Volvo buys

Volvo concluded the acquisition of Ingersoll Rand’s road-development equipment division, other than operations in India which will reportedly follow shortly. The transaction was initially announced on February 27, 2007. Ingersoll Rand’s operations in road-development equipment comprise soil and asphalt compactors, asphalt pavers and milling machines as well as material handling equipment such as telescopic handlers and rough terrain forklifts. As previously reported, the purchase consideration for the assets amounts to about $1.3 billion. Ingersoll Rand’s road development division – with production facilities in the U.S., Germany, India and China – is headquartered in Shippensburg, Pa., and has about 2,000 employees. Operations posted sales in 2006 of $864 million, with operating profit of $101 million. Your comment?

Construction materials rise again

Rapidly rising world market prices for cement, metal, oil and natural gas drove the prices of construction materials delivered to job sites up 1.2 percent in March 2007 and 1.6 percent year to date, a nearly double-digit annual pace, according to Reed Construction Data's latest report. This inflation pressure was aggravated by very tight supply conditions for materials used in the booming non-residential building and heavy engineering construction markets. A few more months of high inflation should be expected before slowing economic growth, both in the U.S. and abroad, relieves the strain on capacity in auction markets for commodities and leads to significantly lower materials price inflation later in the year. According to the latest report, construction aggregates were up 0.4 percent over the previous month, 4.7 percent versus three months ago, 9.5 percent over a year ago and a whopping 26.5 percent over three years ago. Your comment?

House panel rejects cuts

According to NSSGA, at a hearing last week, members of the House Transportation and Housing and Urban Affairs Appropriations subcommittee soundly rejected administration proposals to cut spending for transit programs and RABA (Revenue Aligned Budget Authority—the mechanism by which revenues flowing into the federal Highway Trust Fund are aligned with revenues flowing out). The cut has been cast as an attempt to keep federal spending to a 1 percent growth rate across the department, and hard choices were necessary to accommodate this goal. Further, administration witnesses also cast the RABA cut as an attempt to protect the Highway Trust Fund (HTF) from insolvency. Subcommittee chairman Rep. John Olver (D-Mass.) noted that appropriators are mandated to meet the spending allotments set by the SAFETEA-LU, otherwise the spending bills will be subject to a "point of order" on the House floor. A point of order could force the bill to be sent back to the committee and ordered to comply with spending guarantees included in SAFETEA-LU before it could be brought back to the House for consideration. Olver disapproved of the cuts to transit programs because they disproportionately hit the New Starts program, which supports fixed guideway transit systems like commuter rail. Olver also objected to eliminating RABA funding in FY ‘08 and reprogramming $175 million from prior transportation authorization bills to fund the department’s congestion initiative. If tax receipts into the HTF are above projections, RABA kicks in and one-half of the funds are mandated to be allocated during the next fiscal year. The level of RABA for 2008 is $631 million. Your comment?

Fatality!

On March 30, 2007, a 34 year-old dredge operator, with 16 years mining experience, was fatally injured at a dredge operation. The victim was correcting a problem with the deck mounted suction winch when he fell from the dredge. He was found floating in water behind the dredge. There were no eyewitnesses to the accident. read the full report here. Your comment?

Up, up, up

Home building ticked up unexpectedly in March, according to an article on CNNmoney.com, but economists cautioned that a look inside the numbers shows the worst is far from over for the battered housing sector. Housing starts rose to an annual pace of 1.52 million in March, the Census Bureau reported, from a revised 1.51 million rate in February. Economists had forecast the pace of building would slow to a 1.5 million rate in March. Housing starts and permits showed an increase in March, but the report may have been distorted by the effect of weather in the Midwest. But most of the country saw a decline from February's pace of housing starts. The South, which accounts for about half the nation's home building, showed a 3 percent decline, and building fell nearly 8 percent in both the Northeast and West. The exception to that trend was the Midwest, where starts jumped 44 percent in the Midwest after a February reading that was the slowest in 16 years. Bad weather in the region in February and relatively good weather in March probably played a role in the jump, as builders tried to catch up with delayed projects. Your comment?

Award winner

Pit & Quarry columnist Ellen Smith's Mine Safety and Health News has received the Sigma Delta Chi Award from the Society of Professional Journalists for Public Service in Newsletter Journalism for coverage of the Sago Mine Disaster. The Sigma Delta Chi Awards date back to 1932, when the Society first honored six individuals for contributions to journalism. The current program began in 1939, when the organization awarded the first Distinguished Service Awards. These awards later became the Sigma Delta Chi Awards. Mine Safety and Health News staff, Ellen Smith, Melanie Aclander and Kathy Snyder will be presented with their award July 20 during the annual Sigma Delta Chi Awards banquet at the National Press Club in Washington, D.C. “These awards represent the best of American journalism,” said SPJ President Christine Tatum. “In an age when it is increasingly difficult to differentiate between fact and opinion and news and entertainment, the outstanding work of these journalists is a powerful reminder of the importance of ethical and responsible news gathering that is of true public service. This award winning work is what all journalists should strive to deliver every day.” Congrats to Ellen and her fine staff. Your comment?

Not so fast

Just when you thought Cemex-Rinker was a done deal. Rinker's third largest shareholder, Australian Foundation Investment Co., (AFIC) has reportedly rejected outright Cemex's sweetened takeover offer. AFIC which holds 6.5 million Rinker shares, has for awhile been sending signals that it would like to see the hostile takeover bid fail. AFIC is also reportedly encouraging other major stakeholders to rebuff Cemex's revised offer. Analysts say Argo Investments, Rinker's number four shareholder, is also in no hurry to accept the revised offer. The chances of a rival bid are highly unlikely, given that Rinker's board has already explored alternatives including private equity funds and corporate restructuring. Company financial reports due in May could play a role in how this all pans out. Your comment?

Cemex ups the ante

Cemex has upped the ante. The Mexican company has raised its bid for Australian rival Rinker Group by 22 per cent to $14.2 billion, in a move which has reportedly won the backing of the Rinker board. Should the deal go through it will provide Cemex, the world's third largest cement maker, with a bigger slice of the U.S. market, while also establishing a foothold in Australia. It would also be a record deal for the Australian market. Rinker does a large portion of business in the U.S. market and the downturn in the North American housing sector has affected business confidence. The situation has contributed to making Rinker less attractive to other potential bidders, acccording to stock watchers. This one isn't done yet. Your comment?

Construction market loads up

There are signs the construction market is loading up workers to meet coming demand. Construction accounted for nearly one out of three net new jobs in March--56,000 out of 180,000 in the entire nonfarm payroll sector, even though the industry represents less than 6 percent of total employment, according to Ken Simonson, chief economist for The Associated General Contractors of America. "But the real news lies buried deeper," Simonson said. "The three categories of nonresidential construction--nonresidential building, specialty trade contractors, and heavy and civil engineering--have added 3.4 percent to their ranks over the past year. That is more than double the all-industry rate of 1.4 percent. The 146,000 nonresidential construction jobs added in that time outpaces the 125,000, or 3.6 percent, lost in residential building and specialty trades. I expect nonresidential hiring to continue, if companies can find qualified workers. Costs are a significant concern, however, especially for public projects. More worrisome are recent jumps in prices of steel, stainless, copper and diesel fuel. Materials and components are likely to wind up the year at least 6 to 8 percent higher than in December 2006." Your comment?

Fred Flintstone is alive and well

Interesting that the Birmingham News is using the old Fred Flintstone analogy in its intro to an article about in-state megaproducer Vulcan Materials. I thought that cliche long ago went the way of the, well, of the dinosaur. Must have been written by a rookie reporter who thought she was using that one for the first time. The good news is, the article focuses on Vulcan's use of equipment and technology at its operations. Check it out. Your comment?