Flying high

Nearly three years ago Finning, Caterpillar's UK dealer, caused quite a stir and some consternation in the plant hire sector with its purchase of Hewden Stuart, the country's largest hirer.
Since then, the debate over the extent to which other plant manufacturers would follow suit has raged incessantly.
On the one hand, manufacturers, it was held, would fall over themselves to follow in the footsteps of Caterpillar/Finning and buy plant hirers in order to guarantee themselves a route to market. If people would rather hire than buy, why not be able to offer them the option?
On the other hand, the UK's almost unique combination of a long-established plant hire sector and about 80% market penetration in the construction industry was seen as a deterrent to manufacturers becoming more involved, for fear of being seen to compete with their customers.
By and large it is this latter analysis that has held sway - until now.
In Europe and the US, manufacturer-owned hire companies are becoming the norm. Volvo and Komatsu are establishing own-brand hire stores, and Liebherr has a range of hire shops on the continent, but the UK has been very carefully excluded from the public plans of these manufacturers, with the obvious exception of Caterpillar.
In the past three years, the only major manufacturer other than Caterpillar to establish an explicit relationship of any sort with a plant hire company is Terex.
In contrast to Finning, Terex did not buy a plant hirer. Instead, six months ago, Terex sold its relatively modest in-house hire fleet to Shropshire-based plant hirer Hawk in a move that Terex was happy to describe as "a strategic development to secure a firm foothold in the UK and European rental market".
Close relationship
The relationship is close enough for Terex to agree to Hawk using Terex in the title of the new business: Hawk Terex Rental.
Construction division vice president John Rutherford says: "We have a very high regard for the management of Hawk. It handles Terex machines in a very professional way."
Despite this association with Hawk, Terex is keen to maintain its independence when it comes to the management of the rental business. "Hawk makes its own commercial decisions, which is as it should be," says Rutherford.
"If manufacturers force rental companies to buy their products, or rental companies choose to buy from a particular manufacturer not on the basis of their own commercial judgement, then it's not good for business. Rental companies must have a level of autonomy to decide what's best for them. It's the level of autonomy that makes our relationship work."
Rutherford is adamant that this degree of involvement is as much as Terex wants. "The company's policy is that we don't want to be involved further. We certainly don't want total ownership."
This is despite the fact that the number of Terex plant hired out by Hawk has already expanded over the past six months.
The original Terex rental fleet purchased by Hawk just comprised ADTs, but Rutherford says the new company has started to push wheeled excavators. "We have started to hire Atlas wheeled excavators through Hawk. We're making very good progress with these and this is a successful part of the relaunch of Atlas wheeled excavators into the UK."
Rutherford says Terex has no plans to use its relationship with Hawk to start hiring out its extensive range of smaller kit: Benford rollers and dumpers, and Fermec backhoes.
"Hawk's main business is heavy equipment. We don't intend to go into the smaller end of things, this would definitely be against the spirit of Terex. Hewden and A-Plant are big customers and we don't want to compete against them."
Treading on toes
This suggests that Terex may be aware that it is treading on the toes of its other plant hire customers in the heavy end of the market through its link with Hawk. Rutherford denies this. "We still sell to other plant hirers and we continue to support them. We're there to support all our customers. We just have a special relationship with Hawk."
One particular aspect of this special relationship is the link up that allows Hawk Terex Rental to take advantage of the network of Terex dealers across the rest of Europe as a base for its own rental business.
"The rental market in Europe is not as developed as it is here," says Rutherford. "If our customers wanted to rent they would come to us, but this wasn't really our business. Now they can still come to us but be looked after by Hawk, which is a rental company and can provide the appropriate service."
"It's early days yet but so far we're very pleased," says Rutherford. <F0A8>