ILMA Compoundings January 2017 - 25

Will All of Those

Squeaky Wheels
Need More Grease?

The Used Heavy-Equipment Glut
and Its Impact on Lubricant Sales
By Josh Markel

T

he lubricant industry has survived a number of market shifts
recently. Whether it has been
the crash of the mining industry, the
drop in oil prices or the slump in new
heavy-equipment sales, the industry has
found ways to survive the fluctuations
of a changing economy. Now, the latest
problem is one related to all of those
previously mentioned: a glut in used
heavy equipment in the field.
The Wall Street Journal highlighted the
concern in its September 2016 article
titled "Heavy-Equipment Glut Weighs
on Machine Makers." The article shows
that slow sales of new equipment and an
increase in used equipment in the field
has had an impact on Caterpillar and
John Deere. The successes and failures
of both of those companies have a huge
impact on the heavy-equipment industry,
an industry that in turn has a big impact
on the lubricant industry. The question,
then, for the lubricant industry is what
does this say about the economy and
how it will affect business in the near
future? Representatives from a number of
lubricant and grease companies provided
their thoughts on the issue and how it has
affected or will affect their businesses.

TWO TO THREE YEARS TOO LATE
Lon Fanning is the director of Research
and Development and Technical Support

of Metalworking at Dubois Chemicals. His
company makes metalworking fluids for
industry manufacturing. He feels the news
of the slumping new sales and heavy-equipment glut is two to three years too late. Fanning indicated that the heavy-equipment
industry was not prepared for the slowdown
and had to absorb the losses. One area of
loss for heavy-equipment manufacturers
has been in an excess in new inventory that
was not selling until recently, when sales
stabilized. This excess of new inventory
results in less production and less demand
for metalworking fluids.
"The slowdown started about two to
three years ago when the mining industry
saw decreases," Fanning said. The September 2016 Bureau of Labor Statistics release confirms a peak of mining
employment in September 2014, followed
by a crash of the industry, and then
recent stability. According to the release,
"Mining employment was unchanged
in September [2016] after declining by
220,000 from a peak in September 2014."
The October 2016 statistics still show that
mining, construction and manufacturing
"changed little over the month," confirming the stability is continuing for now.
Although stable now, the mining industry
decrease meant a decrease in new sales of
heavy equipment, and that decrease has
been slow to rebound.
New equipment sales have just started

25



ILMA Compoundings January 2017

Table of Contents for the Digital Edition of ILMA Compoundings January 2017

Letter from the CEO
Inside ILMA
What's Coming Up
Industry Rundown: International Insight
Industry Rundown: Market Report
Industry Rundown: Perspective
Industry Rundown: In the Know
Beth Ann Jones & ILMA: A Family Matter
Squeaky Wheels
Infineum Perspective
Business Hub
Counsel Compound
Washington Landscape
State of the States
In Network: Member Connections
In Network: Cross Connections
Portrait
ILMA Compoundings January 2017 - Cover1
ILMA Compoundings January 2017 - Cover2
ILMA Compoundings January 2017 - 1
ILMA Compoundings January 2017 - 2
ILMA Compoundings January 2017 - Letter from the CEO
ILMA Compoundings January 2017 - Inside ILMA
ILMA Compoundings January 2017 - 5
ILMA Compoundings January 2017 - What's Coming Up
ILMA Compoundings January 2017 - 7
ILMA Compoundings January 2017 - Industry Rundown: International Insight
ILMA Compoundings January 2017 - 9
ILMA Compoundings January 2017 - 10
ILMA Compoundings January 2017 - 11
ILMA Compoundings January 2017 - Industry Rundown: Market Report
ILMA Compoundings January 2017 - 13
ILMA Compoundings January 2017 - Industry Rundown: Perspective
ILMA Compoundings January 2017 - Industry Rundown: In the Know
ILMA Compoundings January 2017 - Beth Ann Jones & ILMA: A Family Matter
ILMA Compoundings January 2017 - 17
ILMA Compoundings January 2017 - 18
ILMA Compoundings January 2017 - 19
ILMA Compoundings January 2017 - 20
ILMA Compoundings January 2017 - 21
ILMA Compoundings January 2017 - 22
ILMA Compoundings January 2017 - 23
ILMA Compoundings January 2017 - Squeaky Wheels
ILMA Compoundings January 2017 - 25
ILMA Compoundings January 2017 - 26
ILMA Compoundings January 2017 - 27
ILMA Compoundings January 2017 - Infineum Perspective
ILMA Compoundings January 2017 - 29
ILMA Compoundings January 2017 - 30
ILMA Compoundings January 2017 - 31
ILMA Compoundings January 2017 - Business Hub
ILMA Compoundings January 2017 - 33
ILMA Compoundings January 2017 - 34
ILMA Compoundings January 2017 - 35
ILMA Compoundings January 2017 - Counsel Compound
ILMA Compoundings January 2017 - 37
ILMA Compoundings January 2017 - 38
ILMA Compoundings January 2017 - Washington Landscape
ILMA Compoundings January 2017 - State of the States
ILMA Compoundings January 2017 - 41
ILMA Compoundings January 2017 - In Network: Member Connections
ILMA Compoundings January 2017 - 43
ILMA Compoundings January 2017 - In Network: Cross Connections
ILMA Compoundings January 2017 - 45
ILMA Compoundings January 2017 - 46
ILMA Compoundings January 2017 - 47
ILMA Compoundings January 2017 - Portrait
ILMA Compoundings January 2017 - Cover3
ILMA Compoundings January 2017 - Cover4
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