Thank you gentleman. Now that we are back on the subject I would be curious to know is there similar "age limits" for machinery in US as we have here in Europe (and also in Australia) where machinery over 10 years old is not accepted for public construction sites and/or old machinery gets less points in tender process? As suggested below, in post #7, I've split this discussion from the thread on Chinese Motor Graders. A word of caution though--The Forum Rules prohibit discussion of politics unless directly related to this industry. In that sense, this thread qulaifies, but there is always a great temptation to go further afield and begin discussing politics in more general terms when one's politcal beliefs are held very strongly. DO NOT yeild to that temptation. Keep this discussion civil, and think about what you've written before hitting that post button. Thanks.
Not that I know of. The only place where it is getting crazy is California where the state is requiring that equipment on government paid for construction meets emission standards. Don't ask this to often or to loud or these fools over here will get the idea and require it. All that will do is require contractors to replace equipment and drive up the price of the work to be paid for with tax money. But that is no big problem either, they will just raise our taxes to pay for it.
Truefinn, is it for real that 10+ years old you can't do Gov work? I can't comphrend that! Is that all equijpment? Our 10 yr old Cat stuff is on the 1st rebuild and in excellent condition. $800,000 627's and D8's make it impossible to operate that much new stuff when your a small contractor with 8 or 10 scraper spread. There is not that much profit %'s. Your margains there must be much greater and here. Would like to hear more about that.
catken It is a disturbing trend to me, and one pushed by the largest of companies. They can afford to buy the new gear required, as well as afford the political payouts to get our government to see how much better it is. It is a windfall for the large companies, and comes at the expense of the small operators, while greatly driving up the costs to the taxpayers. The little guy can't afford to buy all new, so he gets pushed out of the market, and prices go through the roof.
European construction firms saddled with equipment age requirements may be bidding to a price point set by socialist governments to include a minimum of profit that will support changing rolling stock periodically. So the game might be, how close can you come to that low point. Just a thought. I
Here, here Jerry! I see this as large problem not just in our industry but others as well. The large Corps have office floors full of lawyers and accountants plus a basement full of lobbyists with fat checkbooks. This makes tough competition for the small contractors who do not have those resources in-house nor the working capital to hire consultants.
Hey Mods, finally when we get some serious talk and interest to this topic, it's about wrong subject. If you see fit, could you be so kind and create a new topic for this subject about machinery age limitations? (catchy topic names can be suggested here)... Catken, I am not an expert on these issues (so someone please correct me if I'm wrong) but these regulations regarding Goverment contract vary a lot not only inside European Union member states but also inside each country. However the legislation is proceeding towards similar goal everywhere so I think that within not so distant future these regulations are same everywhere. I've come accross few different type of regulations. One where machinery over 10 years old is not accepted to work at all and another (more common) where new machine gets 10 points, 3-5 year old gets 7 and so on and over 10 year old get no points.
Let us say that this type of law was passed here where machines in excess of ten years were not allowed. The very large contractors with very deep pockets would be the only ones who could compete. However, they will require massive amounts of cash to keep replacing their fleets on a ten year cycle. The only place they can get the cash to do that is to charge higher and higher prices for the work they do. When this happens the government agencies who pay for the work are not going to have the funds to pay for the previous volumes of work. So the government agencies will have to award fewer contracts to because of the inflated prices due to the ten year rule. Now who gets hurt? The people who would have been working on these additional projects loose their jobs due to less work. Maybe you can get away with this in your socialist Fineland and the rest of Scandavia where the government already takes damn near everything you make, but not here. The people in this country will never stand for an 80% tax rate like they have in Sweden. I am not sure what yours is in Fineland. This whole ten year year idea sounds like one of the worst damn ideas to come down the line. Like I said before, don't say it to loud or our fricking idiots in Washington will hear it and think it is a wonderful idea. At least up until now we have never been set up to operate they way they do in the European Union or Scandavia where the government takes everything away form you. There is still incentive in this country to start up a company and go out and make a "gazillion" dollars (that is a lot of money) because we are allowed to keep a good share of it once we make it. If we know the government is going to take 80 or 90% of it, the "why should I go through it" syndrum kicks in when you know it will all be taken away by the tax man. This is the exact reason why a lot of people with money are leaving the State of California here in the US because of the horrific business and tax situation there. People of wealth are also leaving France for the same reason. I am amazed that the Scandavian Countries have any population at all because of the tax situation there. Back to the base subject, It is a rotten idea.
I agree, from about post 65 on seems to be deserving of its own thread, as it has veered way off topic from the Chinese grader discussion.
is this true 80% tax rate can some one confirm this?
As you can see in the link below, the U.S. income tax rate has previously exceeded 80% on occasion: http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213
You are right, but this table shows the distribution accross all levels. http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?DocID=456&Topic2id=20&Topic3id=22 The highest marginal rate, only on the top earners, is not what most deal with. I would like to see a comparison of this to other countries in this discussion.
Hell no, c'mon Greg you obviously are not that stupid. This goes to same category with "best damn steel" huu-ray.. The tax rate is around 30% give or take and we are not socialist here in Scandinavia, there is a thing called google where you can try to check some facts before you make yourself look like a fool. There is of course lobbying going on everywhere but in according to Transparency International we are doing fine being less corrupted then let's say.. almost any other nation. Here are some facts: http://www.guardian.co.uk/news/datablog/2011/dec/01/corruption-index-2011-transparency-international Goverment job here pays you around 60-70 euros / hour (75-90 USD) for grader work but gasoline here is much more expensive, around 1,3 USD / litre. "....you obviously are not that stupid." How about something a little less inflammatory, like I believe you are mis-informed on that point ... Digger :cool2
Just to reiterate what I added to the opening post (in case anybody skipped right down to this point): A word of caution--The Forum Rules prohibit discussion of politics unless directly related to this industry. In that sense, this thread qulaifies, but there is always a great temptation to go further afield and begin discussing politics in more general terms when one's politcal beliefs are held very strongly. DO NOT yeild to that temptation. Keep this discussion civil, and think about what you've written before hitting that post button. Thanks.
I charge $90.00 to $110.00 per hour for grader here depending upon the job. Off road diesel is at about $3.60 a gallon. The big operators on government paid for jobs charge more. I don't see how with your rates as shown above it is possible to make a go of it. At those rates of $75.00 to $90.00 an hour I would let mine sit. As for socialist, my trips to Scandavia and talking to people in both Norway and Sweden gave me the impression that they are much more socialist than are we here in the US. I don't know what your operator wages are in Finland, but here the wage rates are set by the various government agencies that are paying for the project based upon the locality of the project and legislation passed in the 1930's. These wage rates are quite high when the base wage and fringe benefit allowance is included.
Without specifiying what the statutes and sources are, this discussion is going to have a lot of misinformation. Equipment in the EU must pass an annual safety inspection. There's no European law that I am aware of that prohibits the use of a machine based on its age. Discrimination based on the age of machinery sounds like part of the contractor vetting process. I would expect this to vary from country to country and even from one civil engineering firm to another (as many gov't jobs are carried out from planning to bidding and to final completion by private civil engineering firms). As for taxes in Europe, they are painfully high. Most countries have about a 20% VAT (value added tax) that applies to nearly all goods and services- most places have lower rates on food etc.) 80% tax is a bit of an exageration. But if you factor in the 23% VAT that the contractor charges for his work on behalf of the government, the tax rate is over 50%. Depending on what the alcohol tax is and how much you buy, it's probably safe to say that there are some people whose net tax rates are close to 80%.:drinkup
Digger Thanks for moving this. It is a good discussion. Greg: I think the rates Truefinn mentioned are just for the operator. The machine rate is not included, unless I am missing something. This highlights the difference right there. We can own the equipment, pay the operator and the fuel for barely more than they are paying the operator. If you add i the requirement to have new equipment on a seemingly continual basis, I can imagine the total cost per hour is close to double of what we can work for. Truefinn: Does that operator rate apply for all work, public and private, or is there seperate pay scales, similar to what we have, with prevailing wage rates we have to pay for government funded work. These rates usually match the union rate. Privately funded work done by open shop contractors can pay whatever they like, subject to minimum wage rules, but have to pay a competitive wage to get and keep qualified employees.
Yes you are correct and I believe that I wrote somewhere that this varies a lot depending on country and city. My idea was to start this thread because obviously this (machinery age) is something that will play a significant role in the future. This is all not so black and white as it sounds as in these terms there are of course escape clauses and loop holes. I will write more of these once I got time. I agree 100% that alcohol is way too expensive in Scandinavia..
No, but those are the people with the money who make the large capital investments that result in jobs. Their tax rates determines the amounts they have and are willing to invest.
Partly true but those costs are "machine included". Operator salary, assuming he is not the owner, is around 10-15 euros / h according to some union charts. It can be bit more in real life. That salary times 1,8 is what machine owner needs to pay in total. Total sum which machine owner needs to count for operators salary is approx. 25-30 eur / h. We've got probably smaller salary here but health care is paid for everyone. There is of course overtime pay etc. benefits on top of this and sometimes you can charge hours even if the machine is not doing anything for days, it just needs to be there. The price you can charge from private sector can be something different, for example it can be similar hour charge but petrol is included. Needless to say that these prices compared to new regulations are an interesting equation.
Yair . . . this ten year B/S is crazy. As a for instance. That forty year old J621 that features in another thread would probably strip and stockpile topsoil cheaper than any thing in existance. If you have an efficient machine why shouldn't you use it when you tender on a job. I don't think this calls for the customary cheers.
Can someone cite the actual law limiting use of equipment anywhere? When the air pollution stuff started here in the states, all the government types figured a dozer, scraper or wheel loader lasted about as long as a car driving on the highway. So they figured any piece of iron would be obsolete and out of the production stream in no more than twenty years with the average item gone in ten. There was a huge shock at the state levels on the left coast when they found out there there were hundreds of pieces in excess of thirty years old and a few scraper fleets still around operating that were forty years old. As I recall that is why the Tier rating were implemented. It was a way of limiting the life of old technology iron. I'm thinking that Tier 4 Final will require parking any non Tier rated machinery for commercial use in this country. By that time I'm also thinking they will set a date to retire Tier 1 iron in the not distance future as well.
Tell you what. Some of the exhaust coming out of old engines, diesel and gas, is so loaded with pollutants I'm for getting rid of them all right now. And then like one truck leasing agent said in Heavy Duty Trucking several years ago, "The exhaust coming out of some of these new diesels is cleaner than the intake air in some operating environments." I'm down with that. I drove a cabover KW in 1972 with a CAT 1693 diesel rated @325 HP. I wonder if some of the particulates it spewed are still suspended in the atmosphere... That sucker also had a very curious transmission set up, a 20-speed Spicer developed for Army tanks with the first ten holes blocked off. It had an odd shift pattern, but effectively transferred the torque of that humongous engine without tearing up. Ran like a sick dog I thought. The ones turned up to run at 440 were some kinda hotsy-totsy. Word was you could burn the tires right off the rims in the hills if you didn't respect the power. Any, here's to air you can breath without dying.:drinkup
truefin says 60 to 75 Euros , or 75 to 90 US dollars for grader work. I assume that means machine, fuel, operator and the whole nine yards. Put a grader on a white sheet job here in the US and wages and fringe allowance will eat up close to $50.00 an hour. Add in employer portion of Social Security, state and federal unemployment and workman compensaton insurance, close to $18.00 for fuel and the $75 to $90.00 is long gone without allowing for machine maintenance, company overhead and the like. The numbers just don't work.
Yes, approx. 30 eur will cover everything for the operator so there is anohter 30-45 euros for fuel and maintenance. The numbers work but you do not see any new Caterpillars here. What is a cost of a new CAT in US btw?
Not sure what a new Cat 12M costs here, but I know they are a pretty penny. Small guys like me are not buying them, that is for damn sure.
Yeah, it makes you want to grade out with a D4 to close tolerance and finish with a box blade. Kind of like when the business went from scrapers to ag tractors with pans. The dozer/pan combo of yore was the ideal dirt bulking system until the track expense killed it. But talk about move dirt turn on a short turnaround haul, it will never have an equal. But I digress. Back to graders, Some CAT dealers are sellling and renting NORAMS, which now come with CAT engines. Must be a future there for the small guy at around $130,000 USD new for these remakes of the Fiat-Allis 65 Series machines. They've got that Roll-Away modlboard feature which increases production.
Reading the other thread about the chinese grader got me thinking, yeah that can be dangerous. Are these regulations requiring newer equipment not perpetuating the "throw away society"? Now I am not implying that a chinese grader is a throw away, it's deeper than that. If the governments around the world start to require that a piece of iron be XX years old, wouldn't the contractors that are affected by this regulation not start to look at the cheapest, newest option without regards to longevity? Just a thought...
this thread hits close to home for me because i am working for a contractor who runs almost all older iron. a 235, 977, 955, d8-h and some other odds and ends. i enjoy running the old stuff but it is to the point here in chicago that this iron is all illegal on some jobs. breaks my heart because it all runs so well.
Without any real support, yes they are throw away now but in the future, who knows. I guess these regulations were ment to protect the job site, normally new machinery outperforms the old one and usually they are more reliable. In real life this is not of course the case but they have to draw the line somewhere to avoid situation where anyone can take part in these tenders with machinery from middle ages.
Without any rules of the sort our market sorts this out. The large, high production jobs typically go to the contractors with the newest, best maintained fleets, while there is plenty of work for what I refer to as the second and third tier contractors. I believe what matters more than the age of the machines is the history and experience of the contractors involved. If the customer knows you have a reputation for many breakdowns, and resulting project delays, you will soon not be invited to bid. Also, if you have a history of getting jobs done on time, it matters little what age equipment you use to complete it. I have completed many projects on time using equipment ranging from new to 30 years old, with an average fleet age of around 18 to 20 years. On time work can be done by having all new iron, at a substantial cost, or having some spares for the older machines, so if one breaks down, one is ready to go to pick up the slack. A good example is scrapers. When I had 10 older machines, I would never figure a job that needed more than 6. Then, there would always be a spare ready. If I could keep machine availability to only 60%, the job would run at near 100%. Even with 25 to 30 year old machines, a good mechanic can get 60% reliability, and the job will not suffer from it. The difference is that the 10 I had combined cost less than one brand new machine. You can only afford brand new machines of the larger variety if you have years of steady work lined up. With the older machines, they are paid for, and if there is a delay in the work, you do not go broke waiting for the next job to start. With new equipment comes a huge payment, and the banker doesn't care that a permitting problem delayed your job for 3 to 6 months. He wants hois payments whether you are working or not. That is a quick way to ruin, if you ask me.
One thing for sure, the cost of doing business always seems to go up.