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Michael Kneeland, United Rentals CEO and president, on how the construction rental business has taken off in an uncertain economy.
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Well the current state of the economy many companies are choosing to rent construction equipment instead of buying it.
And this is meant very big business from my next guest company shares of United Rentals is search born -- 30% in January a company's rental rate.
Grew by 6% last year Michael -- and CEO of United Rentals joins me now first of all congratulations.
By that this stock of all fired a company is on fire.
What is -- about your business model that's so perfect for this time.
Well if you're right we did come off a very strongly airport what we're seeing now is -- uncertainty and the secular shift from people -- equipment.
And tight credit market and people shifting towards -- so once they get that in the rental product in their hands they see.
How personal -- is and how easy it is to do transaction.
They usually stay with us so we're seeing more of that.
So what you're suggesting is even -- the economy gets better the banks loosen up the -- a little bit and people feel like okay we've got money to spend.
They may just feel better -- and we your model in other words you -- they can do it and better economic conditions will continue to go ahead read from you guys.
Yes and that's proven in over history if you -- go back to 1993.
About 5% of everything that was manufactured went -- space today its estimate about 40%.
He compared that to what we see over and and UK in Japan where it's at 80% so we see that -- continue to move forward.
-- to any particular area Michael that's really put you know driving -- -- you guys have what over 3000 different pieces of equipment.
What's what's the hot net right now well obviously it's that it's that the -- its aerial.
We're platform -- forklifts.
It's all the things that you would see typically on any construction site and industrial -- So there's no one item that stands out we just see the categories in inside of you know certain segments that are stronger -- And if so funny because you know I've got recommending your stock on this show to my subscribers in my hotline service and people always I don't know what the behind I don't know -- know I don't know what the debt stock.
I must drive a couple pieces of your equipment every single day driving in a short commute from New Jersey to -- to the -- building I mean I think your stuff everywhere.
At the bar set pretty high right now I'm -- -- about the did this year next year because.
I got to tell you register below the street took a -- guys -- two dollars and 95 cents this year that's up from two dollars and 35 cents just a few weeks ago.
The next -- to look at free to do three dollars and 98 cents up all over a dollar from your previous estimates there's a lot of expectations that you got to continue to knock the cover multiple.
Well I as you know -- so we just came off a very strong and there are.
But we also anticipate in next year we're very optimistic about next year fact.
We actually several gonna spend about a billion dollars for new equipment to grow coupled with the fact we also announced in December the acquisition between us RSC.
So we see a lot of opportunity.
-- to play out over time and and and -- markets just beginning to recover.
This RSC.
That's a pretty big deal for you guys -- Anti trust anything like that could possibly pop up it's sort of come up the works a little bit there.
It's a great question and that we just we announced that we don't cleared Hart Scott rodino -- expired after thirty days but we do have some more regulatory with the Canadian -- commission competition bureau so those are things that we're focusing on.
It's -- take some time but we still anticipate closing this in the first half of this year.
Michael overall you know because you guys do business everywhere in every corner in this country -- -- overall.
About our economy do you think we're headed in the right direction you think maybe I -- -- smooth sailing but you think things are getting better.
Well our I would tell you don't when we go while we talk to our customers and we we -- about 2000 of our customers across North America our various sizes.
80% of them said they -- 2012 to be equal to or better than 2011.
To us to me that's in front of Bellwether for our industry's going.
I -- it's a right now you're -- so hot right now I think your biggest problem is probably be keeping the employees from looking at that it's stock quotes all -- long.
I think there congratulates buckle really reminded of -- -- and CEO of United Rentals.
