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1999 Construction & Equipment Forecast

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1999 Construction & Equipment Forecast
March 8, 1999

Western Power gets into rental market

By JERRY CRAIG
Journal machinery editor

Look out Hertz and United Rentals.

Western Power & Equipment has decided to get serious about the equipment rental business and has formed a separate rental division named Western Power Rents.

The goal is to provide better service for our rental customers, said Dean McLain, founder and president of WPE, the largest Case equipment dealer in North America.

Western Power Rents will operate either in stand-alone rental facilities or in combination sales-rental branches.

McClain
McClain
The company's first rental-only facility has just opened in Kent and will serve as the headquarters and training facility for Western Power Rents. At least 20 new hires are anticipated initially as the rental division gets off the ground and spreads to locations throughout Western Power's five-state territory.

Robert Lane Sr. has been named general manager of Western Power Rents.

The next all-rental equipment facility is slated to open in March at 12406 Mukilteo Speedway, Mukilteo, in a building formerly housing a contractor-supply business. In another new move for the company, Western Power has decided to continue operating a contractor supply business there. More such stores may be established if the Mukilteo operation proves successful, said McLain.

The current Western Power facility in Everett will be closed.

More rental-only stores will be opening later this year in Portland and Northern California. There are now two Western Power branches in Portland. One will be converted to rental-only. Probable rental-only locations in Northern California are the Bay Area, Sacramento and possibly Redding.

Combination rental-sales stores are planned this year for Pasco, Moses Lake and Spokane as well as Sparks, Nev.

Western Power Rents will have its own separate identity within the larger combination stores: separate counter, separate personnel, separate everything, said McLain. We rent equipment today but just not as efficiently as we should.

Western Power, headquartered in Vancouver, Wash., has been one of the fastest-growing machinery houses in the western U.S.

Last year it purchased Yukon Equipment, a Case equipment distributor with stores in Anchorage, Fairbanks and Juneau.

With other recent additions in Yuba City, Calif. and Clarkston, Wash., Western Power & Equipment now has 28 facilities in Alaska, Washington, Oregon, California and Nevada.

McLain says he would like to open another branch in Southern California in addition to the one in Buena Park outside Los Angeles. Expansion into southern Nevada is another strong possibility.

It's possible we'll move into other Southwest states as well, said McLain, with Utah and Arizona likely candidates.

Other expansion possibilities are also being explored at Western Power. Besides the new contractor-supply venture at Mukilteo, the company is considering diversifying into new product lines such as industrial forklifts and perhaps the homeowner items.

Diversification, says McLain, is one way of blunting the next downturn in the boom-bust construction cycle.

While Western's Power's overall revenues remain healthy, McLain says there has been a slowdown in Oregon due mostly, he says, to Asia's economic problems.

California, says McLain, is very strong while Alaska is active but not booming.

In anticipation of increased highway construction and maintenance work, Western Power recently added Champion motor graders and Dynapac rollers and pavers to its equipment line. The company is prepared to take on more equipment lines if they become available, according to Mark Wright, Western Power's chief financial officer.

When McLain and a group of investors started Western Power & Equipment six years ago, annual revenues were $30 million. Last year they rose to $165 million.

For 1999, McLain is projecting revenues of nearly $200 million.

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