Have you heard about the SaltWire News app?
Mixed feelings as COVID clip snowbirds wings
Daily fall forecasts and weather facts from Cindy Day
SaltWire's cartoonists bring heart and humour to the news.
SaltWire Selects: Stories worth sharing today
What you need to know about COVID-19: September 29, 2020
Chris Landry, president of Machinery Experts Inc. in Dieppe, N.B., sells several million dollars’ worth of equipment to steel fabrication shops throughout Atlantic Canada every year.
The prolonged oil industry downturn and the grounding of aircraft throughout North America due to the pandemic means little need for parts or the equipment to make them. That’s been Machinery Experts’ bread and butter for years.
Landry added used machinery to its product line and offered long-term maintenance contracts. That’s kept revenue coming in and his staff working while reducing capital costs for customers.
The young woman in a swimsuit pictured on the Machinery Experts Inc. billboard smiled from behind a pair of sunglasses.
Beside her on the sign on Highway 15, between Moncton and Shediac, were several Machinery Experts products: big, heavy machinery used by steel fabrication shops.
“It was supposed to be a summery feel,” says Chris Landry, the president of the company that imports, resells and services this machinery.
“We’re only minutes away from Parlee Beach . . . where everyone is wearing a bikini.”
But some women who saw the billboard earlier this month didn’t find it fun or light-hearted. They found it sexist and insulting, and they called Machinery Experts to voice their disapproval.
“Every two minutes, the phone was ringing,” says Landry.
“I couldn’t work.”
Media picked up on it, as well. Within 24 hours, Landry had the billboard taken down. It is to be replaced this week.
The fallout from the incident has been strangely positive. Some called to thank him for taking it down, and some said they actually liked it.
Regardless, it is not the first time Landry has successfully responded and adapted.
When things started to dry up in the oil patch last year, many steel fabrication shops saw the flow of orders for parts to that sector slow to a trickle. Then, COVID-19 hit. Planes were grounded and borders closed.
As the aerospace sector took a dive, contractors supplying parts took a hit.
These are Machinery Experts’ customers. Suddenly, those customers had to cut back on capital expenditures, including spending on new steel fabrication machines.
“Right now, aerospace is in the toilet and I don’t think this is going to be resolved soon, even if they find a vaccine today,” says Landry.
With the downturn, many steel fabrication shops are reluctant to invest in new machines that cost an average of $500,000 apiece. So, Machinery Experts has shifted its focus from selling new machinery to providing long-term maintenance contracts and offering more refurbished machinery, which costs between 30 and 50 per cent less than new equipment.
Before the pandemic, used machinery sales accounted for only 20 per cent of Machinery Experts’ revenues.
“Now, it’s about 40 per cent of our business,” says Landry.
“The used equipment business has grown and it’s now an easier sell.”
What they’re selling has changed but so has how they’re selling it. The sales team has not been able to hit the road to see existing customers and prospects. They use Zoom as a way of conducting meetings to showcase machinery for sale.
“We can’t be road warriors because you can’t cross the border, but that’s been a good thing in a way because we have the contacts,” says Landry. “We’ve been generating a lot of revenue just through cold calling companies that we might have sold something to a year ago and now we’re contacting them again.”
By cutting back on trips, Machinery Experts has been able to trim costs for accommodations, gas and tolls to cross the Confederation Bridge to Prince Edward Island.
Steel fabrication shops are trying to get the most life out of their equipment during this economic downturn. Machinery Experts has
“This is a revenue stream for us and it helps our customers because now they don’t have to deal with costly breakdowns,” says Landry.
Machinery Experts is also making more strategic use of its website, using it as a portal for customers to log into meetings and as somewhere they can request quotes on machinery.
A privately owned company, Machinery Experts does not divulge its revenues but Landry says the firm is still in the black and he’s hopeful it will be able to ride this out.
“For the next couple of months, I just want to break even,” he says.
“I’m hoping by next September things will be back to normal in the Atlantic region and the rest of Canada.”
The Pivot is a regular business feature showcasing an Atlantic Canadian company adapting to new market realities with innovative products, services or strategies. To suggest a business, e-mail: firstname.lastname@example.org.