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AED Washington Insights Newsletter

AED Washington Insights

September 2009

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Prepared by Christian A. Klein, AED Vice President of Government Affairs
and the AED Washington team

In this Issue:


AED, AEM launch "Start Us Up USA!" campaign to highlight industry economic conditions, urge action on recovery legislation

AED and the Association of Equipment Manufacturers (AEM) have launched Start Us Up USA!, a grassroots campaign to call on Congress to quickly reauthorize federal surface transportation programs and enact other legislation to help the equipment industry recover from the unprecedented economic downturn.

The campaign kicked off on Sept. 29 with an "idle equipment caravan" through the streets of Las Vegas followed by a press event. Nevada is one of the states that have been hardest hit by the collapse in construction markets.

"The construction equipment industry is in a deep depression and we have lost 37 percent of our workforce nationwide the past few years," Toby Mack, president and CEO of Associated Equipment Distributors, said at this morning's event. Dennis Slater, President of the Association of Equipment Manufacturers added: "Time is running out for the men and women of the construction and equipment industries without long-term federal transportation investment."

At the rally, AED and AEM released the results of the new study by IHS Global Insight showing that while the recession is abating for some sectors of the U.S. economy, the construction equipment industry remains mired in a deep depression.

"The current recession has placed a severe drag on the construction equipment industry, which is consequently holding back the broader economy from recovery," said Scott Hazelton, director of construction services for IHS Global Insight and principal author of the study.

Other key findings include:
  • The construction equipment industry - which includes manufacturing, distribution and maintenance companies - has shed 37 percent of its workforce since the equipment market peaked in 2006. By comparison, auto manufacturing and dealership jobs are down by 16 percent, while job losses in the finance and insurance industry amount to 6 percent of their workforce.

  • Spending on construction equipment has fallen by more than 50 percent compared to its peak in 2006.

  • The economic output of this industry has contracted by nearly 40 percent and resulted, directly and indirectly, in the loss of approximately 550,000 jobs. That's 8 percent of all jobs lost since the start of the recession.

  • The equipment industry has a significant economic footprint and the health of the industry has significant implications for the broader economy. In 2008, the construction equipment industry contributed $243.3 billion in U.S. economic output and supported nearly 1.25 million jobs. The jobs supported by this industry were roughly equal to the number of men and women employed in manufacturing computer and electronic equipment.
MaryKaye Cashman, chairman and CEO of Cashman Equipment Company based in Henderson, Nev., who spoke at the rally, attested to the challenges the industry is facing. "Our Caterpillar dealership has experienced a decline in sales by 50 percent, and has 25 percent fewer employees today than at its peak a few years ago," Cashman said.

In addition to Cashman, Arnold Machinery Company, APCO Equipment, Blain Equipment and Goodfellow Crushers also contributed equipment for the idle equipment caravan. AED and AEM hope to replicate the Las Vegas event in other cities and culminate the campaign with an equipment industry rally on Capitol Hill on Oct. 28.

In conjunction with the campaign kickoff, AED and AEM also unveiled a new Web site - www.StartUsUpUSA.com - where visitors can find the latest information, share stories on how the construction equipment depression has affected them, post photos and videos, learn how they can support the effort, and send messages to Congress.

The Las Vegas rally was well covered by local media and over the last 48 hours, Mack, Slater, and Cashman have conducted numerous press interviews to highlight the IHS Global Insight data and need for congressional action on the highway bill. The Start Us Up USA! rally was featured in a Las Vegas Review Journal story on the morning of the event and several other outlets are in the process of preparing stories.

The public relations campaign and media outreach are designed to support AED and AEM's stepped up "inside the Beltway" lobbying efforts. Highway reauthorization is the top priority. Current federal transportation funding expires today (Sept. 30) and Congress needs to quickly pass a new multi-year reauthorization bill or projects around the country are at risk. Many experts consider that legislation to be the best opportunity for Congress to help stimulate the slumping construction sector this year and address our nation's crumbling infrastructure. AED and AEM are also urging Congress to pass tax legislation to extend and expand equipment purchasing incentives, extend the home purchase tax credit, extend net operating loss carry back benefits, and make sure credit is available for distributors, manufacturers, contractors, and developers.

More media coverage: AED members interested in getting involved in the Start Us Up USA! campaign, whether by participating in a local idle equipment rally or coming to Washington for Capitol Hill meetings should contact AED Vice President of Government Affairs Christian Klein at caklein@aednet.org, 703-739-9513.



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Drama ensues as the highway program nears expiration

Following the announcement by Rep. James Oberstar (D-MN), chairman of the House Transportation and Infrastructure (T&I) Committee, that he would support a three-month extension of the current federal surface transportation program, the House of Representatives followed Oberstar's lead by voting to extend federal surface transportation programs for three months beyond the scheduled Sept. 30 expiration of SAFETEA-LU.

The bill, which passed the House by a voted of 335-85 on Sept. 23, would extend the current surface transportation authorization through Dec. 31. Several pro-infrastructure Republicans joined House Democrats and voted for the extension, breaking with their party's leaders, who had announced opposition to the extension because of allegations that the purpose of the three-month extension was to buy time to build support for a gas tax increase.

Legislation to extend the highway program for 18 months passed the Senate Environment & Public Works (EPW) Committee this summer, and all indications were that the Senate would stick with the Obama administration and insist on an 18-month extension. However, as Insights went to press, word on the Hill was that Sens. Barbara Boxer (D-CA), chairman of the EPW Committee, and James Inhofe (R-OK), ranking member of the EPW Committee, were exploring the possibility of supporting a three-month extension. Stay tuned as details of a possible compromise unfold.

If the Senate ends up passing an extension of more than three months, the chambers will meet to hash out the exact duration of the extension. However, with the current program expiring on Sept. 30, if the House and Senate do not come to an agreement before the deadline, money for highway construction should continue to flow thanks to a 30-day extension of the current program contained in a continuing appropriations resolution.

The extension debate is necessitated by the fact that despite the looming extension of SAFETEA-LU, neither the House nor the Senate has approved legislation to reauthorize highway and transit programs.

AED is urging Congress to swiftly enact a multi-year highway bill that dramatically increases highway investment. We have been educating lawmakers that Congress' failure to act and the uncertainty surrounding reauthorization is causing contractors to forego equipment purchases and is adding to historic volatility in equipment markets (see story, this issue, about the AED-AEM Start Us Up USA! campaign.) We believe the country cannot afford to wait 18 months for long-term investment that will provide comprehensive solutions to our transportation challenges, create jobs, and get heavy equipment moving again.

Visit StartUsUpUSA.com today to send a letter to your senator and/or member of Congress to let them know that a long-term extension of the current highway program is unacceptable and that the equipment industry needs the certainty of a multi-year, highway reauthorization bill sooner rather than later.



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Appropriations bills move forward, but not in time for new fiscal year

The House and Senate have moved forward with consideration of key appropriations legislation for FY 2010, with bills related to the funding of transportation and water infrastructure-related federal departments and agencies close to becoming law, but not quite ready before the end of the fiscal year on Sept. 30.

On Sept.17, the Senate approved FY 2010 Transportation- Housing & Urban Development (HUD), appropriations legislation (HR 3288) by a 73-25 vote. The House passed a slightly different version of HR 3288 on July 23. Both the House and Senate versions contained about $41.107 billion for the highway program, a 1 percent increase over the current fiscal year.

Differences between the House and Senate bills relating to the funding of a National Infrastructure Bank and high-speed rail could delay enactment of HR 3288. The next step will be for the House to agree to a conference with the Senate and appoint conferees to work out the discrepancies between the two chambers. However, with the government's fiscal year ending on Sept. 30, it is clear that Congress will not complete its work on the FY 2010 DOT-HUD appropriations bill on time, and will need the extra time provided in the continuing resolution (CR) passed by Congress before the end of September.

Appropriations bills providing funding for Clean Water and Drinking Water State Revolving Funds (SRF) are in a similar situation. On June 26, the House passed its version of the Department of the Interior, Environment, and Related Agencies Appropriations Act for FY 2010 (HR 2996), by a vote of 254-173. HR 2996 includes $2.3 billion for the Clean Water SRF, $1.4 billion for the Drinking Water SRF, and $160 million for direct grants to communities for water infrastructure. The House Appropriations Committee estimates these funds will create as many as 40,000 new construction jobs.

On Sept. 24, the Senate passed its version of HR 2996. The Senate legislation includes $2.1 billion for sewer system improvements through the Clean Water SRF and $1.39 billion for drinking water system improvements through the Drinking Water SRF. The legislation must also be reconciled in conference.

Finally, other water infrastructure funding bills have also been moving forward in both the House and Senate, but not in time to meet the Sept. 30 deadline. On July 17, the House passed the FY 2010 Energy and Water Appropriations bill (HR 3183), 320-97. HR 3183 provides $33.3 billion for the Army Corps of Engineers, the Department of the Interior (DOI), and the Department of Energy. The Army Corps of Engineers will receive $5.5 billion next year to address water resource investment needs, including $2.5 billion to address the more-than-$1 billion backlog of operations and maintenance needs of navigation infrastructure critical to the U.S. economy. In addition, $2.1 billion of funding was provided for construction of new water infrastructure projects, including ongoing flood protection efforts.

HR 3183 also provides $1.1 billion for DOI to support and improve the nation's water infrastructure, including $1 billion for the Bureau of Reclamation for dams, canals, water treatment and conservation, and rural water projects.

The Senate's FY 2010 Energy and Water Appropriations legislation (S. 1436) is very similar to the House version. S. 1436, a $34.271 billion funding bill, contains $5.4 billion for the Army Corps of Engineers, $2.45 billion for operations and maintenance needs, and $1.924 billion for new water infrastructure construction. The Bureau of Reclamation would receive $1.131 billion. The Senate legislation has been reported by the Appropriations Committee and is awaiting floor action.



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AED Washington office continues grassroots outreach

AED's Washington team was on the road again this month speaking to local distributor group meetings in Pennsylvania and Iowa.

On Sept. 15, AED Vice President of Government Affairs and Washington Counsel Christian Klein and Director of Government Affairs and Associate Counsel Daniel Fisher traveled to a meeting of Delaware Valley AED in Eagle, Pa., outside Philadelphia. The meeting was hosted by Eagle Power and Equipment. After dinner, Klein briefed the group on AED's construction equipment industry recovery initiative and described ways that the local group could support AED's efforts in Washington. As part of the meeting, group members signed letters to Senators Arlen Specter (D-PA) and Robert Casey (D-PA) urging them to work for swift enactment of a multi-year highway bill, water infrastructure legislation, and tax policies to encourage equipment purchasing.

On Sept. 17, Klein and AED Executive Vice President and COO Robert Henderson were in Des Moines for the Iowa-Nebraska Equipment Distributors annual meeting. Following Henderson's review of current AED activities and Klein's government affairs briefing, group members passed a resolution authorizing a letter to members of the Iowa and Nebraska congressional delegations in support of AED's industry recovery initiative.

"Getting out and connecting with our members at the local group level is one of the most important things I do in this job," Klein said. "Time and time again, we've seen activist local groups turn the tide on the issues that AED is working on in Washington from the gray market to rental preferences, from LIFO repeal to the depreciation bonus. It's critical that our members understand how they fit in to what we're doing on Capitol Hill and what they need to do to help us be successful on their behalf."

Klein will be in Columbus, Ohio, for a meeting of the Ohio Equipment Distributors Association on Oct. 6 and he will travel to Perry, Okla., to speak at a Ditch Witch dealers meeting on Oct. 14. In addition to visits described above, AED Washington team members have also made presentations this year at local group meetings in Illinois, Kansas City, Houston, Dallas, Oklahoma City, New Jersey, and Kentucky. The costs associated with AED Washington staff participation in these meetings are borne by AED's Washington Education Fund (WEF), which is supported entirely by contributions from AED member companies.

If your local group or manufacturer dealer group is interested in having a speaker from the AED Washington office on a future meeting agenda, please send an email to aeddc@aednet.org.



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Sign here (and there): DOL proposal requires add-on to federal contracts

Wall space at your facility may be at a premium after the Department of Labor (DOL) moved forward in August with its plan to execute one of President Obama's first acts in the Oval Office. On Aug. 3, DOL published a notice of proposed rulemaking (NPRM) implementing Executive Order 13496, "Notification of Employee Rights Under Federal Labor Law," a decree signed by the president on Jan. 30.

The proposed rule requires that federal government contracts over $100,000 include a provision that the contract recipient, as well as all subcontractors, conspicuously post notices (i.e., signage) informing employees of rights under federal labor law. The notices must be posted in "conspicuous places in and about its plants and offices where employees covered by the National Labor Relations Act (NLRA) engage in activities relating to the performance of the contract," including on the Internet. Failure to comply with the rule could result in postponement or termination of the contract, with the possibility that the contractor may be declared ineligible for future federal projects.

The approximately 600-word notice was released by DOL in the recent NPRM and the proposed language is clearly favorable to the unions and lacking in objectivity. For example, the opening paragraph of the notice to be posted reads:

It is the policy of the United States to encourage collective bargaining and protect the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid and protection.

The comment period for the NPRM closed Sept. 2, and a final rule should be issued in the coming months. The final rule will likely pit competing interests of business and organized labor. AED will continue to monitor the rule's progression and keep you informed of new developments.

The NPRM is available HERE.

Executive Order is available HERE.



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In the midst of economic crises, AED members rally to support the PAC

The year 2009 has been a tough one for AED members. With construction industry unemployment above 16 percent and construction spending down 11.4 percent from last year, one would expect AED PAC to take a large hit. However, as AED PAC fundraising nears the $35,000 mark for the year, more and more AED members are getting engaged in the political process.

While still a year away, many House and Senate races are already heating up. Because of the success of the 2009 AED PAC fundraising season and the political activism of our membership, AED will be in the forefront of the upcoming political debates.

Fundraising for 2009 is wrapping up, but there's still time to get more information about AED PAC. As a reminder, only owners and senior executives of AED distributor member companies that have given "solicitation consent" in accordance with federal law are eligible to support the PAC. Please fill out a consent form and mail or fax it to AED's Washington Office. To download a form and view a list of companies whose owners and employees are eligible to participate in AED PAC, visit:
http://www.aednet.org/government/pdf/aed-pac-solicit-form.pdf

2009 AED PAC Contributors
(As of Sept. 25, 2009)


President's Circle ($5,000)
James E. Stephenson, Yancey Bros. Co.

Chairman's Caucus ($2,500)
Dale A. Leppo, Leppo Rents/Bobcat of Akron
Wes Stowers, Stowers Machinery Corporation

Capitol Club ($1,000)
Diane M. Benck, West Side Tractor Sales Co.
Walter Berry, Berry Companies, Inc.
Dan Butler, Butler Machinery Co.
Paul Campbell, Wheeler Machinery Co.
Donald Chambers, Unified Equipment Resources
C.E. Thomas Cleveland, H. O. Penn Machinery Company Inc.
R. Christopher Gaylor, Power Equipment Company
Lawrence F. Glynn, CMW Equipment
Dennis J. Heller, Stephenson Equipment, Inc.
Roy H. Hunt, Hunt Tractor, Inc.
A. Roy Kern, Jr., Equipment Corporation of America
H. E. Kirby, Jr., Kirby-Smith Machinery, Inc.
Chris MacAllister, MacAllister Machinery Co., Inc.
P.E. MacAllister, MacAllister Machinery Co., Inc.
Joseph A. Paradis, III, Brandeis Machinery & Supply Co.
Rick Piper, Unified Equipment Resources
William Reardon, Unified Equipment Resources
Alvin Richer, Arnold Machinery Co.
John Riggs, IV, J A Riggs Tractor Co.
Kenneth E. Taylor, Ohio CAT
R. Dale Vaughn, OCT Equipment, Inc.
Michael E. Walsh, Walsh Equipment
Ed I. Weisiger, Jr., Carolina CAT

Washington Team ($500)
Michael Brennan, Bramco

Other AED PAC Supporters
Fred Berry, The Berry Companies, Inc.
John & Jessica Eyde, Pioneer Equipment & Supply Co.
Rick Dahl, Metrolift, Inc.




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