Issue link: https://read.dmtmag.com/i/93576
Modern Problems E LEGAL LINE very year aſter the Con- vention, I try to reflect on what I learned and heard, and come up with a topic that brings some new thoughts to the table. Sadly, my first comment will be a heartfelt goodbye and Godspeed to Don Reynolds, whom I have had the pleasure of knowing for more years than I care to count and have "opened for" many times. Don's insights and humor have been an inspi- ration to me in my own writings and presentations, even though we often disagreed. While Don and I come from very different backgrounds and education, we do share the chal- lenge of trying to reasonably predict – from different points of view – where our industry is headed. This leads me into the danger zone of prediction, devel- oped from discussions I had with the members about a whole range of topics...so here goes. First, the level of competi- tion in Europe, Oceana, and the Americas from the developing world producers will intensify, and will be increasingly felt in the more complex and sophisticated product lines. For those of you who were around then, this is a déjà vu of the U.S.-Europe situa- tion not so many years ago when wages and government "help" permitted the establishment of strong aſtermarket competitors. Like today, it started with then low-tech "commodity items" like rollers, idlers, chain, and grous- IDA UNIVERSAL November-December 2012 ers. Now, those producers are the "big boys" and can not only keep up, but also innovate to the level that the OEMs turn to them for advancements in product perfor- mance and durability. Cost is a secondary factor. This has not been lost on the developing world's producers. It is no longer enough to simply reverse engineer a product, get it close to the OEM specifica- tions and hit the markets running with lower prices. To effectively compete, quality and durabil- ity must be competitive, and the supply chain and backup must be fully developed to break into the "profit zone" with a truly comparable product. Markets for a much-lower-priced alternative product may always exist, but with machine sophistication growing, performance increasing, and the cost of installing the parts mount- ing, the quality gap has to narrow or disappear if the "invasion" is to succeed. Given the above, this view is a more myopic look from the "developed" side of the world. A vast market for lower cost prod- ucts remains in areas where older equipment still works and today's equipment will head tomorrow. This situation poses new chal- lenges for manufacturers and distributors: stay the course with products that satisfy the needs of the fast-growing developing world, but also invest in matching the OEM products in advanc- ing equipment in the developed Robert W. McIntyre IDA Association Legal Counsel world's markets. Unfortunately, it is always tempting to continue "doing the same, " as long as money is in the bank account and the factory floor hums, but eventually the market for horseshoes and Detroit Diesel 2-stroke parts dries up and the forges go cold. What the crystal ball seems to say is that choosing a market or group of markets is both the dilemma and the opportunity. Where can your company profit- ably compete in both the near- and long-term? The key word is profitably, which I will discuss later, as it is tempting to continue to use fully paid-for engineering and production capacity and hope for the best, instead of cutting into the personal income and lifestyle to launch a new product line. Thus, never confuse lifestyle with profit; they are not the same. These are hard concepts, especially since technology and regulation move with tsunami speed. Simply put, today's turbos, injection, pistons, hydraulics, undercarriage and GET, along with the machines they fit, are a moving target. Continued on page 84 11