Congress' failure to renew the federal highway program has real economic consequences for Texas and the rest of the country, construction equipment industry leaders said at a rally today at San Antonio’s Henry B. Gonzalez Convention Center.

The event was part of a campaign called Start Us Up USA! Organized by the Associated Equipment Distributors and the Association of Equipment Manufacturers.

Following the rally, a caravan of trucks carrying large pieces of construction equipment idled by the industry depression and draped with banners made its way through the streets of downtown San Antonio.

AED and AEM are seeking to draw attention to the economic crisis facing construction equipment distributors and manufacturers, as well as the consequences of Congress' failure to reauthorize federal highway and transit programs. According to a recent study by IHS Global Insight, since 2006 the U.S. equipment industry has lost 37% of its work force and 40% of its economic output. All indications are that construction industry business conditions are getting worse.

The most recent federal surface transportation law, expired at the end of September 2009, and neither the House nor the Senate has made headway on a reauthorization bill. As a consequence, the highway program is operating under a series of short-term extensions that have added to historic volatility in the construction markets.

"States can't plan and contractors don't know how much work will be coming down the pike," AED President and CEO Toby Mack said. "As a result, they're sitting on their hands and not investing in new equipment. That's killing our industry."

"We're not asking for a handout like the ones Congress gave the auto industry or the financial services sector," AEM President Dennis Slater said. "We're just asking Congress to do its job and make highway reauthorization a priority."

Bennett Closner, president and CEO of Closner Equipment Co., Inc., a San Antonio dealer, said that since 2006 Texas has lost more than $11 billion in economic activity because of the equipment industry downturn, the biggest loss of any state. And Texas is second only to California in equipment industry-related job losses, with more than 53,000 layoffs in three years.

"I've listened to friends and colleagues agonize over the difficult decisions they've had to make about their businesses. Almost all have had to lay off valued workers, many have closed one or more of their facilities, and some companies have shut their doors altogether after several generations in business," Closner said.

Peter M. Holt, CEO of San Antonio-based Holt CAT, told rally attendees that local equipment dealers have experienced a 70% drop in new machine sales from 2008 levels. He said that the most debilitating impact of the downturn for his company has been a 25% reduction in employment.

"Our remaining employees have made sacrifices in pay and benefits to enable us to stay profitable, and plans for several new store locations were canceled," Holt said.

According to Holt, the economic crisis and uncertainty surrounding the highway bill are also taking a massive toll on local contractors. "Our customers who do highway construction have laid off thousands of employees. Many contractors are still reducing their work forces and their equipment fleets. The rapid drop in value of used equipment has also had a drastic affect on the equity of most contractors, resulting in a reduction of both borrowing and bonding capacity," he said.