Dramatic changes in world market forces, production technology, labor rates, and currency exchange rates have placed American producers of construction equipment and their domestic suppliers at a distinct competitive disadvantage. As a result, the industry is in a state of flux.
The relatively swift upheaval within the industry obscures the evolutionary aspects of change. The circumstances leading to the changes did not occur, as one might suspect, in a rapid-fire cause and effect succession of external events, rather a dramatic reduction in domestic demand.
From the perspective of a hydraulics supplier to the industry, this paper discusses the long-term causes leading to the current upheaval the industry is traversing. Also discussed are the effects of foreign competition on domestic operations and defensive strategic responses employed by US producers to that competition.
Finally, within a five-year reference period, the probable environment in which construction equipment companies will be obliged to operate is discussed.