The Business of Makeovers

December 17, 2004—Used and abused, rebuilding aerial work platforms is good business. (Although, the same cannot be said for cranes and telehandlers; their more robust designs, types of applications, and level of operator competency contribute to less of a need for being rebuilt.) The four largest North American AWP manufacturers (JLG, Genie, Skyjack, and Snorkel) have all made large investments in this expanding enterprise. My personal observation leads me to believe the rebuilding business may have already exceeded $100 million per year in revenue.

We'll be taking up the issue of “rebuilding” aerial work platforms in the second issue of our new print publication, Lift and Access, which mails in early January. Our research has revealed that there are really two distinct markets emerging on this front.

The first is the practice of rebuilding a piece of equipment on speculation—that is adding value to the machine then remarketing it. JLG is the king of this marketing method. In the early 1990s the company opened its Equipment Services division when they realized the need for remanufactured equipment. The endeavor not only opened new markets to the company, but it also buoyed the value of existing JLG equipment. JLG is the only AWP producer to provide what they call “remanufactured” machines. Setting this process apart from other equipment makeovers is that remanufactured equipment must meet current ANSI standards. Other re-build providers resell used equipment, but typically these machines are taken in on trade or are lease returns. This equipment then receives varying levels of work to make them re-marketable.

The second, and more rapidly growing, market is contract rebuilding. In this scenario, the owner of a machine contracts with one of the manufacturers or a handful of independent providers, to rebuild or recondition the equipment and return it to them. The type and amount of work to be performed is usually determined in advance.

As this market struggles to identify itself, there has yet to be any common standards set for the delivery of these services. A variety of terms are used, making it difficult to sort out what services will be provided. What one company calls “rebuilding,” another may label “reconditioning” or “refurbishing”. Essentially, they may all mean the same thing, but because the rebuilding business is a fairly recent development, there are really no standards to use as guidelines. As the market defines itself, the semantics will sort itself out, but until then buyers and sellers need to be careful with how terms are used.

Whether you're buying remanufactured, rebuilt, reconditioned, or refurbished equipment, make sure you know exactly what the service provider intends to deliver. While it may not make the cut as the next reality TV concept, it's certainly an issue to keep your eye on. For more guidance on this subject and a review of the services provided by JLG, Genie, Skyjack, and Snorkel, watch for the January-February issue of Lift and Access. (If you're not a current subscriber, sign up today for free at www.liftandaccess.com.)