nov 2015

IN THIS ISSUE:3 Observations from the Field4, 6 Association News8 Equipment Industry News9 Trucking Compliance Seminar10 Customers Don't Always Approach You For Business12 EMV / Chip Card Technology13 NY Farm Show14-15 Affordable Health Care Act Information

16 Business Succession in a Nutshell18 Tax Tips18 2016 Annual / Regional Meeting Dates20 Questions CEOs Ask in Job Interviews22 Knowing Your Rights Under Dealer Protection Laws24 No, You Didn't Lose Your Largest Account Because of Price27-28 Equipment Industry News

ADVERTISER’S:2 Haylor, Freyer & Coon 7 Kioti11 Electronic Merchant Systems17 BallastStar21 Fastline21 Western Equipment Dealers Association29 Federated Insurance

DEALERNortheast

The Newsletter of NoRThEAsT EquipmENT DEALERs AssociATioN, iNc.NOVEMBER 2015 c Vol. 17, No. 200www.ne-equip.com

NEDA Salutes our Supporting Advertisers. It is our pleasure to list the names of those advertisers who support NE Dealer each month. We trust their advertisement will be remembered when goods and services are required by you, our dealer members. It is good to do business with companies who are interested in doing business with you and your industry association.

Brian Carpenter (left) receiving his service plaque from Blaine Bingham at the September Board Meeting at NAEDA headquarters in St. Louis. Brian is co-owner of Champlain Valley Equipment of Middlebury, VT, a five store dealership.

Brian Carpenter (left) receiving his service plaque from Blaine Bingham at the September Board Meeting at NAEDA headquarters in St. Louis. Brian is co-owner of Champlain Valley Equipment of

BrianCarpenterReceives

NaedaServiceaward

To see if you qualify, call Patrick Burns at Haylor, Freyer & Coon 800-289-1501, Ext. 2148or fax a current declaration page to 315-684-9801 or call

Ralph Gaiss (Executive Director of NEDA) at 800-932-0607 for more information.You may also visit us at www.haylor.com

Northeast Dealer | NOVEMBER 2015 … 3

This publication is designed to provide accurate and authoritative information in regard to the subject matter co v ered. It is furnished with the understanding that the Northeast Equipment Dealers Association, Inc., the publisher, is not engaged in rendering legal, accounting or other professional service. Changes in the law duly render the information in this pub-lication invalid. Legal or other expert advice should be obtained from a competent professional. Some of the editorial material is copyrighted and may be reproduced only when permission is obtained from the publisher and the association.

Board of DirectorsOfficers

JOhn e. KOMArisKY, President / Past Pres. 2012Main & Pinckney Equip Inc. / Auburn, NY315-253-6269 - FAX 315-253-5110New Holland, Simplicity, Brillion, Bush Hog [email protected]

JOsh AheArn, First Vice President / Treasurer /NAEDA OPE Dealer CouncilAhearn Equipment, Inc. / Spencer, MA508-885-7085 • Fax: 508-885-7261Kubota, Cub Cadet, Stihl, NAPA [email protected]

rOBerT sPOhn, Second Vice President / Past President - 2005Sharon Springs Garage / Sharon Springs, NY518-284-2346 • Fax: 518-284-2774AGCO, White, Hesston, Gehl, Kubota, Allis, [email protected]

eD hines, Immediate Past President 2014, 2001Hines Equipment / Cresson, PA814-886-4183 • Fax: 814-886-8872Case IH, Gehl, New Idea, Cub [email protected]

BriAn cArPenTer, EDA DirectorChamplain Valley Equipment / Middlebury, VT802-388-4967 • Fax: 802-388-9656New Holland, Case IH, Kubota, [email protected]

rALPh GAiss, CEO and Executive Vice Pres.800-932-0607, Ext. [email protected]

DirecTOrs

scOTT BAir, Director ElectMountain View Equipment, Inc. / Plattsburgh, NY518-561-3682 • Fax: 518-561-3724John Deere AG/CCE, Claas, Kuhn Knight, Kverneland, Stihl, Husqvarna, Frontier, Servis, [email protected]

BrAD hersheYHoober, Inc. / McAlisterville, PA717-463-2191Case IH, JCB, [email protected]

nATe shATTUcK, Past President - 2010Devon Lane Farm Supply, Inc. / Belchertown, MA413-323-6336 • Fax: 413-323-5080Yanmar, Landini, Monosem, Ferris, Simplicity, Stihl, [email protected]

scOT L. sTAnTOn, Past President - 2003Stanton Equipment Inc. / East Windsor, CT860-623-8296 • Fax: 860-627-9832John Deere Ag., Knight, Athens, [email protected]

WenDeLL WALLDrOff, Past President - 2002Walldroff Farm Equip., Inc. / Watertown, NY315-788-1115 • Fax: 315-782-4852New Holland, Hesston, Woods, White-New Idea, AGCO, [email protected]

DAviD WArner, will be completing Jeff Bull's termWarner Tractor & Equipment Inc., Troy, PA570-297-2141Case, Case/IH, Takeuchi, LinkBelt, LandPride, Agr. & Construction [email protected]

NORthEast EquipMENtDEalERs assOciatiON

128 Metropolitan Park Drive • Liverpool, NY 13088 800-932-0607 • www.ne-equip.com

In last month’s article a reference was made to the employee recruitment challenges of equipment dealers and their potential impact on a dealer’s ability to grow market share, increase sales and profitability. Imagine how surprised I was to hear a manufacturer’s sales manager tell me, “They simply don’t have the service (support) staff necessary to support an increase in sales.” Since then, I have begun to think of the challenge in terms of a lack of infrastructure: it doesn’t matter how good your widget is if you can’t get it to market!

I’d like to report to you, our members, that NEDA has renewed our focus on workforce development and has made good progress developing part-ners and facilitating new relationships with a goal of combining efforts and resources (state government, manufacturers, institutions and dealers), in an effort to enhance our members’ ability to sell our industry as a career path with ample opportunity for growth, income and quick fulfillment! All while keeping in mind that our most difficult “customers” will be the Guidance Counselors, Parents, and Grandparents: win them over, and we will be well on our way to success. Look for more news in next month’s “Observations”!

On the state legislative front, we continue to see active and effective lobbyists working against our efforts to amend state dealer laws. That being said, I am happy to report that we’ve had a very busy month hosting, visiting and corresponding with numerous PA and VT legislators. I’d like to person-ally thank those dealers who went beyond the call of duty and hosted legis-lators at their dealerships. Please understand that those onsite visits, and the relationships that evolve as a result, are key to our success. There is simply no better way to truly educate legislators.

Permanently amending both Section 179 deductions bonus deprecia-tion incentives as well as updating the depreciation schedule of Agricultural Equipment to five years, mirroring the Construction Equipment schedule in Federal tax law, continue to be legislative priorities for NEDA. As many of you may remember, the accelerated Section 179 bonus depreciation schedule was not renewed until late in December of 2014, leaving dealers and their customers little time to react. Worse yet, the Bonus depreciation and appro-priate Section 179 levels were allowed to expire at the end of 2014, and have fallen back to the original limit of $25,000 and deduction’s phase-out beginning when $200,000 of assets have been placed into service during the calendar year. to be clear, those rates are too low to have any mean-ingful impact on the market place!

I will not pretend to have a solution to dysfunction in D.C. and know that it is far easier to tell yourself that your voice doesn’t make a difference, that you are fed up with the “idiots”….but the reality is, that by choosing not to speak up, you can rest assured that “they” will never hear your voice!!! Speaking up /making a difference isn’t all that hard either, particularly when

continued on page 4

Observationsfrom the FIELD

Tim WentzField Director717.576.6794

4 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”

CharLes. F. sNYDer Charles. F. Snyder, 89, of Tamaqua, PA, died recently. He was the husband of the late Kadie (Jones) Snyder, who died on February 11, 2014. They were married for 69 years on December 30, 2013. Prior to retiring, he and his wife owned and operated Charles S. Snyder Farm Equipment Inc., Tamaqua, and was a lifelong farmer. He was an

Army veteran of WWII. He was a member of the Barbershop Chorus for over 25 years, and in 1986 he was named Barbershopper of the Year. Surviving are two sons, Chester and his wife Jean, and Rev. Russell and his wife Diane, both of Andreas: four daughters, Edna, wife of Erlin Moyer, of New Ringgold, Nancy, wife of Richard Knadler, of Tamaqua, Hope, wife of Joe Gramlich, of Lehighton, and Sarah, wife of Glenn Rarick, of Tamaqua; and numerous grandchildren, nieces and nephews. Funeral services were held October 1, in St. Peter's Union Church, Mantzville, Donations may be made in his name to the St. Peter's Union Church Building Fund, 184 St. Peter's Road, Tamaqua, PA 18252.

Observations continued from page 3

we speak and act as a group. All it takes is a letter, a phone call followed by a thank you note, or even better yet an invitation to visit your dealership or attend an event at your dealership. in cooperation with Natalie J. higgins, Vp of Government Relations and General counsel, Equipment Dealers association NEDa has developed a set of talking points for your use and reference. please e-mail me [email protected] and i’ll send you a copy and help you walk through the process. together we can lever-age everyone’s voice and truly make a difference!

REap the benefits of membershipand your pROFits will follow!

"Sometime back I received in the name of our country the bodies of four marines who had died while on active duty. I said then that there is a special sadness that accompanies the death of a serviceman, for we're never quite good enough to them-not really; we can't be, because what they gave us is beyond our powers to repay. And so, when a serviceman dies, it's a tear in the fabric, a break in the whole, and all we can do is remember."

Excerpt of Remarks by President Ronald ReaganVeterans Day National CeremonyArlington National Cemetery, Arlington, VirginiaNovember 11, 1985

All Gave Some,

Some Gave All!

Never Forget!!!


Charter Software’s Higher Purpose Expressed In Charter4Charity Campaign

Charter Software and Kubota Team Up For Smooth Integration

Charter Software is proud to be helping dealerships and customers flourish. We’ve embarked on our most powerful upgrade yet. One that will not only enrich our customers’ lives, but will change the world for the better. It’s our cause, it’s our higher purpose. We are launching Charter4Charity at the Kubota National Dealer meeting in Atlanta. For each visitor to our trade show booths this season, we will donate $1 to charity. Businesses that agree to a demonstration of our ASPEN business management software, we will donate $100! “We hope as many people as possible will visit our booths this trade show season in order to help boost awareness for charity. It is our responsibility not only to our customers, our families, and our industry partners - it is to making this world a better place,” said Anne Salemo, President of Charter Software. Software Inc. Charter Software, Inc. is headquartered in Littleton, CO and was founded in 1978. Charter Software provides affordable, Windows-based business management software designed to improve efficiency and increase the profitability of equipment dealerships. Charter Software works closely with the equipment industry's leading suppliers to create streamlined EPC/e-commerce integration with their software, including your association, NEDA. For more information on Charter Software please visit: http://chartersoftware.com.

At the Kubota Annual Dealer Meeting in Atlanta, Charter Software and Kubota Tractor Corporation announced new integrations between Kubota's various systems and Charter Software’s flagship business management system, ASPEN. The key features allow dealers to perform powerful Kubota-specific parts functions from within ASPEN, eliminating the need to leave ASPEN to log into a portal. The end goals are to save Kubota dealers time, reduce duplicated efforts and data entry errors, and serve customers faster and more effectively. From virtually any ASPEN parts, point of sale or work order screen, dealers can check parts availability at Kubota parts depots as well as other Kubota dealers. Dealers can submit parts orders to Kubota from within ASPEN’s parts order screen without any log in or additional steps, and with the sophisticated Kubota parts orders search function, dealers can find prior orders and check the status of orders. All of this integration piggybacks well with Charter’s existing integration with Kubota’s K-PAD electronic parts catalog system that allows the dealer to create pick lists in K-PAD and drop them onto invoices, work orders and/or parts orders. “I am so proud of our development team for working so well with the Kubota team on this project,” said Anne Salemo, President/CEO of Charter Software. She continued, “we’ve established something special here with Kubota, and true partnership for the future that will benefit Kubota dealers for decades!” The results of this endeavor support Kubota’s initiative to work with leading business management systems closely to provide the tools that their dealers need to compete and grow.

Charter Software and Kubota Team Up For Smooth Integration

Gold Level Status

2015

WinnerGold Level Status

2014

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to

transformyour

business.

power

Gold Level StatusWinner

powertransform

business.

The

transformpowerpower

TheThe

There’s a reason KIOTI® is one of the fastest growing tractor brands in North America. Our tractors and UTVs are setting the new standard for innovation, power and quality. Oh yeah, and no one takes better care of its dealers – 2014 and 2015 NAEDA Gold Status Winner for exceptionally high ratings among its dealer network.

Visit Kioti.com or call 1-877-GO-KIOTI to join the pack.Kioti.com

© 2015 KIOTI Tractor Company a Division of Daedong-USA, Inc.

2014 and 2015 Gold Level Status Presented to Kioti for attaining an outstanding level of achievement based on dealer ratings from the NAEDA Dealer/Manufacturer Relations Survey


EQUIPMENT INDUSTRYN e w s

of Torgerson’s, which carries Case IH, Bourgault, and MacDon.

•south central - Harold Chapman Jr., general manager of Crown Power & Equipment, which carries Case IH, Kubota, Cub Cadet, and Kinze.

•southwest - Tom Rosztoczy, president and chief executive officer of Stotz Equipment, which carries John Deere.

“We’re fortunate to have this distinguished group of industry leaders to guide the association,” said Rick Lawhun, president & CEO of the Equipment Dealers Association. “The association is in the midst of significant change and we look forward to the new perspectives and initiatives this group will provide.”

aBOut us Founded in 1900, the Equipment Dealers Association (EDA), formerly known as the North American Equipment Dealers Association (NAEDA), is a non-profit trade organization representing 4,500 retail dealers extensively engaged in the sale and service of agricultural, construction, industrial, forestry, outdoor power, lawn and garden, and/or turf equipment. EDA provides essential value to its members by enhancing the dealer-manufacturer relationship and advocating for a positive legislative and regulatory environment. EDA is headquartered in St. Louis, MO and is affiliated with regional associations located throughout the United States and Canada—your association (NEDA). For additional information, visit www.naeda.com.

EQUIPMENT DEALERSASSOCIATION ANNOUNCES NEW BOARD MEMBERS

ST. LOUIS, MO - The Equipment Dealers Association (formerly known as the North American Equipment Dealers Association) announced the newly elected members of its 2015-16 board of directors, which officially convened on October 1, 2015.

NEw BOaRD MEMBERs ElEctED tO 1-yEaR tERMs iNcluDE:•canada - Jim Backus, general manager of Kubota

Country, which carries Kubota, Vermeer, Land Pride, and Merlo.

•Great lakes - Mark Laethem, co-owner and manager of Farm Depot, which carries Kubota, Ag Chem, Fendt, Challenger, Krone, and Geringhoff.

•Gulf coast - Randy Anderson, co-owner of Progressive Solutions Holdings (dba AimTrac), which carries Case IH.

ElEctED tO 2-yEaR tERMs:•Mid-atlantic - Brown Gwynn, owner and chief

operating officer of Limestone Farm Home & Worksite, which carries John Deere, Kuhn, EZTRAIL, and J&M.

•North central - Ivan Dorhout, owner of Town & Country Implement, which carries Case IH, New Holland, and Kubota.

•Northeast - Brian Carpenter, co-owner of Champlain Valley Equipment, Middlebury, Vermont, which carries New Holland, Kubota, Case, Kuhn, Bobcat, Sunflower, Kinze, Great Plains, Land Pride, and Woods. Carpenter is a graduate of St. Lawrence University where he earned a B.S. in Economics. For more than 30 years, he was an officer in the United States Army and served as Commander of the Vermont Army National Guard, 2010-14. Carpenter also served on the New Holland Dealer Council and the Kubota Dealer Council and is a member of the Northeast Equipment Dealers Association.

ElEctED tO 3-yEaR tERMs:•Northwest - Brion Torgerson, chief executive officer

2016 N

EDA AN

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ETINGS

Mon

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12TRUCKING COMPLIANCE SEMINARTRUCKING COMPLIANCE SEMINARTRUCKING COMPLIANCE SEMINARTRUCKING COMPLIANCE SEMINARTRUCKING COMPLIANCE SEMINARTRUCKING COMPLIANCE SEMINARTRUCKING COMPLIANCE SEMINARTRUCKING COMPLIANCE SEMINARTRUCKING COMPLIANCE SEMINAR

8:00 - 8:30 am WelcoMe & introductions• AgendaandIndustryPolls• 10-MinuteTableExercise• Eachtableisassignedtoacategorytodiscussthetopchallengestheyexperience

• Findingswillberecorded(i.e.flipchartprovidedbyfacility)

8:30 - 9:30 am General revieW on vehicle MarkinGs, reGistration, inspection requireMents, accident reGister, Mcs-150, etc.• LatestNewsandRequirements• TopViolationsandComplianceSafetyAccountability(CSA)Applicability

• TableExercise–TopChallenges• BestPractices/What’sYourRisk

9:30-10:15am driver coMpliance: driver qualiFication (dq) and coMMercial driver’s license (cdl) overvieW• LatestNewsandRequirements• TopViolationsandCSAApplicability• TableExercise–TopChallenges• BestPractices/What’sYourRisk

10:15–10:30am|break

10:30-12:00pmhours oF service (part 395)• LatestNewsandRequirements• TopViolationsandCSAApplicability• TableExercise–TopChallenges• BestPractices/What’sYourRisk12:00-12:45pm|lunch break

12:45-1:30pm druG & alcohol testinG(part 40)• LatestNewsandRequirements• TopViolationsandCSAApplicability• TableExercise–TopChallenges• BestPractices/What’sYourRisk

1:30-2:15pm dot audits (six Factors)• LatestNewsandRequirements• TopViolationsandCSAApplicability• TableExercise–TopChallenges• BestPractices/What’sYourRisk

2:15-2:45pm overWeiGht/over diMensional perMits• TemporaryandAnnualPermits• EscortVehicles

2:45-3:00pmquestions/close oF proGraM

NortheastEquipmentDealersAssociationEstablished 1901

Committed to Building The Best BusinessEnvironment for Northeast Equipment Dealers

Space is Limited! Register ASAP to be assured a place in this Seminar!!

TheDepartmentofTransportation(DOT)requiresSafetyTrainingforeverypersonwhooperatesacommercialmotorvehicleininterstateandintrastatecommerce forallemployersupervisorsandothers.Asanemployerofcommercialdrivers, youarerequiredtoenforcestringentrequirementsrelatingtosafeoperationofvehiclesandemployeesafetyandhealth.

do you understand the requirements???Veryfew employersdo,andIFthereisanaccident,youcanbeheld accountableinacivilsuit,aswellasbeingsubjecttofinesof$2,000.00minimumperviolationandupto$450,000.00 formultipleviolations.

NortheastEquipmentDealersAssociation(NEDA)isofferingthissafetytrainingfordriversandtheiremployersupervisorstoassistmemberstocomplywiththeseregulations.

Who should attend?Allowners(ifpossible);GeneralManagers;HumanResourcepersonnelwhohandletruckingrelatedissues,drivers,dispatchers,loadersandemployeesthatassistwithloadingequipment.

dot saFety coMpliance aGenda service overvieWbasing the 1-day training around the already experienced executive Forum content, the safety consultant will emphasize additional areas including transportation of large/small construction equipment, agricultural equipment, etc., including load securement and potential issues with over-dimensional and overweight vehicles. topics include:

to reGister online click herehttps://WWW.ne-equip.orG/events/#!event-list


This is part one of a two-part article. Part two will appear in December's NE Dealer.

Professional sales and marketing people worldwide, know that in order to sell any kind of product, they must at some point approach and sell (face to face) the customer what they have to offer. Too many times, in a typical equipment dealership, our marketing approach to the aftermarket is exactly the opposite. We have a tendency to believe that parts, service and rental sales are guaranteed and we have a tendency to wait for the customer to approach us. Most equipment dealers’ aftermarket efforts are reactive rather than proactive. Forty plus years ago, with the urging of the manufacturers, many successful equipment dealers established a parallel sales force to their equipment sales personnel. Clark Equipment Company was one of the first to champion Customer Service Sales Representatives or CSSR personnel. Several years ago, John Deere’s Agricultural Division initiated their dealer program for calling on the customers before, during and after the sale. This marketing program is growing slowly and where the dealers are involved, the program is proving highly successful. Despite this, in the rest of the industry only a small amount of effort is being put forth by the manufacturers. With product differences narrowing dramatically, customers are seeking value added services. Surveys continue to reflect the customers’ interest. Customers want to know whether or not the dealer is willing and able to satisfy their needs after the sale. In particular dealers do a poor job of marketing their Service Departments. Will the dealership provide parts availability, quick service response time, rental capability, operator training programs, as well as safety instruction? These important and profitable areas of value added selling keep the customer returning for their second, third and even fourth piece of equipment from your dealership. It is the “key” to increased market share of product.

Your Aftermarket Support Is YourDealership’s Most Unfailing Weapon

Against The Competition! We are continually asked by equipment dealers, how to increase margins on equipment sales (though our area of expertise is not selling equipment). Margins on complete goods are nowhere near what most equipment dealers want them to be. Despite this, studies and surveys indicate that customers will pay more for equipment if the dealership provides the service after the sale. Research indicates that a very high percentage of purchase decision makers would pay more for the

equipment, if quality aftermarket services were discussed and provided. This service cannot just be perceived, it must be a fact of service before, during and after the sale. The question is: How much more are they willing to pay? Play a game of what if with your financial statement. Add 1% to 3% or even 5% to your margins on complete goods and discover the overall effect this has upon your dealership’s financial strength. We have experienced successful equipment dealers in all types of industries who have learned the truth of these surveys. These successful dealers have increased their complete goods margins, and at the same time, increased both product support sales and product support profits. This is why the successful and profitable equipment dealer works to develop a strong parallel selling team for the dealership. A selling team devoted to increasing the dealer’s productivity, profitability, and customer delight! You must recognize up front that in today’s marketplace that your customers have a choice! A choice of where they purchase their parts, their service, their rental and their operator and safety training, after they purchase the equipment from your dealership. If equipment dealers and department managers recognize this important fact, they will quickly recognize the necessity of marketing their aftermarket through a strong CSSR program. Many times an equipment dealer will tell us they do not need a Customer Service Sales Representative because the dealer is already getting all of the product support business, or at least all the dealership can possibly handle. Most dealers will tell you that their equipment sales personnel do this job very well. In fact these dealers are walking away from the opportunity they created when they sold the equipment in the first place. Your equipment dealership probably does not need a CSSR if your financial numbers are somewhere close to the following: parts: 28% of your dealership’s sales are parts, your margins are 30% to 34%, and all your customers are using your dealership for 90% of their parts and accessory requirements. service: 25% contribution (customer, internal & warranty) of your total dealership’s sales are service, your dealership is achieving an 80%+ service billing efficiency and your service gross margins are running between 65% and 70%. Rental: Your dealership is experiencing 6% of acquisition cost as utilization dollars and a gross profit margin of 45%. training: Your customers are all using your dealership for operator and safety training and your dealership is showing a 50% gross profit on this training.

CUSTOMERS DON’T ALWAYS APPROACH YOU FOR BUSINESS YOU SOMETIMES HAVE TO APPROACH THEM!

thE aFtER MaRKEt salEs FORcE

BY JOHN WALKERPresident,AfterMarketServicesConsultingCo.,Inc.–817StockbridgeDrive,#399,Ft.Mill,SC29708•Cell918-230-0791

www.amsconco.com


DON’T BE CAUGHTWITH OUTDATED EQUIPMENT

TheChargeCardGuys.com866.367.1818

credit & debit - processing - pos solutions - merchant funding - loyalty & giftcheck - mobile processing - wireless solutions

- Make sure you are EMV card, chip and PIN ready- All merchants must be updated by October 1st- Complimentary equipment provided- Complimentary annual PCI Insurance assistance


TOP FIvE THINgS TO KNOW ABOUT (EDA) EMV/CHIP CARD TECHNOLOGY

EMV technology and chip card acceptance is changing the way your customers pay. Educate yourself on this technology so that your business is ready to accept chip cards and avoid potential counterfeit card fraud liabil-ity. For more information, visit: www.bechipcardready.com

As a business owner, you may have noticed that your customers are look-ing for new ways to pay. Whether it’s inserting their new chip card into your point-of-sale (POS) terminal or asking if you can accept an EMV transaction, here’s what you need to know to get your business chip card ready.

1. chip cards, also known as “chip and piN” and “chip and signature” cards; come with a microchip embedded in the card. The technology is more secure than what’s found in traditional magnetic stripe cards, which can all too easily be skimmed for counterfeit purposes. Retailers, banks and card issuers lost $5.3 billion to credit-card fraud in America in 20121 —which can be effectively curtailed with widespread use of EMV technology. Once chip card technology was implemented in the UK, it drove a 72% de-crease in face-to-face card fraud.2 Similarly, coun-terfeit card fraud in Canada decreased 48% from 2011-2013 following the EMV roll out there.3 The proof is in the numbers!

2. Effective October 1, 2015, counter-feit fraud liability, which has traditionally been assumed by the card issuer, will be assumed by

any party that does not enable EMV. The best way to protect your business from this liability is to use EMV-enabled POS terminals that accept chip card transactions. 3. Recognize the difference between a magnetic stripe card and a chip card transaction. The most notable change to you and the cardholder is that when using chip cards, the card never leaves your customer’s hand, and it’s inserted into the terminal during the entire transaction rather than quickly swiped through the side of the terminal. You present the terminal or a PIN pad to your cus-tomer for payment. 4. Determine whether your pOs termi-nals are EMV capable. An EMV capable terminal may just need a software download to accept chip cards. An older terminal (often pre-2013) may require an upgrade to a more recent model. If you know your terminal is EMV-enabled, but you’re not sure how to run chip transactions, there are a variety of how-to resources available. 5. EMV/chip card technology is new for your customers as well. Be sure to educate your employees on how to conduct a chip card transaction. Ensuring your em-ployees can walk a customer through this new type of transaction provides a better customer experience and further reduces the incident of card present fraud during this EMV technology transition.1 The Economist, Why America Has Been Slow to Adopt

Modern Credit Card Technology, October 2014 2 Financial Fraud Action UK, Fraud the Facts, 2014 3 Canadian Banker’s Association, Credit Card Fraud and Debit

Card Fraud Statistics, 2012-2013

an upgrade to a more recent model. If you know your terminal is EMV-enabled, but you’re not sure how to run chip transactions, there are a variety of how-to resources available.

your customers as well.

conduct a chip card transaction. Ensuring your employees can walk a customer through this new type of transaction provides a better customer experience and further reduces the incident of card present fraud during this EMV technology transition.1

2

3


ROBERT WATSONMEMORIAL TOY AUCTION

LeClar Bros. Auction ServiceFriday, February 26, 2016 | 5:00p

Building 2, Arts & Home Center

14 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”14 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”

hEalth iNsuRaNcE ... aFFORDaBlE caRE act ... MEDical

HEALTH COVERAGE PROVIDERS: UNDERSTANDINGMINIMUM ESSENTIAL COVERAGE

most TRICARE, most VA programs, Peace Corps, DOD Non-appropriated Fund Program

Employer sponsored coverage• In general, any plan that is a group health plan

under ERISA, which includes both insured and self-insured health plans. Importantly, employer plans that cover solely excepted benefits, such as stand-alone vision or dental plans, are not MEC

individual market coverage• Includesqualifiedhealthplansenrolledinthrough

the federally facilitated and state-based market-places and most health insurance purchased indi-vidually and directly from an insurance company

Grandfathered plans•Generally, any plan that existed before the ACA

became effective and has not changed

Miscellaneous MEc•Otherhealthbenefitscoveragerecognizedbythe

Department of Health and Human Services as MEC

For more information, see our Questions and Answers on Information Reporting by Health Coverage Providers on IRS.gov/aca.

The Affordable Care Act requires any person or organization that provides minimum essential coverage, including employers that provide self-insured group health plans, to report this coverage to the IRS and furnish statements to the covered individuals. These reporting requirements affect:

•Healthinsuranceissuersorcarriers•Theexecutivedepartmentoragencyofagovern-

mental unit that provides coverage under a gov-ernment-sponsored program

•Plan sponsors of self-insured group health plancoverage

•Sponsors of coverage that the Department ofHealth and Human Services has designated as min-imum essential coverage

For purposes of reporting by applicable large em-ployers, minimum essential coverage means coverage under an employer-sponsored plan. Minimum essential coverage does not include fixed indemnity coverage, life insurance or dental or vision coverage.

MiNiMuM EssENtial cOVERaGE DOEs iNcluDE:

Government-sponsored programs•Medicare part A, most Medicaid programs, CHIP,

Dear [insert company name] Employee:

At [insert company name], we value our employees and are committed to providing you and your family with affordable, substantial health benefits that meet the requirements of “minimum essential coverage” under the Affordable Care Act (ACA).

Form 1095-B is being provided to you as proof of the health coverage we offer you and your family. It contains information about who provides your health insurance, as well as which members of your family are covered by the policy and the months of the year each person was covered.

You can use Form 1095-B to help you report your insurance coverage when filing your tax return. Only one form is provided for all the individuals listed on your policy; you may need to provide copies to your spouse or dependents, as necessary.

If you have any questions, please contact [insert name] at [insert phone].

Sincerely,

[insert name] [insert title]

At to providing you and your family with affordable, substantial health benefits that meet the requirements of “minimum essential coverage” under the Affordable Care Act (ACA).

Form 1095-B is being provided to you as proof of the health coverage we offer you and your family. It contains information about who provides your health insurance, as well as which members of your family are covered by the policy and the months of the year each person was covered.

You can use Form 1095-B to help you report your insurance coverage when filing your tax return. Only one form is provided for all the individuals listed on your policy; you may need to provide copies to your spouse or dependents, as necessary.

If you have any questions, please contact phone]

MinimumEssentialCoverage (ACA)

Employee Letter for Form 1095-B, Sample Letter to EmployeesThis letter explains Form 1095-B to employees. requires customization.


hEalth iNsuRaNcE ... aFFORDaBlE caRE act ... MEDical

DETERMINE IF YOU ARE SUBJECT TO THE INDIVIDUAL SHARED RESPONSIBILITY PROVISION

The Affordable Care Act includes the individual shared responsibility provision that requires you, your spouse, and your dependents to have qualifying health insurance for the entire year, report a health coverage exemption, or make a payment when you file.

who is subject to this provision? All U.S. citizens living in the United States are subject to the individual shared responsibility provision. Children are subject to the individual shared respon-sibility provision.

•Each child must have minimum essential cover-age or qualify for an exemption for each month in the calendar year. Otherwise, the adult or married couple who can claim the child as a dependent for federal income tax purposes will generally owe a shared responsibility payment for the child.

Senior citizens are subject to the individual shared responsibility provision.

•BothMedicarePartAandMedicarePartC–alsoknown as Medicare Advantage – qualify as mini-mum essential coverage.

All permanent residents and all foreign nationals who are in the United States long enough during a cal-endar year to qualify as resident aliens for tax purposes are subject to the individual shared responsibility provi-sion.

•ForeignnationalswholiveintheUnitedStatesfora short enough period that they do not become resident aliens for federal income tax purposes are

not subject to the individual shared responsibility payment even though they may have to file a U.S. income tax return.

• IndividualswhoarenotU.S. citizensornationalsand are not lawfully present in the United States are exempt from the individual shared responsibil-ity provision. For this purpose, an immigrant with Deferred Action for Childhood Arrivals status is considered not lawfully present, and therefore is eligible for this exemption even if he or she has a social security number. Claim coverage exemptions on Form 8965, Health Coverage Exemptions.

•U.S.citizenslivingabroadaresubjecttotheindi-vidual shared responsibility provision.

•However,U.S.citizenswhoarenotphysicallypres-ent in the United States for at least 330 full days within a 12-month period are treated as having minimum essential coverage for that 12-month pe-riod. In addition, U.S. citizens who are bona fide residents of a foreign country or countries for an entire taxable year are treated as having minimum essential coverage for that year.

•AllbonafideresidentsoftheUnitedStatesterrito-ries are treated by law as having minimum essen-tial coverage.

For more information, see our tool Am I required to make an Individual Shared Responsibility Payment? Interactive Tax Assistant, and the Individual Shared Re-sponsibility Provision Questions and Answers on IRS.gov/aca.

Northeast Dealer | NOVEMBER 2015 … 15Northeast Dealer | NOVEMBER 2015 … 15Northeast Dealer

Dr. Virend Somers, a cardiologist from the Mayo Clinicwho is lead author of the report in the July 29, 2008 issue of theJournal of the American College of Cardiology.

Most heart attacks occur in the day, generally between 6 A.M. and noon, Somers said. Having one during the night, when the heart should be most at rest, means that something unusual happened.Somers and his colleagues have been working for a decade to show that sleep apnea is to blame.

1. If you take an aspirin or a baby aspirin once a day, take it at night. The reason: aspirin has a 24-hour "half-life". Therefore, if most heart attacks happen in the wee hours of the morning, the aspirin would be strongest in your system.

2. FYI, aspirin lasts a long time in your medicine chest for years. (When it gets old, it smells like vinegar). Please read on...

Something that we can do to help ourselves - nice to know.Bayer is making crystal aspirin to dissolve instantly

on the tongue. They work much faster than the tablets. Why keep aspirin by your bedside? It is about Heart Attacks.

There are other symptoms of a heart attack besides the pain on the left arm. One must also be aware of an intense pain on the chin, as well as nausea and lots of sweating, however these symptoms may also occur less frequently.

Note: There may be NO pain in the chest during a heart attack.The majority of people (about 60%) who had a heart attack

during their sleep did not wake up. However, if it occurs, the chest pain may wake you up from your deep sleep.

If that happens, immediately dissolve two aspirins in your mouth and swallow them with a bit of water.

Afterwards:- Call 911- Phone a neighbor or a family member who lives very close by- Say "heart attack!"- Say that you have taken two aspirins, take seat near front door and wait for their arrival and...- Do NOT lie down.

mayo clinic - Aspirin not a joke!


BY BART BASI

BUSINESS SUCCESSION iN a NutshEll

Let’s face it; there is nothing exciting about bleach and soap. People in the businesses such as the sanitary supply industry work hard every day to find a way to sell their product and do the ever constant nine-to-five-and-beyond to sell their products and run their companies. Making money in any business means ultimately showing positive cash flow and a bot-tom line profit. While working hard at the business of business, business people often figure they will create and carry out their exit plans at some time in the future. Not all get this opportunity! Business Succession is the process wherein a plan is made and implement-ed to transfer a business from one gen-eration to the next or from one owner to the next. Many business owners for-get this important step in business. In fact, a recent survey revealed that 62% of distributors do not have a full and ac-tive succession plan in place. They are in danger of working all of their lives cre-ating, building, and running a successful business only to have the business dis-solved at their retirement or death. As such, a valuable asset is lost. Thousands or millions of dollars which could have been reinvested, saved, or enjoyed otherwise are lost in an instant. Further-more, failure to implement a business succession plan can result in unnecessary estate taxes. This is why succession planning and implementation is important. Don’t let your lifetime of hard work end up being a garage sale.

procedure The first thing to understand in business succession is that it will take time to implement. A number of steps must be completed in order to receive the maximum value for your business and make the transition as smooth as possible. Also, there are many factors to consider when creating a business succession plan. Your age, health, the industry, the economy, your children’s’ interests, and their ages are just a few factors. The first thing you will want to do is employ a professional who has experience to guide you through the planning process. After choosing a pro-fessional, the professional will want to perform a variety of functions to plan and implement your business succes-sion program. The procedures include examining who the potential heirs or buyers are, valuing the company, creat-ing the ideal scenario in which to sell your business or to pass it on, developing a strategy to deal with estate taxes if any, and establishing a retirement program. To implement, the professional will start by looking at

qualified successors. It is a good idea to have the succes-sor work in the business prior to the transfer. The business can then be valued using a variety of methods. By using a variety of methods instead of one, the valuator can better justify the value of your business. In creating an ideal sce-

nario to sell, the professional will review financial statements, look at the opera-tion, etc., and will then define economic parameters signifying when to sell. (By the way, right now is the best time to sell based on economic and tax consider-ations.) The professional will also make suggestions as to what you should do to maximize your business’ value. These recommendations will include things such as housekeeping details, restating financials, and the like. It is synonymous to adding curb appeal to a house in or-der to get a better sale price for it. The professional will also look at estate taxes and set up a plan to deal with taxes. Trusts and gifting can be implemented to achieve lower estate taxes. Finally, retirement planning will be addressed by reviewing your retire-ment accounts, your business situation,

etc. The professional will then make recommendations for your retirement plan.

conclusion The right time to start thinking about a succession plan is now. No one knows what tomorrow holds. Some-day somebody else will be in charge of your business if a proper succession plan is implemented. Additionally, many factors have come together to create an ideal environ-ment in which to sell or to pass your business along. These factors include a low capital gains rate, low interest rates, legal authority which lowers capital gains taxes on C cor-porations, lower estate taxes, and many other factors that make right now the optimal time to create a succession plan and implement it. The Center frequently engages in estate, business succession, and tax planning. If you have any questions or would like to create a business succession plan, call the professionals at The Center to begin the pro-cess. Financial, Legal & Tax Advisory, The Center for Finan-cial, Legal & Tax Planning, Inc. Dr. Bart A. Basi, Senior Advisor of the Center for Financial, Legal & Tax Planning, Inc., is an expert on closely-held compa-nies, an attorney, and CPA. He is a member of the American Bar Association’s Tax Committees on Closely-Held Businesses and Business Planning, Marion, Il. – 618-997-3436 – www.taxplanning.com

BusinessSuccession is the

process wherein a plan is made and implemented to

transfer a business from one

generation to the next or from one

owner to the next.


TRAINYOUR

TRAINERForklift

OperatorSafety

Training&

Certification Courses

required every three years

If you do not have a certified trainerat your dealership or have mistakenly

let your certifications lapse ...

NEDA cAN hElp!

If you do not have a certified trainerIf you do not have a certified trainerIf you do not have a certified trainerat your dealership or have mistakenlyat your dealership or have mistakenlyat your dealership or have mistakenly

let your certifications lapse ...let your certifications lapse ...let your certifications lapse ...

NEDA cAN hElp! NEDA cNEDA cAN hElp! NEDA cAN hElp! ANNEDA cAN hElp! NEDA cAN hElp! NEDA cNEDA cAN hElp! ANNEDA cAN hElp! NEDA cNEDA cAN hElp! NEDA cAN hElp! hNEDA cAN hElp! NEDA cAN hElp! ENEDA cAN hElp! NEDA cAN hElp! lp! NEDA cAN hElp!

NEDA staff provides one forklift safety training

& certification course at your dealership

for all staff personnel authorized to operate

your forklift(s)[must be over 18 years of age or older]

$400.00Plus Expenses for on-site training

Training Materials IncludedPrices Subject to Change

If you would like to schedule acErtIfIcAtIoN/

rEcErtIfIcAtIoNCall Kelli or Dave

at the Association, 800-932-0607

NeeDFOrms?

NEDA can supply your dealership with top

quality and competitively priced customer printed

invoices, statements, checks, work orders, counter tickets, laser

forms and other business forms and supplies.

Contact Kelli at the NEDA Office - 800-932-0607 for a FREE quote on all your forms and supply needs.



SAFE, EFFICIENT, COST EFFECTIVE LIQUID TIRE BALLAST

TRACTOR OWNERSBe sure to ask your dealer for the #1 tire ballast liquid – CITRASTAR

TRACTOR DEALERSWe provide a Product that is . . .

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Call Us TodayToll Free 888-678-2707 | Office 518-945-1167

18 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”18 …”Committed to Building the Best Business Environment for the Northeast Equipment Dealer”

TAX TIPS For some years now, the federal tax law has includ-ed a provision allowing business taxpayers to take an additional 50 percent of depreciation on nearly all business property placed into service in the tax year. Many motor carriers have taken advantage of this bonus depreciation when they buy rolling stock or other equipment. The catch has always been that bonus depreciation is one of those several dozen tax provisions that Congress has chosen to renew every year or two instead of making it a permanent part of the tax code. Bonus depreciation was not in effect for 2014, until Congress reenacted it very late in the year, retro-actively, for calendar 2014. (Then the provision went out of existence again, and is not currently in effect.) By the time Congress acted last December however, many taxpayers had already filed their fiscal-year or short-year tax returns for periods covering the time during which they had put into service property that qualified for the restored bonus depreciation. Most of these taxpayers presumably did not claim bonus depreciation for that property. The Internal Revenue Service has now issued guidance on how such taxpay-

IRS Issues Guidance on 2014 Bonus Depreciation


ers may claim the depreciation. The most straightforward way is for the taxpayer to file an amended return for the period in which the property was put into service, and to have that amended return in before the taxpayer's return is due for the succeeding tax year. If the amendment is filed timely, IRS will allow the additional depreciation for the 2014 property. The guidance, published in Revenue Procedure 2015-48, also includes advice on how to claim the de-preciation another way, how to elect not to claim the depreciation, but to apply it against alternative mini-mum tax, and so forth. The Revenue Procedure is available at: https://www.irs.gov/pub/irs-drop/rp-15-48.pdf -- and 26 CFR 1.168(k)-1: Additional first year depreciation. (Also Part 1, § 179.) - Rev. Proc. 2015-48 --- The principal author of this revenue procedure is Douglas H. Kim of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information regarding this revenue procedure, contact Mr. Kim at (202) 317-7005 (not a toll-free call).

NEDa 2016 aNNual / REGiONal MEEtiNGs Mark your calendar for the NEW FORMATED NEDA Annual/Regional Meetings:

DOT Trucking Seminar.You spoke and we listened. This year’s annual meeting format has been

changed. It will consist of a 1 day training session on DOT regulatory information with dealer participation. J.J. Keller & Associates Inc, a recognized leader in the safety consulting field will be emphasizing a safety compliance overview of the DOT regulations at all three (3) of the 2016 NEDA Annual/ Regional Meetings scheduled for: February 8th, 2016 in Lancaster, PA February 10th, 2016 in Liverpool, NY and February 12th 2016 in Concord, NH. Mark your calendars now and watch for more details and registration forms in upcoming Weekly Bytes, monthly newsletters and faxes. Your transportation personnel and drivers should be at these important regional meetings.

see page 9 for a complete agenda!


Northeast Equipment Dealers Associations'Officers, Directors and Staff

wish you and your familya Thanksgiving filled with love,

warm moments and happy memories.

O God, when I have food, help me to remember the hungry;

When I have work, help me to remember the jobless;

When I have a home, help me to remember those who have no home at all;

When I am without pain, help me to remember those who suffer,

And remembering, help me to destroy my complacency;

bestir my compassion, and be concerned enough to help;

By word and deed, those who cry out for what we take for granted.

Amen.- Samuel F. Pugh


RESOURCESRESOURCESRESOURCESHuman

Interview questions: Everyone has them, and everyone wishes they had better ones.

1. why have you had X number of jobs in y years? This question helps me get a full picture of the candidate's work history. What keeps them motivated? Why, if they have, did they jump from job to job? And what is the key fac-tor when they leave? The answer shows me their loyalty and their reasoning process. Do they believe some-one always keeps them down (managers, bosses, etc.)? Do they get bored easily? There is nothing inherently wrong with moving from job to job -- the reasons why is what matters.

2. if we're sitting here a year from now celebrating what a great twelve months it's been for you in this role, what did we achieve together? For me, the most important thing about interviews is that the interviewee interviews us. I need to know they've done their home-work, truly understand our company and the role... and really want it. The candidate should have enough stra-tegic vision to not only talk about how good the year has been, but to answer with an eye towards that bigger-picture understanding of the company -- and why they want to be here.

3. when have you been most satisfied in your life? Except with entry-level candidates, I pre-sume reasonable job skill and intellect. Plus I believe smart people with relevant experience adapt quickly and excel in new environments where the culture fits and inspires them. So, I concentrate on character and how well theirs matches that of my organization. This question opens the door for a differ-ent kind of conversation where I push to see the match between life in my company and

what this person needs to be their best and better in my company than he or she could be anywhere else.

4. if you got hired, loved every-thing about this job, and are paid the salary you asked for, what kind of offer from another company would you consider? I like to find out how much the candi-date is driven by money versus working at a place they love. Can they be bought? You'd be surprised by some of the answers.

5. who is your role model, and why? The question can reveal how introspec-tive the candidate is about their own personal and professional development, which is a quality I have found to be highly correlated with success and ambition. Plus it can show what attributes and be-haviors the candidate aspires to.

6. what things do you not like to do? We tend to assume people who have held a role enjoy all aspects of that role, but I've found that is seldom the case. getting an honest answer to the question requires persistence, though. I usually have to ask it a few times in different ways, but the answers are always worth the effort. For in-stance, I interviewed a sales candidate who said she didn't enjoy meeting new people. My favorite was the finance candidate who told me he hated dealing with mundane details and checking his work. Next!

7. tell me about a project or ac-complishment that you consid-er to be the most significant in your career. I find that this question opens the door to further questions and enables someone to highlight themselves in a specific, non-generic way.

Plus additional questions can easily follow: What position did you hold when you achieved this accomplishment? How did it impact your growth at the company? Who else was involved and how did the accomplish-ment impact your team? Discussing a single accomplishment is an easy way to open doors to additional informa-tion and insight about the person, their work habits, and how they work with others.

8. what's your superpower... or spirit animal? During her interview I asked my current executive assistant what was her favorite ani-mal. She told me it was a duck, because ducks are calm on the surface and hustling like crazy getting things done under the surface. I think this was an amazing response and a perfect description for the role of an EA. For the record, she's been working with us for over a year now and is amazing at her job.

9. we're constantly making things better, faster, smarter or less expensive. We leverage technology or improve processes. In other words, we strive to do more--with less. Tell me about a recent project or problem that you made better, fast-er, smarter, more efficient, or less expensive. good candidates will have lots of an-swers to this question. great candidates will get excited as they share their answers. In 13 years we've only passed along one price increase to our customers. That's not because our costs have decreased--quite the contrary. We've been able to maintain our prices because we've gotten better at what we do. Our team, at every level, has their ears to the ground looking for problems to solve. Every new employee needs to do that, too.

10. Discuss a specific accom-plishment you've achieved in a

continued on page 26

The Strange, Difficult Questions CEOs Ask in Job Interviews For Top Management Positions


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maximize profits for dealers.

Fastline’s multi-layered digital marketing plans help maximize profits for you. By layering a mix of

Fastline.com gallery packages, video packages, web design and hosting, mobile website, email marketing

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Fastline has a marketing specialist in your area that can help you address your challenges.

We are PRECISIONMARKETING

Let us help you discover the precision solution that's right for your business.

Call 800-626-6409 to speak with a sales representative.

EQUIPMENT. FOUND. FAST.

DIGITAL

When to call a CVA

Here are some of the events that trigger the need for a business valuation:

• Buy/Sell Agreements

• Succession Planning

• Mergers and Acquisitions

• Liquidation or Reorganization

• Estate and Gift Tax Planning

• Divorce Proceedings

To be sure you know the actual value of

your most important financial asset, contact

Western Association, your equipment and

hardware specialist.

buying • selling • merging

reorganizing

CERTIFIED BUSINESS VALUATIONSPhone 816.561.5323 Fax 816.561.1249

Toll Free 800-762-5616


BY LANCE FORMWALT, SEIGFRIED BINGHAM, P.C.

As owners or managers of a dealership, you deal with contracts every day – from the complicated financing agreement or IT services agreement to a simple purchase order. Even though all contracts have legal terms (many of you would say it is simply unreadable gibberish!), the tendency of most people that get these contracts when they are the “customer” is to simply sign it and move on so that the real business at hand can get done.

This is a perfectly reasonable reaction when we are dealing with smaller transactions. Even though there are words I wouldn’t like in the contract (if I read it), I make the judgment call that it won’t be worth my time or effort to read and argueabout words in a contract that I won’t be able to get changed anyway. But when it comes to contracts that require a significant investment and involve a long-term relationship, I pay very close attention to the words in the contract and I strongly encourage you to do the same.

As dealers, one of the best examples of a contract where you need to pay close attention is the dealer agreements you have with your manufacturers. These contracts represent key relationships in your business and it is important for you to know what to do when a manufacturer rep stops by with a new contract and says “I need you to sign here so that we can keep doing business.” I know this situation happens on a regular basis and when it happens the next time, I want you to be armed with information so that you know how to respond.

Know your Rights under Dealer protection laws

Farm equipment dealers (and often OPE and construction dealers) in most states and provinces in the US and Canada have laws in

place that recognize the leverage manufacturers have in the dealer-manufacturer relationship. These laws are intended to give dealers a slightly more level playing field. One of the most important protections in many of these laws is that a manufacturer can’t terminate your contract without “good cause.” This typically means that you have to do something to violate the contract and, in many cases (e.g., market share issues), you also get the right to have some time to fix the problem before the contract can be terminated. This is a very important protection for dealers and it is often used reactively to prevent a manufacturer from terminating your contract. However, this protection should also be used proactively to give you leverage when your manufacturer comes to you with a replacement contract. If this happens and you sign the new agreement, you have really just agreed to voluntarily “terminate” your old agreement. As a result, the key thing for you to understand is that the dealer protection laws often allow you to say “no” when asked to sign the new agreement because the manufacturer usually can’t turn around and terminate you for refusing to sign.

what should i do when asked to sign a Replacement Dealer agreement? If you are asked to sign a replacement dealer agreement, I recommend the following simple steps:

• Ask the manufacturer toexplain the changes.

• Ask the manufacturer if alldealers are receiving the agreement.

• Check your files to seeif you have your current

agreement and if not, ask the manufacturer for a copy.

•Tellthemanufacturerthatyouwant to review the contract first and that you don’t plan to sign it while they are waiting.

•Contactyourassociation.Yourassociation executive may be able to help explain the changes or give you insight into why the manufacturer is taking the action. If the change impacts a significant number of dealers, the association may also be able to obtain a legal review to help you understand the changes and the related rights you have under the dealer protection laws.

Please remember to pay attention to the key contracts impacting your business. The words in these contracts matter and you should understand the meaning of changes before signing up for new terms. You may even be able to get changes made to the contract, especially if you have the protection of a state law that gives you some leverage to negotiate.

Lance Formwalt is a member of the Equipment Dealer Practice Group at Seigfreid Bingham, P.C. The firm also serves as legal counsel to the Western Equipment Dealers Association. Lance may be contacted at [email protected] or 816-265-4106. Also see www.seigfreidbingham.com. This article is intended to provide general recommendations and is not intended to be legal advice. You should always consult your attorney for advice unique to you and your business.


DEALER Northeast

The Newsletter of NoRThEAsT EquipmENT DEALERs AssociATioN, iNc.JANUARY 2015 c Vol. 17, No. 190

www.ne-equip.com

NEDA Salutes our Supporting Advertisers. It is our pleasure to list the names of those advertisers who support NE Dealer each month. We trust their advertisement will

be remembered when goods and services are required by you, our dealer members. It is good to do business with companies who are interested in doing business with

you and your industry association.

John Komarisky of Main & Pinckney Equipment Inc., Auburn, NY

has been elected to a one-year term as President of NEDA. John was

installed recently at the association’s Board Meeting in Liverpool, NY.

John is General Manager and co-owner with his wife Barbara and

son Greg who is the dealerships Sales Manager. Main & Pinckney is a

very active and busy high volume single store operation. Their ma-

jor lines are New Holland AG, Vermeer Forage, Bush Hog, Brillion,

Simplicity & Ferris and other short lines. Their market includes the

small farm, rural lifestyle, homeowner, commercial landscape and

Municipal market segments. They have a lot of competition in their

trade area and their success for many decades is a result of their excel-

lent service reputation to this diverse customer mix. Their business continues to increase every year with a focus of out-

standing service and fair, timely and efficient service to their custom-

ers. Their best advertisement comes from customer referrals! John continues to be active in his church, community at large and the local fire district.

John will lead our eleven (11) member Board of Directors, that are responsible for oversee-

ing the associations budget, service and product offerings including the excellent insurance

benefit packages the association offers all its dealer members.

New Northeast Equipment Dealers Association President for 2015

IN THIS ISSUE:3 Observations from the Field4, 6, 8 Association News9 Flat Rate Guide - NEDA10 Speakers at Annual / Regional Meetings11 TwoGreySuits – HR Policies12-13 Industry News14 Accomplishing Results16 90% of Sales Success Is . . .18 Risk Management Strategies

19 EPA Requirements20-21 Tax Tips22 Designing an Internship Program23 Network Date Security Info24 Human Resources25 Construction Equipment Guide - NEDA26-27 Equipment Industry News

ADVERTISER’S:2 Haylor, Freyer & Coon 5 New York Farm Show7 Electronic Merchant Systems15 DiversifiedFinancial17 BallastStar

17 Charter Software29 Federated Insurance30 Fastline Publications

wha

t’s

new

?



John continues to be active in his church, community at large and the local fire district.



ADVERTISER’S:Haylor, Freyer & CoonNew York Farm ShowElectronic Merchant SystemsDiversifiedFinancialBallastStar

Charter SoftwareFederated InsuranceFastline Publications



benefit packages the association offers all its dealer members.

DEALER Northeast

The Newsletter of NoRThEAsT EquipmENT DEALERs AssociATioN, iNc.

FEBRUARY 2015 c Vol. 17, No. 191

www.ne-equip.com



you and your industry association.

Happy New Year...Here are a few reasons for lifestyle equipment dealer optimism in 2015.

The U.S. economy is improving and many people have disposable money to spend because of the

stronger job market and lower gas prices.

Interest rates are expected to remain low and consumer sentiments the highest it has been since

January 2007. OPE Manufacturers and most other OPE Industry leaders are saying that they are very

optimistic for about a 4% increase in sales growth for 2015.

The International October 2014 GIE-EXPO in Louisville,

KY for the OPE Industry was a real winner and drew about

11% more OPE dealers than the previous year. Tim Wentz

and Ralph Gaiss were there from our association manning a

shared booth with our partner the Ohio-Michigan Equipment

Dealers Association. Ralph said he and Tim saw and spoke

with more member dealers than in previous years.

They also spoke with many non-member dealers that stopped

at the booth and they did get three new member dealers to

join the association during the show and when they returned,

they received calls from other dealers that had an interest to

join. If you never attended this fantastic show for dealers only,

don't miss this opportunity on October 21, 22, 23, & 24, 2015

and mark it on your calendar now...so you don't forget it.

IN THIS ISSUE:3 Observations from the Field

4 Annual / Regional Meeting Speakers

6, 8, 10, 12 Industry News

7 Annual / Regional Meeting Sponsors

9 NEDA February Light Specials

11 TwoGreySuits – HR Policies

14 Accomplishing Results

15 Grounds Maintenance Equip. Blue Book

16 OSHA Updates to Recordkeeping Rule

18 Risk Management Strategies

20, 22 Veterans' Information

23 Health Care Information

25 The Family Board in a Family-Owned

Business

26 NEDA Holiday Schedule

27 Equipment Industry News

28 Marijuana in the Workplace

ADVERTISER’S:2 Haylor, Freyer & Coon

5 New York Farm Show

13 BallastStar

13 Charter Software

17 Electronic Merchant Systems

17 PartnerShip

21 SouthWestern Assoc. – Valuations

29 Federated Insurance

30 Fastline Publications

opE Dealer council The OPE Voice of NEDA

COUNCIL MEMBERS

Dale Magie, Chairman, Liberty Twp., OH

Dale Fronheiser, Bechtelsville, PA

Dan Huff, Pomfret Center, CT

OPERATING STAFF

Kim Rominger Bill Garling

Dennis Alford Dave Close

Ralph Gaiss Tim Wentz

Scott Grigor

NEDA ... Northeast Equipment Dealer Association

(CT, MA, ME, NH, NJ, NY, PA, RI, VT)

IS something newsworthy happening or HAS it happened with you, an employee or your dealership?LET US KNOW! Email us a brief note or send us a newspaper clipping (or link) to your local newspaper. A few minutes is all it takes. We welcome digital submissions, just be sure to include your company name, address, phone/fax, email and web info as well as identification of anyone included in a photo.

WHAT’S NEWSWORTHY?anniversaries • awards of special recognition • expansion or remodeling • open houses • receptions • personnel changes • promotions • retirements • in memoriams • new programs, standards or services • anything else you think we’d be interested in publicizing.

EMAIL [email protected] by the 20th of the month forinclusion in the next month’s newsletter.



NYSMTA has previously reported on efforts by the state of New Jersey to force carriers who travel in the state to pay corporate taxes. Several members of the Maryland Motor Truck Association recently reported that New Jersey has resumed its efforts, which may result in New York trucks being held hostage road-side. In light of this, NYSMTA felt it was important to remind New York carriers of the New Jersey law: All companies that make a single drop-off or pick-up at any New Jersey location are required to register with the Division of Taxation for payment of corpo-rate taxes. Carriers who are not properly registered and pay-ing the taxes are having their trucks held until pay-ment is made. When a company has not registered, the division often issues an assessment that is signifi-cantly greater than the actual amount of money the carrier owes. In some cases those assessments have exceeded $10,000. Stoppages may occur at weigh stations, rest areas, truck stops, or even customers' docks. Although New Jersey's actions are extreme, they are legal. Any com-pany making even a single pickup or delivery in New

Jersey- even if they have no physical location in the state- must register with the New Jersey Division of Taxation and pay the Corporate Business Tax. For an overview of the tax, see: http://www.state.nj.us/trea-sury/taxation/corp_over.shtml New Jersey also has a voluntary disclosure pro-gram, which limits the look-back period and penalties for those that have not been paying, but have been delivering in the state. For more information about the voluntary disclosure program, see http://www.state.nj.us/treasury/ taxation/voldisc.shtml It is recommended that carriers consult their tax advisors to discuss amending their New York tax re-turns because payments made to New Jerseymay lower New York tax liability. ~ Courtesy MMTA

New Jersey holding Out of state trucks hostage


BY JOHN CHAPIN

NO, YOU DIDN’T LOSE YOUR LARgEST ACCOUNT BEcausE OF pRicE

This past week an insurance agency called me for help because they just lost their largest account that they’ve had for the past 24 years. When I asked how that happened, the clear, confident response was, “Price!” The only piece of good news I could glean from this initial exchange was that my gag reflex is working perfectly.

iF yOu thiNK yOu lOst yOuR GREat, lONG-tERM custOMER BasED upON pRicE… First, understand that people don’t change for the sake of changing……especially if they’ve been with you for a substantial amount of time. The only way a long-term customer will change is if they see significant pain to staying with you coupled with significant benefit to moving. You blew it somewhere. Some-where, you dropped the ball related to the relationship, val-ue, or both. Possible solution: You have to get into that account and do anything to save it. In the process, find out why you lost it and start to correct the problem in the accounts you still have left. second, understand that if someone’s price is significantly better than yours, there’s a reason that you’d better make clear to the customer because they are in danger. There is simply no way someone can deliver a superior product, superior service, and a much lower price. If someone is 33% cheaper (use this word when referring to the competi-tion) than you, as was the case with the insurance company, you are selling apples and they are selling oranges. There are holes in the policy that can hurt them. Possible solution: You need to get in there and scare the Bejesus out of them. You have to raise doubt that they are getting what they expected. For example, with an insurance policy, you have to show them where the possible holes are and where they might be exposed. Note: The above assumes you still have a strong enough relationship and they still like and trust you. If they trust (be-lieve) you, and like you (aren’t changing out or spite), you can raise that shadow of a doubt and that is your objective here. third, you didn’t lose this customer overnight. it’s probably been over a series of years. Solution: You need to make some changes, most likely significant ones, to how you deliver value and build long-term relationships.

hOw tO EliMiNatE yOuR “pRicE” pROBlEM step 1: accept that only about 7% of people buy primarily on price. Until you accept this fact, you’ll never be able to overcome the price problem. And no, your market isn’t different and the people you’re dealing with aren’t dif-ferent. This is another excuse I hear weekly and in each and every case I’ve ever encountered, the top performing compa-

nies and salespeople are always selling more expensive prod-ucts to the people who supposedly buy on price. Think about it. How many things do you buy solely on the fact that they are the lowest price? Do you buy your fiancé the cheapest diamond? Do you send your kids to the cheapest schools? Do you invest in the cheapest cancer treatment for your loved one? These are extreme examples but they highlight the point that if you’re like most people, the lowest price scares you. Dad was right, “you get what you pay for.” If you truly believe people buy on price, you don’t have a price problem; you have a mindset and a sales problem. “Price” is simply an easy, throw-away excuse to justify hang-ing out in your comfort zone and being mediocre while si-multaneously avoiding the hard work and pain necessary for salvation. There’s pain in letting go of an old belief. The amount of work it takes to build sales skills, adjust mindset, and admit you’re wrong, is immense and the reality is: most people won’t do it. They will simply hide behind the price excuse and whine that their situation is different. It isn’t. And the faster you accept that reality, the faster you’ll begin to turn things around. step 2: Realize that selling on price is the surest way to go out of business. There can only be one low-price provider. If you are it today, you won’t be it tomorrow or when your customer is shopping the next time. There will always be someone willing to sell something cheaper and, in some cases, even give it away. Low price cheapens the marketplace and destroys loyalty, trust, credibility, and rela-tionships. Competing on price will ensure both you and your business live a shorter, more painful life. Solution: Get great at building relationships and value. This is going to take some work, but it will be worth it. Look, is price important? Yes. Is it the most important? In 93% of the cases no. It’s funny that any time the subject of relation-ships comes up and I ask how important they are in the over-all sales and business process, I usually get the answer that they are the most important part. When I later ask the same person why they didn’t get the business, they say “price.” At the end of the day, whatever you believe to be true, will be true. While I can show you over and over again study after study that show that only 7% of people buy primarily on price, you won’t believe what you see; you’ll see what you believe. As we all know, the first sale is to yourself. If you don’t believe in your product and the price you’re asking for it, you either need to find that belief or leave your company and go work for the low-cost provider. Either way, if you’re going to survive long-term, feel good about yourself, and ultimately thrive in the market place, you have to let go of the price excuse and learn to sell value and relationships. John Chapin is a sales and motivational speaker and trainer. For his free newsletter, go to: www.completeselling.com John has over 27 years of sales experience as a number one sales rep and is the author of the 2010 sales book of the year: Sales Encyclopedia. Contact John at 508-243-7359 or email: [email protected].

CREDIT CARD PROGRAMEMS (ELECTRONIC MERCHANT SYSTEMS)Steven Miller866-367-1818, Direct 585-285-9954F: [email protected]

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HAYLOR, FREYER & COON, INC.Health Insurance Program Lauren Marecek Mgr., group Benefit Consulting315-703-3215/800-289-1501, [email protected] • www.haylor.com Jim McGarvey Supervisor Benefit Consulting 315 703 3239 • [email protected]

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previous position that indicates you will thrive in this position.Past performance is usually the best indicator of future success.

If the candidate can't point to a prior accomplishment, they are unlikely to be able to accomplish much at our organization--or yours.

11. so, what's your story?This inane question immediately puts an interviewee on the de-

fensive because there is no right answer or wrong answer. But there is an answer.

It's a question that asks for a creative response. It's an invitation to the candidate to play the game and see where it goes without wor-rying about the right answer. By playing along, it tells me a lot about the character, imagination, and inventiveness of the person.The question, as obtuse as it might sound to the interviewee, is the beginning of a story and in today's world of selling oneself, or one's company, it's the ability to tell a story and create a feeling that sells the brand--whether it's a product or a person.

The way they look at me when the question is asked also tells me something about their likeability. If they act defensive, look uncomfort-able, and pause longer than a few seconds, it tells me they probably take things too literally and are not broad thinkers. In our business we need broad thinkers.

12. what questions do you have for me?I love asking this question really early in the interview--it shows

Difficult Questions CEOs Ask continued from page 20

me whether the candidate can think quickly on their feet, and also reveals their level of preparation and strategic thinking.I often find you can learn more about a person based on the questions they ask versus the answers they give.

13. tell us about a time when things didn't go the way you wanted -- like a promotion you wanted and didn't get, or a project that didn't turn out how you had hoped.

It's a simple question that says so much. Candidates may say they understand the importance of working as a team but that doesn't mean they actually know how to work as a team. We need self-starters that will view their position as a partnership.

Answers tend to fall into three basic categories: 1) blame 2) self-deprecation, or 3) opportunity for growth.

Our company requires focused employees willing to wear many hats and sometimes go above and beyond the job description, so I want team players with the right attitude and approach. If the candi-date points fingers, blames, goes negative on former employers, com-municates with a sense of entitlement, or speaks in terms of their role as an individual as opposed to their position as a partnership, he or she won't do well here.

But if they take responsibility and are eager to put what they have learned to work, they will thrive in our meritocracy.

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EquipMENt iNDustRy NEws

Rabobank doesn’t see sales of ag equipment picking up until possibly 2018. In the meantime, one of agriculture’s largest lending institutions thinks the time could be right for some of the bigger farm machinery manufacturers to get together to challenge market leader John Deere.

The report authors conclude, “It seems logical that a strategic transaction among this peer group could occur in order to create a more formidable challenger to the market leader.”

~ AEI

manufacturers see Little change in 2016 Ag Equipment sales

Results from a revised Quarterly North American Agricultural Equipment Industry Trends survey from the Assn. of Equipment Manufacturers, indicate equipment makers are reporting similar outlooks for equipment sales for the coming year as their dealer counterparts.

~ AEI

Rabobank sees slow Ag Recovery; potential manufacturer consolidation

4 Ag Equipment Intelligence/October/2015

Results from a revised Quarterly North American Agricultural Equipment Industry Trends survey from the Assn. of Equipment Manufacturers, indicate equipment makers are reporting simi-lar outlooks for equipment sales for the coming year as their dealer coun-terparts (see the story on page 1 of this newsletter).

AEM reports that manufacturers expect sales of large equipment, includ-ing harvesting, to continue at a sluggish pace in the next 12 months. Sales of equipment aimed at the livestock mar-ket, which was strong in the past year, are also expected to slow due to the drop in milk prices. Survey participants expect lawn and garden equipment and tractors to be up by 1-5% in 2016, with the outlook for tractors likely driv-en by low horsepower models.

Manufacturers expect loaders and material handlers to see increases of 6-10% and trailers and transportation equipment to be up 10-15%, making this category the best bet for improv-ing sales in the year ahead.

Components and attachments are largely expected to increase across the board as well, except for harvest-ing, tillage, seeding, fertilizing and planting equipment.

Equipment Demand Analysis. AEM’s survey also asked manufactur-ers to gauge demand, looking at new orders, production and work backlog in the second quarter of 2015 vs. the year before. Nearly 60% of manu-facturers surveyed say new orders for both ag wholegoods and compo-nents/attachments have fallen. About 42% of manufacturers reported flat to rising wholegoods production and

37% say production of ag compo-nents/attachments is flat or increas-ing vs. the same time last year.

Work backlog of ag components/attachments is reported to have fallen by almost 78% year-over-year, while roughly 42% of manufacturers say work backlog of wholegoods has stayed the same. “The backlog seems to be more stable within the wholegoods seg-ment, hinting at a faster adjustment to the current situation. Next quarter, we

would expect the backlog for compo-nents/attachments to become more stable,” says the AEM report.

Export & Import Trends. AEM reports exports and imports of U.S.-made farm equipment declined in the second quarter, which marks the sixth consecutive quarter that U.S. trade has experienced year-over-year declines.

While Central America, Asia and

Manufacturers See Little Change in 2016 Ag Equipment Sales

U.S. Ag Equipment Export/Import TrendsExports Imports

World Area 2Q 2015 % Change Q/Q % Change Y/Y 2Q 2015 % Change Q/Q % Change Y/Y

North America $687,249,977 18.1% –19.3% $221,856,012 –22.3% –29.9%

Central America $280,839,719 2.8% 3.6% $163,119,783 5.4% –24.6%

South America $180,321,192 –4.0 –37.5% $11,698,309 10.1% –21.4%

Europe $421,521,342 2.7% –27.7% $912,017,945 9.8% –13.4

Asia $324,522,180 82.4% 18.0% $742,995,156 7.0% 9.5%

Australia and Oceania $234,187,728 94.0% 8.0% $17,948,970 –23.0% –41.8%

Africa $65,106,919 –2.9% –33.0% $655,176 –8.1% 1.1%

Total $2,193,749,057 20.6% –15.1% $2,070,291,351 3.5% –10.4%

...Continued on page 5

Manufacturers’ Equipment Outlook Next 12 Months (as of 2Q 2015)

Equipment Type Ag Wholegoods Components/Attachments

Harvesting Equipment Down 1-5% Down 1-5%

Irrigation & Sprayers Stable Up 6-10%

Lawn/Garden Equipment Up 1-5% Up 6-10%

Livestock Equipment Down 1-5% Up 6-10%

Loaders/Materials Handlers Up 6-10% Up 1-5%

Tillage, Seeding, Fertilizing, Planting Stable Down 1-5%

Tractors Up 1-5% Up 1-5%

Trailers/Transportation Equipment Up 10-15% Up 1-5%

Other — Up 1-5%

Source: Assn. Equipment Manufacturers, Ag Executive Advisor

Manufacturers’ Equipment Demand Analysis 2Q 2015 vs. 2Q 2014

Ag Wholegoods Falling Roughly the Same Rising

New Orders 58.4% 8.3% 33.3%

Production 50.0% 8.3% 41.7%

Work Backlog 41.7% 41.7% 16.6%

Components/Attachments Falling Roughly the Same Rising

New Orders 63.0% 25.9% 11.1%

Production 55.6% 33.3% 11.1%

Work Backlog 77.8% 18.5% 3.7%

Source: Assn. Equipment Manufacturers, Ag Executive Advisor

Ag Equipment Intelligence/October/2015 5

Australia/Oceania recorded growth in exports year-over-year, North America, Europe and South America all con-tinued to see declines. Total exports of U.S. ag equipment experienced a 15.1% decline compared to the sec-ond quarter of 2014.

Total imports of U.S.-made ag equipment declined 10.4% year-over-year, though Asia and Africa

both saw growth. AEM reports, “As the dollar contin-

ues to remain strong in the interna-tional markets, U.S. companies will continue to be at a competitive disad-vantage.” The association also says that it should be interesting to see what effect the Chinese currency devalua-tion will have in the third quarter.

AEM cites a report from the

Agrievolution Alliance, which indicat-ed that the global business climate is expected to improve in the next 6 months. Asian markets are currently seeing growth, and while exports have decreased in the U.S., the domestic market is moving in the direction of small equipment, including lawn and garden products, which have helped it remain more positive.

Manufacturers See Little Change for 2016 Ag Equipment Sales Continued from page 4

Rabobank doesn’t see sales of ag equipment picking up until possibly 2018. In the meantime, one of agri-culture’s largest lending institutions thinks the time could be right for some of the bigger farm machinery manufacturers to get together to chal-lenge market leader John Deere.

According to the September 2015 report, “Contraction Today, Consolidation Tomorrow? Looking beyond the Downturn in North American Farm Equipment,” the ag lender concludes that the downturn in farm equipment sales that has car-ried over into 2015 “is unlikely to abate for some time.”

The report, authored by Ken Zuckerberg and Harry Smit, con-tends that despite recent sales uptick for small tractors, “the overall operat-ing environment for OEMs of farm equipment and machinery remains quite ominous.” The ag lender proj-ects “North American revenues derived from the sales of tractors and combines will likely fall by 25%

in 2015, 10% in 2016 and 2.5% in 2017, with the inflection point for positive growth of about 5% occur-ring in 2018.”

The current oversupply of used equipment must be worked down before dealers will increase their deliv-ery of new equipment from the OEMs.

According to the Rabobank researchers, the current downturn could set the stage for “disciplined competitors to consider strategic mergers ad acquisitions that will grow market share, diversify product offerings, enter adjacent markets and expand in higher growth regions.”

In citing the potential for consolida-tion by equipment OEMs, the report cites recent merger and acquisition activity within the farm input sub-sector of agriculture. These include Monsanto’s bid for Syngenta, FMC’s acquisition of Cheminova and the recent merger agreement between CF Industries and OCI.

In 2014, it is estimated that farm equipment was a $114 billion indus-

try, with $26 billion of this coming from sales in North America. Revenue and unit sales growth was 9.9% and 5.8%, respectively from 2010-2014. Even at this size, the report says the ag equipment sector is still second to the global farm inputs sector, which is dominated by fertilizer at $175 billion is sales in 2013.

The 6 largest global equipment players based on 2014 ag equip-ment revenue are Deere & Co., CNH Industrial and AGCO, closely followed by Kubota, Claas and Mahindra. In terms of relative size and market share, the report points out that, when it comes to total revenue, Deere and CNH are similar in size. But when only ag sales are considered, Deere’s business segment is 40% larg-er. Deere is also 2.5 times larger than Kubota and AGCO.

The report authors conclude, “It seems logical that a strategic transaction among this peer group could occur in order to create a more formidable chal-lenger to the market leader.”

Rabobank Sees Slow Ag Recovery; Potential Manufacturer Consolidation

Tier 1 OEMs — Ranked by 2014 Revenue

When considering agriculture sales, Deere’s sales are 40% larger than CNH and 2.5 time larger than that of Kubota and AGCO.

Source: Bloomberg, company reports, 2015

Rabobank Forecast for Estimated Revenue Growth — 2015e-18f

Rabobank says there is a strong possibility that farm equipment OEMs may not see an uptick in revenue until 2018.

Source: VDMA, Raobank forecast, 2015

Ag Equipment Intelligence/October/2015 5

Australia/Oceania recorded growth in exports year-over-year, North America, Europe and South America all con-tinued to see declines. Total exports of U.S. ag equipment experienced a 15.1% decline compared to the sec-ond quarter of 2014.

Total imports of U.S.-made ag equipment declined 10.4% year-over-year, though Asia and Africa

both saw growth. AEM reports, “As the dollar contin-

ues to remain strong in the interna-tional markets, U.S. companies will continue to be at a competitive disad-vantage.” The association also says that it should be interesting to see what effect the Chinese currency devalua-tion will have in the third quarter.

AEM cites a report from the

Agrievolution Alliance, which indicat-ed that the global business climate is expected to improve in the next 6 months. Asian markets are currently seeing growth, and while exports have decreased in the U.S., the domestic market is moving in the direction of small equipment, including lawn and garden products, which have helped it remain more positive.

Manufacturers See Little Change for 2016 Ag Equipment Sales Continued from page 4

Rabobank doesn’t see sales of ag equipment picking up until possibly 2018. In the meantime, one of agri-culture’s largest lending institutions thinks the time could be right for some of the bigger farm machinery manufacturers to get together to chal-lenge market leader John Deere.

According to the September 2015 report, “Contraction Today, Consolidation Tomorrow? Looking beyond the Downturn in North American Farm Equipment,” the ag lender concludes that the downturn in farm equipment sales that has car-ried over into 2015 “is unlikely to abate for some time.”

The report, authored by Ken Zuckerberg and Harry Smit, con-tends that despite recent sales uptick for small tractors, “the overall operat-ing environment for OEMs of farm equipment and machinery remains quite ominous.” The ag lender proj-ects “North American revenues derived from the sales of tractors and combines will likely fall by 25%

in 2015, 10% in 2016 and 2.5% in 2017, with the inflection point for positive growth of about 5% occur-ring in 2018.”

The current oversupply of used equipment must be worked down before dealers will increase their deliv-ery of new equipment from the OEMs.

According to the Rabobank researchers, the current downturn could set the stage for “disciplined competitors to consider strategic mergers ad acquisitions that will grow market share, diversify product offerings, enter adjacent markets and expand in higher growth regions.”

In citing the potential for consolida-tion by equipment OEMs, the report cites recent merger and acquisition activity within the farm input sub-sector of agriculture. These include Monsanto’s bid for Syngenta, FMC’s acquisition of Cheminova and the recent merger agreement between CF Industries and OCI.

In 2014, it is estimated that farm equipment was a $114 billion indus-

try, with $26 billion of this coming from sales in North America. Revenue and unit sales growth was 9.9% and 5.8%, respectively from 2010-2014. Even at this size, the report says the ag equipment sector is still second to the global farm inputs sector, which is dominated by fertilizer at $175 billion is sales in 2013.

The 6 largest global equipment players based on 2014 ag equip-ment revenue are Deere & Co., CNH Industrial and AGCO, closely followed by Kubota, Claas and Mahindra. In terms of relative size and market share, the report points out that, when it comes to total revenue, Deere and CNH are similar in size. But when only ag sales are considered, Deere’s business segment is 40% larg-er. Deere is also 2.5 times larger than Kubota and AGCO.

The report authors conclude, “It seems logical that a strategic transaction among this peer group could occur in order to create a more formidable chal-lenger to the market leader.”

Rabobank Sees Slow Ag Recovery; Potential Manufacturer Consolidation

Tier 1 OEMs — Ranked by 2014 Revenue

When considering agriculture sales, Deere’s sales are 40% larger than CNH and 2.5 time larger than that of Kubota and AGCO.

Source: Bloomberg, company reports, 2015

Rabobank Forecast for Estimated Revenue Growth — 2015e-18f

Rabobank says there is a strong possibility that farm equipment OEMs may not see an uptick in revenue until 2018.

Source: VDMA, Raobank forecast, 2015

mahindra Buys into mitsubishi’s Ag Equipment Business

Mahindra & Mahindra, one of India’s leading farm equipment manufacturers, has completed a $25 million investment in Mitsubishi’s compact tractor and rice cultivation equipment operations in Japan.

Under the deal, announced earlier this year, M&M acquired a 33.3% stock holding in the business, which remains majority owned by Mitsubishi Heavy Industries, a wide-ranging industrial group.

Mahindra claims to be the world’s biggest producer of tractors by volume; through organic growth and acquisitions in India and China, annual unit sales have increased from 85,000 in 2005 to a peak of more than 268,000 in 2013.

~ AEI



Equipment Dealers Expect Another slow Year While more dealers are expecting new equipment sales to be as good or better in 2016 than they were in 2015, 39.7% of dealers expecting flat equipment sales isn’t necessarily optimistic when sales are already low. Of the 282 North American farm equipment dealers who responded to Ag Equipment Intelligence’s 2016 Dealer Business Outlook & Trends survey, nearly 57% expect sales of new machines to be as good or better than they were in 2015. This compares to 50% expressing the same sentiments a year ago. Rounding out the top 5 products expected to be most lucrative in 2016 are 2WD tractors under 40 horsepower, 2WD tractors between 40-100 horsepower and mower/conditioners. These three categories each had more than 23% of dealers expecting to see gains in the coming year

~ AEI

Kubota corp. 2q Revenues Rise 14.2%; continues to Expand operations in Big Ag Worldwide Kubota Corp.’s continued expansion into big ag equipment and higher horsepower tractors and its increased activity in Asia were reflected in significant gains during the 3 months ended June 30, 2015. Kubota reported its earnings on Aug. 5 with revenues up 14.2% year-over-year to almost $3.5 billion. Domestic revenues increased 5% to $974.73 million and overseas revenues for the company saw gains of 18.4% to almost $2.5 bil¬lion. Overseas revenues also increased to 71.4% of total revenues from 69.1% the year prior. In his assessment of Kubota’s progress, Peter Hill, Ag Equipment Intelligence’s European correspondent, says this is “another symbolic step toward the goal of expanding Kubota’s presence beyond its traditional markets and, over the next 3 years, lifting revenues from today’s $13 billion toward a target of more than $16.8 billion.”

~ AEI

Large Ag sales continue Decline North American large Ag equipment sales declines continued in September. According to the latest unit sales figures released by the Assn. of Equipment Manufacturers, 4WD tractor sales are down 48.6% year-over-year (down 54.7% last month), combine sales fell 25.6% (down 28.1% last month), and row-crop tractor sales decreased 40.4% (down 30.9% last month). Mid-range tractor sales decreased 12.5% from the same time last year following a 5.6% decrease last month. Compact tractor sales decreased 4.7% year-over-year.

~ AEI

October 15, 2015Vol. 21, Issue 10

• OEM Consolidation?

• Mahindra & Mitsubishi

• Mfr. Sales Outlook

While more dealers are expecting new equipment sales to be as good or better in 2016 than they were in 2015, 39.7% of dealers expecting flat equipment sales isn’t necessarily opti-mistic when sales are already low.

Of the 282 North American farm equipment dealers who responded to Ag Equipment Intelligence’s 2016 Dealer Business Outlook & Trends sur-vey, nearly 57% expect sales of new machines to be as good or better than they were in 2015. This compares to 50% expressing the same sentiments a year ago.

At the same time, only 17.2% expect an actual increase in sales of new

Equipment Dealers Expect Another Slow Year

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Individual companies reported on and analyzed by Lessiter Media Inc., may be clients of this and other Lessiter Media services. This information is not furnished in connection with a sale or offer to sell securities or in connection with the solicitation of an offer to buy securities.

A new range of Kohler engines will make its debut as a tractor power unit when Chinese farm machinery giant Foton Lovol launches a new range for Western markets at the Agritechnica show in Germany next month. A his-torical Italian brand once owned by White is being revived to support the launch, which will also include combines, precision seed drills and cultivation equipment.

Reviving the “Arbos” brand is a key stage in a project begun by Foton Lovol International Heavy Industries Co. in 2011 when it set up a European R&D center near Bologna in Italy to design a new range of tractors.

Until now, Foton Lovol sales in North America and Europe have been limited to a handful of mainly small utility tractors marketed under a vari-ety of names. In the U.S., Liberty Eagle

Enterprises LLC, Liberty, Ky., supplies 25-90 engine horsepower tractors under the Eagle brand.

Tightening emissions rules and a desire to increase sales in Western mar-kets is behind the new more advanced tractor range, which is expected to span 100-130 horsepower.

Last month, Foton Lovol senior executives attended a ribbon-cutting ceremony to launch Lovol Arbos Group SpA, a new holding company to coordinate the Chinese group’s activities in Europe. Its managing director, Andrea Bedosti, has worked in commercial sales with Argo Tractors, telehandler maker Merlo and Same Deutz-Fahr Group.

Since taking on the role early last year, Bedosti has negotiated Foton Lovol’s acquisition of MaterMacc, an Italian manufacturer of seed

drills, precision seeders and culti-vation equipment (Ag Equipment Intelligence, April 2015) and the trademarks and surviving records of the Arbos-Bubba combine har-vester company. White acquired this business in 1964 but it returned to European ownership in 1976 before it closed down entirely in 1994.

Although Foton Lovol makes its own 4 and 6 cylinder engines derived from a joint venture with Perkins Engine Co., which ended in 2007, they do not meet Western market emissions rules.

Kohler’s 3.35-liter 4 cylinder engine, which will top out at 134 horsepower in the forthcoming trac-tors, is part of the new Kohler KDI family built at the U.S. company’s Lombardini manufacturing plant in

Foton Lovol Eyes Western Markets in Deal for Kohler Engines

Continued on page 8

Continued on page 2

North American Dealers’ Outlook for New Equipment Revenue2016 vs. 2015

On a weighted average basis, ag equipment dealers are slightly more optimistic about 2016 than they were about 2015. But with only 17% of dealers expecting a revenue boost, optimism may not accurately portray dealer sentiments for 2016.

-8% or More22.5%

-2-7% 20.6% Flat

39.7%

+2-7% 14.2%

+8% or More3.0%

2016

-8% or More22.4%

-2-7% 27.6%

+8% or More3.2%

2015

Flat 30.7%

+2-7% 16.1%

8 Ag Equipment Intelligence/October/2015

equipment by 2% or more in 2016. This compares to 19.3% of dealers who forecasted increased sales of 2% or more in 2015.

Last year, half of all dealers respond-ing to the survey projected sales to drop from 2% to more than 8% throughout 2015. This year, 43.1% of dealers are forecasting declining rev-enue from sales of new equipment.

But, as previously mentioned, just because fewer dealers are forecast-ing declines doesn’t necessarily mean dealers are more optimistic about sales of new farm equipment. When all is said and done, 2016 could possibly be one of the more challenging sales years for new farm equipment in the last decade, especially for high horse-power tractors and combines. Just over 37% of dealers surveyed expect a decline in sales of row-crop tractors and 50% expect combine sales to fall.

For used equipment, 60.6% of deal-ers are forecasting flat to positive sales for 2016, down from the 66.6% of deal-ers expecting the same in 2015. The number of dealers expecting an uptick of 2% or more in revenue from used equipment increased slightly from 25.7% to 25.8% this year. More dealers also were expecting declines in rev-enue from used equipment this year compared to the 2015 survey, 39.4% compared to 33.4% last year.

Used Equipment Inventory. The most obvious cause for the down-turn in new farm equipment sales is low commodity prices, which deal-ers listed as their number one con-cern for 2016. According to USDA, prices farmers received for corn in the first 7 months of 2015 have been down 16% from a year earlier, and down 44% compared to July 2013. Soybean and wheat prices are even worse off at down 24% and 15% year-over-year respectively.

Besides commodity prices, deal-ers are also facing a backlog of low hour, high priced used equipment sitting on their lots. Of dealers surveyed, 88.8% say they are “con-cerned” or “most concerned” about current used equipment inventory.

Responding to a blog on the invest-ment research website Seeing Alpha that took the position that Deere & Co.’s bubble had finally burst because

of low commodity prices, one analyst wrote: “Used inventory on dealers’ lots has slowed new sales more than commodity prices. Farmers bought too much new inventory [the] last few years and now [the] market [is] flooded with late model equipment ... might take 2 more years to reduce this surplus.”

On the question of “How would you currently rate your used equipment inventory?” 49.5% of dealers replied that it was “too high” or “way too high.” A little over 42% said it was “about as expected,” and 8.3% reported they “need more used equipment.”

Best Bets for Equipment. For 2016, dealers say equip-ment related to the rural life-style, light construction and precision farming markets are at the top of their list as those holding the most potential to grow unit sales.

Claiming the top position as dealers’ number one best bet for equipment sales in 2016 are lawn and garden products, with almost 40% of dealers expecting this area to see growth of 2% or more. This reflects the improv-ing residential construction and non-residential building markets, which were up 16% and 20% year-over-year respectively.

Up from the #8 position on dealers’ lists last year is GPS and precision farming equipment, which came in at #2 with 30.7%

of dealers expecting to see increases of 2% or more in this category.

Rounding out the top 5 products expected to be most lucrative in 2016 are 2WD tractors under 40 horse-power, 2WD tractors between 40-100 horsepower and mower/conditioners. These three categories each had more than 23% of dealers expecting to see gains in the coming year.

Equipment Dealers Expect Another Slow Year... Continued from page 1

Dealers’ Outlook for Used Equipment Revenue2016 vs. 2015

The percentage of dealers expecting an increase in revenue from used machinery sales in 2016 is on the same level as a year ago (25.8% vs. 25.7%), the bigger change is in the dealers projecting decreased sales — 39.5% in 2016 vs. 33.4% last year.

-8% or More23.8%

-2-7% 15.6%

Flat34.8%

+2-7% 19.2%

+8% or More6.6%

2016

-8% or More13.5%

-2-7% 19.9%

+8% or More4.0%

2015

Flat 40.9%

+2-7% 21.7%

Best Bets for Improving Unit Sales

(North America)

Equipment Category 2016 Rank

2015 Rank

Lawn/Garden Equipment 39.6% 1 2

GPS/Precision Farming 30.7% 2 8

2WD Tractors (<40 HP) 28.7% 3 5

2WD Tractors (40-100 HP) 25.8% 4 9

Mower/Conditioners 23.8% 5 3

Round Balers 22.0% 6 8

4WD Tractors (All) 20.1% 7 19

2WD Tractors (>100 HP) 19.6% 8 17

Farm Loaders 18.9% 9 10

Rectangular Balers 16.8% 10 6

Windrowers/Swathers 15.3% 11 4

Self-Propelled Sprayers 12.9% 12 16

Air Seeders/Drills 12.0% 13 15

Disc Harrows 12.0% 14 14

Feeders/Mixers 10.7% 15 1

Planters (All) 10.4% 16 18

Chisel Plows 9.5% 17 12

Field Cultivators 8.8% 18 13

Pull-Type Sprayers 8.0% 19 11

Forage Harvesters 7.5% 20 7

Combines 7.3% 21 20

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