BOMAG Americas, Inc.

Critical Issues

The two most critical issues facing the industry now are the housing market and the credit crunch.  As housing remains slow, and as credit is difficult to obtain, it impacts dealers and contractors.  The construction industry will continue to suffer until credit problems are resolved and the housing market begins to recover.

The solution is simple, but difficult.  Time and restored confidence will be the key factors.  The economy will rebound in time, and that will help consumers and contractors gain confidence that the market is headed in a consistently positive direction.  In the interim, businesses in the construction industry will remain in a survival mode.

Current Trends

In our industry, and particularly in the compaction category, it is not really about new technology, but existing technology being used in new and more exciting ways.  The best example of this is GPS technology, which has been around for some time.  This technology is being applied in new ways that will help contractors keep costs down and productivity up.  Whether preparing a jobsite or building a road, GPS technology is helping operators work faster and smarter, and giving contractors an accurate view of the job's progress.

The more technology is implemented, the more it leads to innovative ideas that will only serve to help the contractor more.

Looking Forward

We are firm believers in spending money on research and development, both in good times and bad.  We consider ourselves to be a leader in compaction technology, and the only way to maintain that is to continue our efforts to bring more innovation to the industry and offer leading-edge products.

We are also doing everything we can to control the cost of building our machines.  Being a global manufacturer, we have the ability to match our production to the region where the demand resides.

There is no doubt that 2009 will be tough.  Commodity prices are volatile, currencies are fluctuating and the market is strained.  But continuing to invest in our innovation leadership will allow us to be competitive when the financial picture improves.

Government and Compliance

Federal and state emissions compliance requirements have necessitated changes in engines and related systems.  This has increased the cost of building machines.  We and our customers are also affected by the road transportation bill (the current law expires in September, 2009) and how it is funded.

Successful Business Owners

Like us, successful customers are learning about new technology and implementing new processes in ways that reduce their costs and allow them to become more efficient.  This includes business management technology within their own operations as well as the innovations that we as manufacturers are providing.

The most successful contractors are using technology to stay ahead of the curve in terms of costs as well as government standards and regulation.

Tags: 2009 January Issue , Executive Insights , State of the industry