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The Equipment Dealers Association (formerly North American Equipment Dealers Association) is committed to helping dealers succeed.
Fuel Prices Projected to Stay Low
North Sea Brent crude oil prices averaged $31 per barrel in January, a $7 decrease from December and the lowest monthly average since December 2003. Brent crude oil prices averaged $52 per barrel in 2015, down $47 from the average in 2014.
The U.S. retail regular gasoline price is forecast to average $1.98 per gallon in 2016 and $2.21 in 2017, compared with $2.43 in 2015. In January, the average retail regular gasoline price was $1.95 per gallon, a decrease of 9 cents from December and the first time monthly gasoline prices averaged below $2 since March 2009. Source: U.S. Energy Information Administration
A Big Thank You to STIHL Inc
Company donation to the Equipment Dealers Foundation
On behalf of the EDA Board of Directors thank you to STIHL Inc for their generous donation to the Equipment Dealers Foundation (EDF). The donation reinforces STIHL’s commitment to not its dealer network but to the outdoor power equipment industry in supporting the foundation’s efforts to assist dealers and their employees. The EDF was created to provide grants to meet the industry’s need for training resources, career advancements and scholarships to current and future dealership employees of EDA members. Through the years, the EDF has expanded its efforts to help dealership employees affected by natural disasters.
We invite our corporate and manufacturer friends to join STIHL and the many dealers that have made contributions to the Equipment Dealers Foundation. Your tax exempt donation can be made by check made payable to Equipment Dealers Foundation, 165 N Meramec, St. Louis, MO 63105.
Combine Sales Bright Spot In Down Machinery Market
A recent report released by the Association of Equipment Manufacturers (AEM) shows self-propelled combine sales were up 21.4% in the U.S. compared to last year at this time.
Sales of less than 40 hp. tractors also saw positive growth with an increase of 13% year over year.
“We’re seeing some bright spots in the data from January sales, and our members tell us they are gearing up efficiency and are better prepared to meet the challenges of this new normal than they were 12 months ago,” says Charlie O’Brien, AEM senior vice president. “In addition, last week the USDA announced that 2016 net cash farm income is expected to be down for the third consecutive year, though the decline will only be 2.5%, which indicates stabilization in comparison to the more than 30% drop last year. While this deterioration in farm economics will undoubtedly affect our industry, there is still some hope that production ag might get a boost from an extended Section 179.”
Sales of 40 to 100 hp. tractors didn't fair as well and decreased (-5.7%) for the third consecutive month. Sales of larger than 100HP 2WD tractors (-38.5%) and 4WD (-9.3%) tractors also dipped.
New Study Confirms LIFO Repeal Would Be Job Killer
The Tax Foundation has released a new report analyzing the economic impact of repealing the last-in, first-out (LIFO) accounting method. LIFO is widely used by equipment dealers and by companies in other inventory-intensive industries.
Repeal was first proposed by GOP senators a decade ago to pay for a short-term gas tax rebate during a period of high oil prices. Since then, LIFO repeal has become a popular revenue raising proposal and has been included in many Obama administration budgets.
The study confirms that repealing LIFO would hurt businesses, destroy jobs and lead to less tax revenue for government.
The Report also found that getting rid of LIFO would:
• According to the Tax Foundation’s Taxes and Growth Model, the elimination of Last-in, First-out accounting for write-offs of future inventory would reduce GDP by $11.6 billion per year and end up reducing federal revenue by $518 million each year.
• Unless a special provision were made, LIFO repeal would also retroactively tax a company’s “LIFO reserve.” This additional tax could hit cash-strapped companies particularly hard and could result in 50,300 additional job losses in the short run.
A copy of the study can be found here.
Supreme Court Blocks Climate Rule For Power Plants
The Supreme Court has blocked President Obama's landmark climate rule for power plants, dealing a major blow to the president's climate agenda. In an order released Tuesday night, the court said it is placing a stay on the Environmental Protection Agency's plan to cut carbon pollution from power plants while industry and state lawsuits move forward.
The court granted the request in a 5-4 vote on Tuesday night, saying the rule was on hold until the circuit court reviews it and Supreme Court appeals are exhausted. The court’s four liberal justices dissented from the decision. The rule — the Clean Power Plan — is the main plank of Obama's climate change agenda. It’s designed to cut carbon pollution from the electricity sector by 32 percent over 2005 levels by 2030 by assigning states individual reduction targets based on their energy mix.
New EEOC Rule Would Expand Reporting to Target Gender Pay Gap
The Equal Employment Opportunity Commission (EEOC) is proposing to expand employer reporting requirements to target what the Obama administration calls a stubborn and persistent gender pay gap.
Current rules require federal contractors and first-tier subcontractors with more than 50 employees and all companies with more than 100 employees to annually report the number of individuals they employ by job category, race, ethnicity and gender. The new rules, unveiled by President Obama on Jan. 29 and published in the Federal Register on Feb. 1, would require these employers to also report the number of hours employees work and how much they are paid.
Canadian Energy Companies Sell "Jewels" To Keep Oil Sands Afloat
Faced with record low prices for heavy crude, Canadian energy companies are sacrificing other parts of their business to keep higher-cost oil sands production going and safeguard the billions already invested in these multi-decade projects.
Companies including Husky Energy Inc, MEG Energy Corp and Pengrowth Energy Corp are selling assets or slowing light and conventional oil exploration and production, even as they forge ahead with oil sands projects that are in many cases bleeding money on every barrel.
Although the move to support higher-cost production seems counterintuitive, oil sands companies take a longer-term view that shutting plants in Alberta would be very expensive and risk permanently damaging carefully-engineered reservoirs, underground deposits of millions of barrels of tarry bitumen.
It is easier, and cheaper, to shut down and later restart conventional wells according to the Reuters news source.
Agriculture Manufacturers Discuss TPP with Canada's Parliamentary Secretary of Trade
Leah Olson, President of the Agricultural Manufacturers of Canada (AMC), participated in a constructive roundtable discussion regarding the Trans-Pacific Partnership (TPP) with the Parliamentary Secretary for International Trade, David Lametti on January 21st in Regina.
The meeting in Regina was part of a series of national consultations. Olson welcomed the discussion, which explored issues that are important to short line agricultural equipment manufacturers and their success here at home and on the global stage.
At the meeting, Olson stated the TPP holds a great deal of potential for farmers and agricultural equipment manufacturers alike. She also lauded the Industrial Research Assistance Program (IRAP).
AED Foundation Report Says Skilled Worker Shortage Costs Billions
The U.S. heavy equipment distribution industry loses at least $2.4 billion each year as a result of dealers’ inability to find and retain technically skilled workers. The figure, based on an estimated nine percent of earnings foregone by American dealerships represented by AED, was included in a report released on Jan. 20 by The AED Foundation (AEDF).
The foundation, established in 1991 and directed by AED members, focuses on professional education and workforce development issues specific to the equipment distribution industry. AEDF commissioned a team of public policy researchers from the College of William and Mary to analyze the industry’s technician shortage based on a summer 2015 survey of AED’s members in North America.
“This report provides a window into the current state of our industry’s workforce,” AED President & CEO Brian McGuire said. “Distributors have known for far too long that finding the right people is tough and it’s getting tougher. A report like this tells policymakers this isn’t just an anecdotal or local problem, it’s a national crisis.”
EDA TO CO-HOST LEGISLATIVE FLY-IN IN WASHINGTON D.C.
There is Still Time to Register
On March 1 - 4, 2016 EDA will co-host a Legislative Fly-In in Washington D.C. with the Iowa/Nebraska and Minnesota/South Dakota Equipment Dealers Associations. During this must attend event, Dealers will enjoy several social outings, attend informative presentations on timely legislative issues and then take their message to the Hill. Dealers wanting to attend the event should contact Natilie Higgins at email@example.com. The schedule for the event can be read here.
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From the NAEDA Office
Task Groups Complete Initial Work
NAEDA board to consider recommendations for enhancing member service
For the past several months, eight task groups have been working behind the scenes to address the priorities or focus areas for transitioning NAEDA to a new governance model. Later this month, the task groups will present their findings and recommendations to the NAEDA Board of Directors for consideration. The meeting promises to be an exciting opportunity to plot the course for significant change within the association - change that will enhance service to the members and better position NAEDA for continued success.
Free Webinar to Watch on How to Achieve Greater Success in Hiring National Guard Members and Other Veterans