The Heavy Equipment Podcast
Whether we're exploring the latest in equipment technology, talking about the trends that propel the industry forward, or uncovering stories about the dedicated individuals who keep the dirt moving, and wheels of America turning, this is where the roar of the engines and the pulse of progress come together. It is sublime. It is surreal. It's the Heavy Equipment Podcast ... with Mike and Jo!
The Heavy Equipment Podcast
HEP-isode 29 | Big Komatsu, Hemp, and John Deere Stock
On this second HEP-isode of the all-new second season, we ask the question: What if the future of heavy equipment didn't just mean bigger and better, but smarter too? We break down the innovations and hurdles shaping the heavy equipment industry, starting with the Komatsu 930e mining rig, talk through the contentious issue of marijuana legalization and its ramifications across the heavy equipment space, and shine a light on John Deere's recent layoffs in the face of a multibillion dollar stock buyback. All this and the biggest Big Boy of them all, on HPE-isode 29.
Welcome back to another thrilling episode. Episode two no, yes. Episode two of the Heavy Equipment Podcast.
Speaker 2:This is iconic.
Speaker 1:This is bad. It's the worst one we've ever done.
Speaker 2:No, it's going to be good, this is going to be good.
Speaker 1:This is going to be good. Speaking of things that are good, weren't you driving around in that new giant, giant kamatsu 930e mining rig this week?
Speaker 2:well, you know, really I'm doing the whole road show, uh, this week from the back bunk of a brand new mac but working on that and then, uh, trying to get that baby back to cleveland, get her set up, get her out on the road. But this kamatsu 930e I saw a video of this thing. We had a comment on this. The bet it's it's electric drive, like most of the big mining equipment is. But in the back there's a video going viral right now of them walking behind the thing and opening up the rear hatch. There's a radio playing in there and they're in there working on some stuff. I mean it's kind of neat that you could theoretically have a maintenance office in the back of a 930e. Yeah, it's got like a cooler lock on it. You know the stainless locks. You know like from jurassic park where they lock the velociraptor in there. But listen, it's truly built by kamatsu because it's not meant for no big boy.
Speaker 1:You're not going to have big al back there trying to rewire some four-odd gauge copper, you're gonna, but you can get a couple of dudes that are like five, four back there and they've got the repeated drills.
Speaker 2:They're happy.
Speaker 1:Exactly they got plenty of room I want to set up like a diorama in there. So somebody opens up that little maintenance hatch and there's like four taxidermy dogs playing poker around a table.
Speaker 2:That'd be badass actually.
Speaker 1:Pretty sick.
Speaker 2:Imagine opening up that door and they're all in there just smoking cigars and it's just a stream cloud comes out of there. Open up that door and they're all in there just smoking cigars and it's just a stream cloud comes out of there. And then you know, the one puts its paw, it's got a straight done. The bulldog tips the table over and walks over to his new mac nice.
Speaker 1:There's a gray hand in there. He's the bus driver.
Speaker 2:He was he was the bus driver they all got laid off they all got laid off.
Speaker 1:They're done it's bad out there, man, there's, there's a lot of layoffs in the industry right now and it's really weird right now. But it's weird because, like there's such a demand, I mean, if you go and try to buy a new, it doesn't matter what it is, doesn't matter if it's like a farm tractor or if you're trying to buy a, a medium duty or even a class eight. Everything is six months, 12 months, a year and a half.
Speaker 2:Yeah the demands there. People, people need these parts. I mean, for a good example, we ordered a set of hubs for a dump truck to switch them over from spoke or Dayton style spoke wheels and put actual hub pilot wheels on it. We ordered the parts a while ago. They had them in stock. It took them a couple of days to pull them, then realized that we needed more parts. We got parts of it in. Now we're still waiting for more bearings and more bolts. But it's like this. It's never ending anymore. It's horrible.
Speaker 1:So. But what is the point? Because I have a hard time reconciling the fact that vehicles are in demand, parts are in demand. You know we're constantly talking about how there's a labor shortage, you can't find good people, but yet it seems like every time you turn on the news the last two weeks you've got John Deere doing layoffs, you've got Caterpillar talking about layoffs. I mean, everybody's doing layoffs. How are you still in business, like the people that you had a year ago weren't able to meet demand and now you have less people. It's horrible.
Speaker 2:And I truly believe that it's a forced sustainability of backlog. Yeah, Because if you don't have the people and you slow the industry down, then you don't have to worry about running out of it in the interim of a slowdown. But we need people to work. You know, we had a big discussion about AI in the construction industry the other day. It's incredible. There's a million people within the construction industry that were I think it was a million people that were polled. They all believe that AI is going to replace them in one fashion or another, but yet we can't get enough people in the industry anyways. So AI is not going to replace anybody, right? If anything, it will help with what we got going on, because people hear about layoffs and they think, well, AI or robotics are going to, you know, are taking these jobs. That's why there's layoffs. No, actually we're slowing down, but I think it's kind of a forced slowdown because the demand's there. Everybody I talk to the demand is there. We need vehicles, we need cars, we need parts.
Speaker 1:I don't know.
Speaker 2:I don't know why, why we're doing that, but it's frustrating and everybody you talk to is frustrated about the whole scenario.
Speaker 1:Yeah, but I mean it's not a mystery why we're doing that right, like traditionally, historically, whenever you have a group of layoffs and I'm not talking about the last five, 10 years, I mean, if you go back to the eighties in general motors, whenever there was a round of layoffs, especially right before the end of a quarter, you would be able to show a forecast with reduced debt and higher projected income and it would goose the stock offering. And, just like we talked about the last episode, there are huge organizations, huge companies that are doing these stock buybacks to bring wealth into the hands of the shareholders. And that seems to be what's happening here, because you've got companies that can't build enough product, they can't deliver enough product to satisfy demand, but they're still doing these layoffs to boost up their stock price, depending on what conspiracy theory you believe this week.
Speaker 2:That's the problem with conspiracy theories, but some of that has to hold some weight. There's a lot of manipulation going on with the stock market right now. I don't care what anybody says. We've got trading that's being halted. We've got AI trading that's coming into effect, program-based trading that's going on, people tracking trading of you know government officials. Now there's so much going on that we can't we can't overlook it, but we also can't go down that rabbit hole that everything's fake. You know, it's the matrix we're all put on this planet to generate heat no, no, no, look, I'm not saying that's far extreme, but you know what I'm getting yeah, it's it's too extreme, but like I'm not saying that's far extreme.
Speaker 1:But you know what I'm getting. Yeah, it's it's too extreme, but like I'm not saying that we should get into this and start talking about conspiracy theories like they're real. But like, on the other hand, you know people who say I don't believe in any conspiracy theory. You don't believe in any conspiracy theory.
Speaker 2:No, everybody's got a conspiracy theory that they believe.
Speaker 1:Everybody's got a conspiracy theory dude, every single one of them. High school and college.
Speaker 1:in the 90s they used to talk about a conspiracy by the rope manufacturers to make marijuana illegal so people couldn't grow hemp because hemp ropes were like the best thing in the world and hemp oil was better for you know, for cooking and for lubricating and things like that, and the oil industry wanted to keep hemp down and that that's something that, like I think, sank in maybe not to me, but it sank in on a subliminal level, because you're starting to see all these different states, all these different organizing bodies kind of come around on this marijuana use and hemp use and now it looks like it's been reclassified as a what is it now Like a schedule two or something? So I guess it's like legal, but you can still be impaired if you're driving on marijuana.
Speaker 2:Uh, basically alcohol.
Speaker 3:Yeah, it's like alcohol.
Speaker 1:But that's a huge change for the industry, right, cause if you have an operator or a driver, you know and and there's some kind of accident, they always do a. You know, they always do a blood test. Right, but like alcohol, yeah, if I had a couple of drinks a night or two ago, that's going to be out of my system. But if I had some edibles at a concert on Saturday and I'm in an accident on Wednesday, that's still going to come up in my system. That's going to be a problem.
Speaker 2:Listen, it's a big problem and as these drugs get reclassified, part of the issue with that is if you're an operator, a union teamster and all that, you forego the ability to use any of that. Right, you literally sign away the option of using that because they are a drug-free employment agency, basically drug-free union, where it is a major problem and will become a major problem on heavy equipment, construction sites, heavy construction, industrial construction, whatever construction you're getting deliveries on and the guy pulls in with a box, trailer or a flatbed and he's got something for you to just make a simple delivery. If he is impaired and he has a problem, he has created a problem for your drug-free workplace on that site and you can't control that. Yeah, that's tough. So if we guarantee a drug-free workplace, we can only guarantee it as as our subs and our own employees and all that stuff, the same as any other contractor.
Speaker 2:But all these other guys that are running around and really you know the bad part is if you walk through I just I was just on the turnpike and if you walk through a rest area, you can smell it coming out of the trucks. Oh yeah, I walked past one today. You could smell it. I have no idea how you would be able to drive like that.
Speaker 1:Yeah, and he's barreling down the road at 90 miles an hour with 80,000-pound payload.
Speaker 2:Exactly so what good is that you know? Thousand pound payload Exactly so what good is that you know? It's no different than way past years ago. Guys used to go and get a 30 pack and sit there. They were stuck there overnight or stuck there for two days letting their log book reset, and they would drink a bunch of beer and get all up and think they were okay and leave and get in an accident and they were still impaired.
Speaker 1:Yeah.
Speaker 1:Now you got marijuana, so it's a fine line, and until we come out with a breathalyzer type way to test quickly saturation levels within people, it's going to be a little tricky yeah, but like, if you look at you know, like the nursing industry, things like that, we both got people in our lives and our families that are in nursing, that are in the medical field. There's a zero tolerance there. Do you think that it's realistic, in a field with such a labor shortage, do you think that it's realistic to say that you're going to have a zero policy? Dr Justin Marchegiani it's not Now.
Speaker 2:What we're working on is and we're no different than anybody else when does that apply Again, the level of which you have in your system, how long it was? You're trying to figure out that sweet spot of saying look, we know, people are going to go out over the weekend and do things. They need to be right when they come to work. When it comes to the unions, though, they really don't care. They're saying it's zero, you can send them in for a drug test, you get tested, you're done, you're going to go into a probationary period, you're going to do testing, you're going to do counseling and then you're going to go back out once you pass. All that. I don't know, maybe that'll transcend in the future. We have to figure it out as an industry. There really needs to be more round table discussion stuff going on with this, because there's a lot of little caveat points to talk about with it and, if anything else, just to stir up thought process and see where you want to get yourself to get a thought starter thing going.
Speaker 1:And with that here's the original preview for Cheech and Chong's up in smoke.
Speaker 3:In the thirties, laurel and Hardy were the kings of comedy. Then Abbott and Costello took the 40s and split their sides with laughter. The 50s went hysterical and broke up to the wild antics of Martin and Lewis. In the great tradition of these laugh masters of the past come two guys who are hysterically funny. They're Cheech and Chong, the comedy team that gave birth to rock comedy and in the process turned on a whole generation. Now it's time for the Cheech and Chong movie Up in Smoke.
Speaker 4:Is that a joint man? Go up in smoke, is that a joint man?
Speaker 1:Go up in smoke.
Speaker 2:That'd be a good trailer to put in right there it would be Now I mean talking about up in smoke, though I mean. So what? We got John Deere doing layoffs. They're moving jobs to Mexico.
Speaker 1:Yeah, that's what you know Pile of smoke and dust, they're gone. Yeah, and it's funny because John Deere is one of these companies that is not doing badly, like there is a little bit of a of a downtick from what they were doing a year ago and two years ago, but their profit margins are still, their profits are actually higher than they were. So this is yeah, because their per unit profit, per part profit, is higher. Yeah, remember man, a lot of this inflation stuff is like oh no, we have record inflation, but we also have record profits. Turn away, don't look at those. Don't look at my new yacht.
Speaker 2:Let's not talk about the bottom line. Let's talk about the inflation.
Speaker 1:That's it. Let's not talk about the John Deere CEO's $ four million dollar barn dominium mansion. That's not even his primary residence we'll uh no talk about these layoffs let's just stop behind the rusty palace.
Speaker 2:He just, he just stops there, he just stops that's his rest stop.
Speaker 1:He switches out to the uh, from the my bach to the f-150 harley davidson edition. That's more acceptable on the job sites. But listen, it's funny because we were just talking about this. We're talking about AI taking over and replacing jobs. Liebherr, which is one of the leaders in autonomous electric mining equipment. They're expanding their mines in Virginia and throughout the Northeast. They're adding 175 jobs to take care of the autonomous equipment. To basically just keep it clean, make sure everything's happy and copacetic, make sure the robots aren't about to flip out and take over the world.
Speaker 2:Lieber has always been a frontrunner in things like that. But this mining expansion that they're doing listen, 175 jobs. People are like that ain't nothing, it is a lot. It makes an impact in the mining system.
Speaker 1:When everybody else is shutting down, jobs it. That ain't nothing, it is a lot. It makes an impact when everybody else is shutting down jobs.
Speaker 2:It's a big deal Exactly.
Speaker 2:I'm wondering what the stats are. I'm trying to look them up for the John Deere exodus, but it goes back to what I've always preached, since the very early episodes, which people may peruse back to and check out on your own time the more we can do to create jobs in the United States, the more sustainable, or obviously our economy is. We need to figure out a way to work with all this and I think that that and again not to get all political, but I think that that's some of the undertow that you hear whether, no matter which side of the fence you're on or which side of the wall that you're promoting or which side of anything you're promoting, you ultimately want the same goal. You want to control inflation. You want to know that there's jobs out there which keep the economy moving. You want to know that whatever job you have that keeps your place going is going to be there. Yeah Well, that only happens when companies decide they want to be here and they want to do work here right now with the contractors.
Speaker 1:Right and it goes back to like what we were talking about before, that the goals of the people who are running the corporation, the goals of the shareholders who own the corporations, are not the same as the goals of like you and me and other hardworking Americans, and like the goal of the capital class is not the same as the goal of the working class. So I've got those stats from John Deere and I don't have them from any American paper. I got this from the Guardian, which is a UK paper. So John Deere reported a $10 billion profit in fiscal year 2023. This is after $7.3 billion in stock buybacks, by the way. So they took $7.3 billion that they could have put into a pension fund, that they could have put into a UAW contract, that they could have put into American jobs and American workers, but instead they did a stock buyback to boost the stock price. Then earlier this year, 2024, they cut 650 jobs at their plants in Iowa 500 jobs in Waterloo and 150 at the Anarchy plant, 250 indefinite layoffs from Illinois and 34 workers were laid off in Illinois in May.
Speaker 1:Now a couple of important stats there, and I don't want to pick on John Deere because I think you could pick any corporation that made these things public and you'd see something very similar is that there's all the money in the world for stock buybacks and for C-level executives and for company bonuses, and for C-level executives and for company bonuses, but when it comes time to shave money and cut the budget, there's no conversation about the multi-million dollar compensation packages for the C-suite. It's let's get rid of these 34 blue collar workers in Illinois and that's going to cover out and round out my bonus. So I'm upset by this because, I'll be honest, I thought better of John Deere.
Speaker 2:And that's what I'm saying. That hit it down the head when you say that you thought better of john deere. We thought better of general motors. We thought we were through. You know when people are calling government motors.
Speaker 2:Now you got john deere saying look, we're going to do a 7.3 billion dollar stock buyback. We're going to take our 10 billion dollars of profit which was caused by inflation. Yes, let's not lie about this, because they do a twice a year and they were doing quarterly. I've heard it's twice a year currently, price increase. So you're going to do price increases every six months and let's just say it was 12 months. And let's say that we did an annual price increase, which has happened as long as I've been buying equipment and been around equipment, parts and equipment pricing's gone up every year. It happens you took all that money to buy your stock back, which does what it controls the price Same thing we talked about with General Motors.
Speaker 2:So what's your end game? What are you trying to do? Why is everybody buying their stock back? Why is Caterpillar doing it? Why is John Deere doing it? Why are these companies saying you know what? We're going to swallow up profits earned. We're not going to build a new plant. Let's talk about that too. Imagine what the news breakdown would be if Caterpillar John Deere, komatsu, hitachi Deere any of those people I said dear twice because they're doubly important in this conversation at the moment I think you just left that alone instead of hung a lantern on it.
Speaker 2:Nobody would have noticed no, I know, but I needed to say it, but anyway, we got.
Speaker 1:Dear kamatsu, dear hitachi, leave here, I'll do it again I'll do it again.
Speaker 2:So let me tell you, imagine the news article and the strength of which it would be carried. This would be like the days of when paul revere rode with a message in his pocket talking about when the british were coming, and then we're trying to figure out if we're going to get wiped out by sea or by land. Yeah, this would. This would carry the same weight. If Caterpillar, john Deere, hitachi, komatsu, liebherr, any of those said we are going to put a four billion dollar plant on this planet and we're going to do it in North America, that would be on every news article we would be talking about. We would do that for a billion.
Speaker 1:They spent seven point three billion dollars buying their own stock back and then laying people off and shipping their jobs to Mexico, and then laying people off.
Speaker 2:Take $4 billion, build a plant, put another 300 people to work, 400 people to work to run some machinery processing centers that you know you need because you can't turn the parts out fast enough as it is, and every time you want to buy something you know you get told it's on back order.
Speaker 1:That is, and every time you want to buy something you know.
Speaker 2:You get told it's on back order. It's a. That's exactly. I'm tired of waiting on gaskets and o-rings too, so why don't you partner up with parker hannifin and uh hankle corporation and figure out how you're going to get us gaskets when we need them out in the field?
Speaker 1:they could send them out on uh bike messengers, like the guys you just got stuck behind in traffic today well, that was horrible.
Speaker 2:That's horrible. I, I don horrible. I respect bike riders because I ride a bike and real quick, I'm going to talk about that. I ride as much as I possibly can when you are in a class eight vehicle and you are cutting down a road and all of a sudden, all these bikes are on a road of which there is a bike path in a bike lane. I'm sorry, move over, not while you got to share the road. Now what happens if you get the Tour de France wannabes up there and somebody slips on a pile of dog crap and you fall underneath the front of this Mack? Now you got real problems. I got problems. Get in your bike lane, stay off the road.
Speaker 1:Now you got to do paperwork to get all that gunk out of from underneath your wheel.
Speaker 2:well, Let me tell you spokes and tires are not good. They're not good. Those are road crawls and those are expensive.
Speaker 1:Listen, if you think getting run over by a Mack Anthem is bad, have you seen this Union Pacific bad boy, the 4014?
Speaker 2:Oh, the big boy, the big boy, the Pacific big boy, that thing, I've always wanted to see that in person come storming through the West. They take it out every so often and do these historic runs with it. It costs them a fortune. It's a huge campaign for them. I think it's important. I think it's important to get that thing out, chug some steam through it, show that we know how to do stuff. And the attractive power of that locomotive is still incredible. It took him a long time to top the attractive power of that machine.
Speaker 1:Yeah, absolutely. I mean you can't say enough cool things about this If you're out in Wyoming June 30th, so it's going to kick off this weekend. It's going to go from Laramie through Whamsutter Green River into wells, nevada, carlin and battle mountain. It's going to go through, uh, colfax, california, lovelock, nevada, carlin, nevada.
Speaker 2:They're doing I want to get on a plane today and go see it, I do, I do too.
Speaker 1:They want. They're doing the whole western expansion, like that whole golden spike thing, and they're doing that whole tour. It's going to run a full month, from june 30th to july 26th. It's going to close off in Medicine Bow, wyoming, and it is a 1.2 million pound locomotive. And we're not talking about the train. It's not the train that weighs hundreds and hundreds of tons, it's the engine, it is the locomotive.
Speaker 2:That's what adds to its tractive power, exactly right, the weight and the connection of the steel wheel against the steel track. You need mass weight to do that. But that 4884 configuration was iconic because you got the front running. But then you have two individual sets of tractive powering drive wheels with a bogey wheel behind it. So if anybody hasn't seen it, you've got to Google this, you've got to look at it. And then the coal tender alone in the back is phenomenal. The amount of wheels and stuff on those trucks is incredible. Again, if you haven't, seen it.
Speaker 1:You've got to check it out. You've got to check it out. And for those of you who are wondering what kind of numbers we're talking about when Mike is talking about tractive power 135 000 pound feet of torque. That is not horsepower, because we don't move anything.
Speaker 1:Horsepower, we move no, but it does have 7 000 horsepower out of two engines. So it is a 14 000 horsepower machine making 135 000 pound feet of torque. I mean, you know, let's face it, if you put one of these motors in the back of a little vw buggy, it's gonna get down the road. You know, here's where we interject. That guy laughing is there. So you know, the big boy, the big boy restaurant, yeah, are there ads for that? Like old school big boy tv commercials oh, for the restaurant.
Speaker 2:I don't know if I've ever seen that we need to run an ad for the gandhi dancers there's a, there is a bob's big boy 1984 commercial. Oh, it's perfect speaking of big right before terminator.
Speaker 1:Yeah, speaking of big boys, we've got this. Uh, we'll close out with the Bob's big boy commercial from 1984. We'll run that.
Speaker 2:That's awesome.
Speaker 4:Way back in the thirties, bob's invented the double deck hamburger. We called it the big boy. Some folks call it a meal in itself. A few years later, we added even more and called it the Big Boy Combo, with french fries and a crispy green salad. Today you can enjoy this famous combo at a special price of only a dollar ninety-nine. And isn't that good news? And Bob's Big Boy? We love good food, just like you do.
