fuels.
Sno-Thro Switch
During GIE+EXPO, Ariens Co.’s Dan Ariens noted that last year was an excellent year for the company’s snowthrower sales, and this year is already shaping up well. Yet long-time Ariens Sno-Thro engine supplier Tecumseh has announced it is exiting the snowthrower engine business at the end of this year, and Ariens and Tecumseh are currently working together to ensure dealers and consumers have access to engine parts for the next three years that are covered under warranty.
Ariens is currently working through production of the last batches of Sno-Thros powered by Tecumseh Sno-King engines and is switching to a Briggs & Stratton powerplant early next year for this year’s models. Ariens will make a long-term engine supplier decision in 2009.
The company is still negotiating with Tecumseh on warranty considerations and parts availability, Ariens says. Ariens company Stens is also handling Tecumseh engine aftermarket parts.
Briggs Starts Celebration
 Briggs & Stratton Corp. announced a year-long celebration honoring its first 100 years in business, with plans to celebrate its legacy of innovation and success by giving back to the community through numerous festivities in Milwaukee, home of its corporate headquarters, and at many Briggs locations worldwide.
“This milestone impels us to take pride in what we’ve accomplished so far as well as move forward with a renewed spirit of innovation and a stronger understanding of what Briggs & Stratton stands for,” said John Shiely, chairman, president and CEO, Briggs & Stratton. “For 100 years our customers have come to us seeking the best product design and quality and for 100 years we have consistently delivered.”
Beginning in 1908, founders Stephen Briggs and Harold Stratton took the company down a diverse path of producing engine-powered bicycles, electric refrigerators, an electric hybrid automobile prototype, coin-operated paper towel dispensing machines and more. Today, Briggs & Stratton employs more than 8,000 people and operates 10 manufacturing facilities globally. In addition to manufacturing air-cooled gasoline engines for the power equipment industry, Briggs & Stratton also produces generators, pressure washers, pumps, walk-behind and riding lawn mowers and more.
NAEDA Debuts Power Pro
During GIE+EXPO, the North American Equipment Dealers Association (NAEDA) unveiled its new Power Pro Program. Developed by the association’s OPE Dealer Council, the program offers accreditation to dealers who operate their businesses under a universal set of standards that measure sales and service performance.
“To be clear, Power Pro is not the brand of equipment—Power Pro is the brand of an exceptional dealer,” said Joe Dykes, associate director of OPE Programs for NAEDA.
Power Pro has been in development for several years, noted George Fackler, chairman of the NAEDA OPE Dealer Council. He said NAEDA and its affiliated associations held focus groups with dealers throughout North America to help design a program for dealers who operate their businesses at the highest professional level. “The accreditation program calls for dealers to candidly assess their strengths and opportunities to improve the operation of their dealerships,” added Fackler, owner of Fackler Country Gardens, a multi-store operation, in Granville, Ohio.
“Equipment is an investment,” said Dykes. “We believe consumers will get a greater return on their investments when they conduct business with dealers who support the brands they carry with product knowledge, parts and service—and commit resources to upgrade facilities and hire and train staff and technicians. Power Pro will be used to identify and promote these types of dealers.”
To apply for Power Pro accreditation, dealers must: be an independent outdoor power equipment retailer; have parts and service departments; maintain a current retail certificate and/or vendor’s license; and have business insurance or financial responsibility for the liabilities of the dealership.
For more information, visit Power Pro on the main menu at www.naeda.com.
Dealers Choice Award Winners
Dealers attending GIE+EXPO voted on their favorite new products in five categories in the third annual Power Equipment Trade (PET) GIE+EXPO Dealers Choice Awards. Voting commenced on the show’s first two days, with the winners announced on Saturday, October 25.
As part of the awards, PET held drawings for two PulseTech battery chargers and a $100 cash award. Winners of the battery chargers are Steve Wilson of Madison Tool Rental in London, Oh., and Dennis Tedder of Tedder Outdoor Power in Camden, Ark. Winner of the $100 cash award is J.L. Rainwater of JR’s Small Engine in Collinsville, Okla.
The Dealers Choice Awards honor innovation and new technology at GIE+EXPO in five product categories: wheeled, handheld, business service, powersports/recreation and accessory/attachment. The 2008 PET GIE+EXPO Dealers Choice Awards winners are:
* Handheld—Echo BRD-280 Bed Re-Definer
* Wheeled—Briggs & Stratton Allis Chalmers Lawn Tractor
* Business Services—Stihl iCademy On-Line Training Program
* Powersports/Recreation—Husqvarna HUV 4421DXL
4-Seat UTV
* Accessory/Attachment—MoJack Mower Lift System
Look for complete coverage of the 2008 PET GIE+EXPO Dealers Choice Awards winners and finalists in the new poweretblog.com, and also on the PET web site at poweret.com.
Dealer Experience Report
One of the best-attended sessions at GIE+EXPO’s The Dealer Experience featured Stihl Inc. President Fred Whyte and Ariens Co. President Dan Ariens, who took questions from the 100+ dealers in the audience and gauged the outlook for independent dealers in the lawn and garden industry.
Whyte emphasized Stihl’s business plan of selling only through servicing dealers: “It’s a market philosophy that’s served us well,” he said, adding that Stihl’s privately-held ownership means the company can take a longer-term approach that publicly-held companies can’t.
Whyte says he believes dealers have an inherent advantage in the market through their knowledge and expertise. “Dealers have a tremendous advantage in being a resource for your customers, and you have the opportunity to build relationships with your customers that mass merchants cannot do.”
Ariens added, “Now is the time to truly differentiate your businesses through service and expertise. People who come through your door have sought you out: They’re looking for help and they’re there for a reason.”
Responding to a question about dealing with the current downturn, Whyte noted the importance of staying in contact with current customers. “Keep after your customers with direct mail, and keep incentives up to take advantage of the relationships you have,” he said, adding that service and spare parts sales become even more important during a downturn.
Ariens cautioned: “Be as smart a buyer as you can with floor plans. Be highly cautious of overloading floor plans or ordering too much.”
Whyte added that dealers need to choose their business partners carefully. “You need to be doing business with people who will work with dealers through difficult times,” he said. “You have to buy right, and be cognizant of costs. Your best friend is your CPA, and not just at tax time.”
Dealers also need to see their true competition as the mass merchant more than the dealer down the road, Whyte said. “Get to know the other dealers in town. You have more in common than you might think, and there are opportunities there.”
An interesting exchange about new technology and trends for reaching customers also followed, with Whyte mentioning that Stihl sets aside a percentage of its marketing budget each year to basically experiment with new marketing technology. One example is the new stihlusa.mobi site for text messaging.
Ariens cautioned dealers to “never take your eye off new technology.” He noted the progress many dealers have made in implementing web sites, and advised dealers to seek advice on new marketing technology from local service providers and web designers.
“Those are important people to know, and you can learn a lot from them,” Ariens said.
On environmental issues, and the increased use of ethanol fuel blends, both Whyte and Ariens supported the OPEI position that there’s nothing wrong with ethanol, but lots more analysis needs to be done before blends higher than E10 are introduced into the marketplace.
Commenting that there’s been a lot of hype around the ethanol issue, and that “E10 seems to do well in our products,” Whyte said, “We need to do a lot more testing.”
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