John McGinty, managing director of Credit Suisse First Boston Corp., has been confirmed as a speaker at AED’s 2002 Executive Forum, Sept. 12-13 at the Westin O’Hare in Rosemont, IL.

McGinty will discuss one of the most pressing issues facing the construction equipment industry today—the colossal amount of capital needed to run an independent distributorship. As those requirements have increased during the past few years, dealers have found that many traditional sources of capital—banks and independent finance companies—either are tightening their lending requirements or getting out of the construction equipment ballgame altogether.

At the same time many manufacturers, who have seen their own capital needs increase as they pursue global strategies, are not as reliable a source for their distributors as they once were. The capital crisis is one of the key issues distributors must solve if they’re to thrive in the future.

"The capital requirements of this industry are immense," said McGinty, who garnered rave reviews from AED members when he spoke at the association’s 2000 Executive Forum. "Privately, many manufacturers will tell you that they do not know how they are going to get capital into their distribution networks.

"How this scenario plays out will have a far-reaching impact on independent distribution as we know it."

In his forum presentation McGinty will discuss the many ways various manufacturers are addressing this issue, including funding separate rental channels and investing directly in their distribution networks. "But one thing is certain," he said. "Alternative forms of distribution are likely to continue blossoming."

In his role at Credit Suisse First Boston, McGinty specializes in the machinery and engineering construction industries. Prior to joining the firm, he was a partner and member of the board of directors at H.C. Wainwright, a New York City securities firm. McGinty has been named to the Institutional Investor All-American Research Team for 25 out of the last 27 years.

AED’s Executive Forum is an annual day-and-a-half event where senior-level managers discuss strategic issues likely to impact construction equipment distribution in the next 1 to 5 years. The programming for this year’s forum, themed, "The Future of Independent Distribution," addresses the painful reality that market forces have changed so dramatically and quickly that the traditional distributor/manufacturer business model itself is undergoing scrutiny.

A fast-paced mix of panels and speakers, AED’s forum typically draws between 300 and 500 senior-level executives from construction equipment’s distribution, manufacturing and service communities.

This year’s programming looks at how distributor margins have steadily eroded in the past few years, as customers have more options in terms of how they acquire machinery and the services needed to keep it running. This dynamic is particularly hard on smaller dealerships that lack the resources to compete against larger, better-financed companies.

Forum sessions will examine such issues as the "unbundling" of traditional customer services, how distributors in comparable industries are creating profits, alternative forms of equipment distribution, cash flow strategies for tough times and ways CE dealers can improve the efficiency and profitability of their product support operations.

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