Lessons from the Airline Industry to the Rental Industry

Feb. 1, 2017
With Mike Watts' departure, a new era begins for Sunstate Equipment.

I received an e-mail from Mike Watts recently telling me he was retiring after 40 years with Sunstate Equipment and 46 years in the rental industry (see Industry News). For those of you who don’t know Watts, he’s been one of the most respected people in the rental industry for a long time and I’ve heard people express admiration for Watts from many different levels in this industry, from owners of small rental centers to yard guys and mechanics, and owners and executives of large companies as well.

Somewhat coincidentally I got the idea to write this while getting ready to board a Southwest Airlines plane. When I visited Watts and Sunstate in Phoenix in late 2008 for an RER story, he told me about a Sunstate motto – “The Plane is Leaving”, which had to do with Southwest. When that airline was relatively small and just starting to compete with much larger players, it was decidedly no-frills (still is) with low fares. To be successful it had to be efficient, and its way of doing that was to get planes in and out quickly. The more flights they could get in in a day, the better it would do. Get people on and off quickly, clean and service the plane quicker than anybody else and then get the next load of passengers on because “the plane is leaving.” 

Southwest did it with humor and they made it fun. I don’t know that the Southwest Airlines style of humor was adopted by Sunstate, but the basic philosophy was somewhat similar. Get the equipment delivered quickly, pick it up quickly, service it quickly and get it back out on rent fast.

Sunstate Equipment Rental became a major regional player very quickly. Growth for its own sake was never the goal. Serving customers and being profitable was more important than being big. 

Watts will continue as an adviser to the board but essentially he is retiring, turning over ownership to Sumitomo and the reins of leadership to his son Chris, who has already been CEO for a while. I got to know Chris Watts a little bit and found his philosophy to be interesting as well. Chris grew up around the rental business just like many sons of rental company owners, but he wasn’t just handed the job. 

After spending summers working just about every imaginable job for Sunstate, Chris went away to college, thinking he would get as far away from the family business as possible and make his own way in the world. He got an MBA after an undergraduate degree in environmental studies and worked for an environmental consulting firm. He did Phase One assessments for property transactions, learned about soil and groundwater contamination, environmental assessments and more.

Later Sunstate needed an environmental compliance manager to deal with property transactions and the company’s own hazardous waste management. So Chris saw that he could really bring something to the company and rather than feel entitled as the owner’s son, he brought something to the table that the company needed. Eventually he worked his way up into a management role, became president and chief operating officer and now CEO.

So a new era begins for Sunstate. The company has usually been on the cutting edge in a lot of ways so we’ll expect to see that continue.

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In another major story in Industry News this month, United Rentals begins 2017 with a major acquisition, that of NES Rentals, No. 11 on the RER 100.  NES, founded shortly before United, has converted itself in the past decade into a primarily aerial work platform rental company. Just as Sunstate Equipment Rental took some of its philosophy from Southwest Airlines, NES CEO Andrew Studdert took much of his orientation from the airlines industry as well, having worked for years as one of the top executives of United Airlines. Studdert, very active in the International Powered Access Federation, infused NES with a tremendous emphasis on aerial safety, taking much of his philosophy from the airline industry. If an airplane is unsafe, hundreds of people may die. While an AWP accident might not kill hundreds, it can kill a few and there is no reason to ever allow that to happen. We salute the rental industry for its continued growing concern for safety.

About the Author

Michael Roth | Editor

Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.