Steve Day and Ron focus on the experiences that Steve had working at a manufacturer and a dealer in the construction equipment world.

Sure, sure. I think to start, I think there's no two distributors or at least no two regional parts of the country that the pandemic affected the same way. I have friends up in the Northeast that It shut their business down for a period of time. And they ended up having to lay off employees for a while to drastically cut back their hours. And some of the same types of things I think occurred in the Northwest and also in parts of the Midwest. The South, we had to modify how we did business, but it never really shut the distribution down. So I think everybody's coming back. to it from a different place. Um, but we all, uh, were impacted by it. And, um, you know, I was surprised some dealers had great years, despite the fact that there was a pandemic and, and others, uh, had some real struggles, but, um, you know, we're, we're all entering this conversation, I think at a different, at a different point. So I see, uh, um, the Southern dealers might've had to, pull back their PSSRs a little bit, the product sport salespeople, although they were still calling and maybe doing delivery. They weren't necessarily doing face-to-face selling so much, or they might've been taking parts out to a customer's truck as opposed to having them come into the counter. But they were still pretty much business as usual. I think the biggest thing we're going to be seeing is pretty significant uptick in the business and how do we get ready for that? And the fact that we can now be face-to-face with our customers and with our own employees more than we might have been. So for example, I know, I don't know any dealer that was doing face-to-face training during this of their technicians and that needs to come back. And I think some folks are jumping into that. People are finding it hard to get employees right now, making decisions on how to bring some employees back to work. Our business, I think, is a little bit different, Ron, don't you think, than others in that we have so much customer contact that maybe not so many departments. were not coming into the office. Maybe some accounting and admin people got to stay home, and that might be an opportunity going forward. But our counter people were on the counter. Our warehouse people were in the warehouse. Our technicians were in the shop, and they were certainly out in the fields.

Yeah, of course, I retired and then that happened. They're saying there's a direct correlation to that. But I've talked to a number of Southern distributors that had really good years, whether it was in Texas or in Florida or Tennessee, wherever. They had good years. And it was all about maintaining the customer contact, whether you were in their face or not, the fact that you were talking to them a lot. And I see a couple of things coming down the road right now. One, we have that are really positive. One, we have the potential for an outstanding infrastructure package to be delivered from the government, bordering on a trillion dollars. If that happens, that certainly is going to make the aggregate business extremely strong. And the road building and the paving business are going to get really strong. And that demand for both equipment and for product support is going to be big. Are we going to have the technicians to take care of those customers as they all ramp up and come back to work in a big way? I don't think you ever really lose your technicians to your customers. because your price was too high. I think you lose your technicians to your customers because you couldn't get to them fast enough. And a cost to a customer is being down, not what they paid on the invoice per se, unless they waited three weeks to pay that. So how are we going to get to them fast enough to keep them from wanting to hire our people is going to be a big deal.

Well, that's part A. You have to make sure. The guys you have are properly trained, so they don't want to leave you. And you're absolutely correct. We see, well, in the past, I would see a technician that would leave. And that was a, we considered that a real crisis at our company. The first time I ever got yelled at by my boss was when a 25-year. technician left and he came in most upset by that. And I, you know, I wasn't quite as upset as he wanted me to be. And in the end, and I'm cleaning this way up, he said, you know how long it takes to, to get a 25 year technician. And I said, well, and he said, rather emphatically 25 years. Yeah. You know, so you don't want to lose those guys and the things you do to hang on to them are critically important. But when you did lose them, what you found out was that that customer was calling you within two years to get technical help. Yep. Because that guy in two years had lost, had you been training properly, had lost enough up-to-dateness, if you will. And then on top of that. You know, the computers we give our technicians today have a whole lot of information and download software that's not necessarily available to an end user. So a technician, most of them, technicians are pretty bright guys by their very nature. Most of them have figured out unless there's a big reason to go, their best deal should be with their... manufacturer representatives.

Nobody's helped more than the EPA.

Absolutely.

You know you have a great tech and you know you have a problem.

there's a number of dealers now. that have gone back to that apprentice program. My prior employer's done that. They have at least two apprentice classes going on all the time, which we have between eight and 10 people in it. And they have a program for the paving lines that goes through a technical school. So that to me is ultimately how you, and I know, you know. General Equipment's been a big promoter up in the Dakotas of the technical schools that are tied into your manufacturer. That's how you get them is you give birth to them. Yeah.

The interesting thing, actually, we do bring them in. You end up getting a fraternity

the guys that were in that class and they call each other. you know, when there's problems. And the other interesting thing that goes on is they go back and they know something that some of the guys in the shop don't know anymore and they start teaching them. And you start seeing a lot of sharing that goes on. So it's a very positive thing. And then on top of the, you know, I have to keep working with your current employees to keep upping their game. I think one of the most important things we can do right now as we come back to work is meet with all of our techs and see where we are in the training cycle. We should know exactly where each one of those guys stands anyway. But we hit the pause button 18 months ago in our development programs with these guys. And so we have... We believed, and smarter guys in the company than I came up with these ideas, but we believed that you kind of took people from three levels. You took the apprentice program and developed a program to bring guys up to a journeyman level, if you will. You take your journeyman and you find out where their requirements or their needs are. They still might be missing. know enough about hydraulics or they may still not know enough about electrical or it may just be where to find something in all the manufacturers computers. But you have a secondary program where you bring those guys up to the level that you want them at. And then tertiary is grad school, if you will. It's the machine specific things that you do with them and the and the manufacturer training that you can bring on to them. Of course, we were always pretty fortunate that we had two major training centers very close to our, or not everybody gets that lucky to have, you know, the ability to have two manufacturer training centers very close to us.

The, the, the other thing that we, we see we, we, we, we figured out we were wasting a lot of money. training people on things they didn't need to be trained on and training people on things that they weren't ready to learn yet because they didn't have the basic information to build on that. So that's why I was interested in having the ability to assess.

Well, that's another important, how soon you get to use your training makes a big difference on how well it is retained. And so, you know, you suddenly had to start, spending a lot of time deciding, is this guy actually going to be working on that machine? I'm not going to send him there. If he's not going to work on the machine, he won't remember any of this by the time he goes there anyway. And it made for much more efficient training, and I think more appreciated training. And the same thing happened when you assessed your counter guys or your PSSRs. But we came to a conclusion that we had some really good technical counter people, parts people. They could find any parts you might want, but they couldn't find it in their heart to sell you something to save their lives. And we came to the conclusion that it was possible to have competent parts people that were sales oriented. And that made big differences for us. And of course we... We chose to compensate people for what they could do from a sales perspective, which got them even more excited. It was a virtuous circle, if you will. And once again, you got to figure out who you have there. And it made for some difficult. Usually we were able to find places for the people that might not be. a great salesperson, they might go back home and handle strictly the service department. You know, you were able to keep good, loyal employees because sometimes their deficiencies weren't caused by them as much as they were caused by us over a long period of time. But you get, you know, you get the right guys on the bus after pretty quick and it makes an enormous difference.

Of course, you can train people to meet those objections. And the guys you love are the ones that love to get the objection. That's their, you watch a great, whether it's a great counterperson or a great PSSR, they're looking for the objection. And very early in my, I don't want to go too far off, but very early in my career at my distributor. I made sure I was actually sitting very close to the parts counter because I was trying to figure out what was going on. I was a little bit helpless. And I watched what turned out to be our very best counterman. I was lucky. And his favorite question was, where are you going now? He'd finished taking care of what that guy wanted, and then he'd find out where that guy was going. And it would often be to our competitor. What are you going there for? Oh, I got to pick up some filters. I got them. I'm supposed to go over that. He would call the guy's boss and say, I can save you a trip. I can say these. I mean, it might be for two filters, but it was a it was an obsession with him. And at that point, he wasn't even getting compensated for those sales. It just he was that good. Those are the people that you search for.

It's perfect.

Right. You're right.

Well, it's going up.

You know, we're already seeing parts that are hard to get. And to me, you're going to have... particularly in commodity areas. And there are some products, you know, you're going to sell them. It's not like that weird, you know, fitting that, you know, comes up once every five years. This is something that's, I'm okay with having too much of something right now. If I know it's a part I can sell, because I maybe end up being the only guy that has them. And I think we're going to have some serious shortages. I saw a report came out the other day that was estimating $500 billion worth of reshoring over the next 12 months where manufacturers or suppliers that were currently getting product from overseas, we're going to bring that back to the States because of things that are going on with China, with the Suez Canal, all the little bizarre things that are popping up. And as those move back to the United States, there's probably going to be some shortages as things transition. I also think that's going to be a pretty big pull on the labor pools in a lot of markets too. You bring that much manufacturing back into some place. There's some high paying jobs that some of our employees might be interested in. So, but, but I definitely think we're going to have, we're going to see shortages, you know, a plant in Alabama, the Hyundai plants down for 10 days because they can't get computer parts right now. Yeah. And so, you know, that's, that's not going to be the first time we have that happen. And then as one, you know, as we get an infrastructure program going in, you're going to be able to get a paper. You're going to be able to get a, milling machine, you're going to be able to get rollers because it's a heck of a thing to sell something that you can't get. And so I think inventory is going to be a real big factor in the success of distribution right now.

I would think so, yeah. And we already see distribution realignments going on in the industry anyway, driving toward larger distributors and can share rental fleets. So I got to say, you know, there's some positive things on the horizon. I, you know, I decided to retire right before the stock market dumped. And so I'm looking at my portfolio around March of 2020, and it was not looking good. But I always kind of believed in investing in things I actually understood. That's unfortunate in the case of Bitcoins, because I wasn't smart enough to understand that. But I bought some aggregates. the end of March of 2020, some aggregate producers. Well, they're looking pretty good right now because the infrastructure is going to need their product. And I think that's it's the same way with our construction equipment stocks are looking good. Oh, there's a reason for it. People think there's going to be a lot of activity going forward.

Well, our business has a lot of customer facing jobs. My banker was working from home for a long time. My investment guy was working from home for a long time. I think it's pretty easy for accounting departments with systems, at least if you've got some protection in place against hackers, to let people work from home. And so there's opportunities. If we sent people in accounts receivables or accounts payables home and they were getting their job done, You know, that might be a way to hang on to good people or to get them to work an extra year. It certainly is a smarter way to set things up than building new office space. So I definitely think we're going to see some of that. And I think there's some other business opportunities. Do you have online business? Do you have business that is going on because of you have products that you can sell over the Internet? People that run that show can easily work from the house. So I definitely think there's some of those opportunities. On the other hand, you know, mechanics got to show up because unless you have a crane in the backyard, you can't work on a lot of equipment. You know, the warehouse folks have to show up.

I love them. We had two that were fairly close to other stores that we had. We really could do well if we would be on the other side of town. Well, if you're in a place like a very large city where Houston or Dallas or Atlanta or Miami, I love those. You may not need a shop, multiple shops, but I love the idea of a parts store because you're convenient and you can end up selling a lot of stuff there. The, you know, my prior employer is opening up a new one south of Birmingham that they just completed. It's a parts-only facility. You know, the salesman has a shot, has an officer if he wants to show up. But they're very effective because you can do about 70% of what you can do out of a full service shop, because you're still going to get the field business at a much lower cost. And if you don't like it, basically what you've built is a small warehouse. And, you know, we're all distribution is in the real estate business to a certain degree. And most of our buildings are fairly limited use structures. But a small warehouse is always pretty marketable. So worst case scenario, you probably didn't go wrong there.

And you hit it, you know, Napa is a big competitor for all of us. You know, when you are selling five-gallon oil, containers at your facility, your competition is not the Caterpillar dealer, the Komatsu dealer, the John Deere dealer. Your competition is Walmart and Sam's Club and Costco. And people are going in for convenience on there, whether it's def fluid or whatever. And so having a much more convenient place, I try not to give away some of my old best secrets sometimes, but there's certain things that a guy is not going to go across town to get. A hose is a great example. So if you can put a hose machine in that parts facility, you'd be surprised how the kind of business you can pull in there. And Napa gets our business every day. because they have a hose machine and you know what they do half the time they put a 2000 or 2500 psi hose you know they you bring in a 5 000 psi hose and he and he gives you a great price on a 2500 psi hose and it blows you know three three days later and you get a phone call going there's something wrong with the machine's hydraulic system you people have crappy hydraulic systems well You know, you went to an incompetent guy to put your hose on, but I'm getting blamed for it. So the more you can get those opportunities, the less of a problem you have.

Absolutely. And you can't believe if you get into it, it's astonishing what you were losing. You become amazed at what you were losing.

I think we, we had to, we had to train the heck out of our people. And I said, I sent all kinds of people to Denver to get Gates trained. And, and, you know, you, you send a guy there for a week and he comes back and he's pretty good on, he's pretty good on hoses and fittings. And, and it's also a safety issue. But what ends up happening is the perception of your parts availability skyrockets because that guy doesn't expect you to have an engine. But if you can get him up and running in an hour and a half because he's blown a hose, he thinks you're pretty good. And that has been a – that was a godsend for us because everything that we sell these days has hoses on them. I walked into one of my shops very early on after I was trying to get into the hose business. It was a long and painful experience getting into it, requiring a lot of training and a lot of leadership above my level. But I walked into one and they had a hose truck, a mobile hose truck that they brought into the shop to re-hose a machine. And I had a hose machine in my parts department. That was an ugly day.

I've enjoyed it. I think one thing I would like to add is. Everybody needs to think about trying to get their labor rate right now. Get that up a little bit. The iron is hot. If they're going to be calling for our people, and if we're going to have to pay our people more to keep them, let's get our rates. I can always remember when the coal business was booming. Nobody ever complained about my rates ever. And because, you know, so if there's one place to kind of leave people, I guess I would strongly suggest doing what normally we think is painful, but asking for a raise.

Well, it's always fun talking to you. We always talk too long.

Thanks.