President: Jim Rutherford
Specialty: Construction, logging, mining equipment
Year founded: 1954
1999 revenues: About $37 million
Projected 2000 revenues: About 8 percent growth

Last year proved to be a boom for Totem Equipment, but state budget cuts from Initiative-695 could make 2000 a bust.

"It was a record for us last year," says Totem President Jim Rutherford. The construction equipment company sold more in terms of volume than ever before. "It was 10 percent greater than our next best year for volume."

But, if it weren’t for a couple of big "one-time" sales this year, Rutherford says 2000 revenues could be about 10 to 15 percent lower than last year. "Business was good last year," he said. "I don’t see it being quite as good this year."

Rutherford says I-695, the voter-approved initiative to cut the cost of car tabs down to $30, will have an impact. "Even with the judge’s decision, I don’t think that’s going to have an immediate impact until it’s confirmed by the higher court."

With the state government slashing funding for road projects, Rutherford says his customers are hurting. "We have a very large customer... a lot of his business comes from state road projects," he said. "To think 695 doesn’t have an impact on his business is head-in-sand."

Construction and mining equipment continue to be a bigger part of sales than logging equipment. "I would anticipate it continuing that way," Rutherford says. "Everything that is excavator-based, there may be 250 units sold this year. At its height it was 500 or 600."

Another difficulty for Totem is the rise in renting rather than purchasing construction equipment. Totem rents equipment only as an incentive to buy. While renting-to-rent has only increased, Rutherford says there are benefits to buying equipment. "You know what your fixed costs are going to be," he said. "If your company understands that they’re going to be in business for five years, it makes sense to buy."

Rutherford says the "gray market" in Asian equipment is a continuing problem as well. "We still suffer from the gray market infusion of equipment into the Northwest, despite the efforts of the different government agencies to try to curtail it," he said, adding that last year customs agents seized more than 2,000 units nationally.