Jim Peterson started in the equipment business in the early 1970s as a field sales rep for Caterpillar. He joined Minneapolis-based Metroquip, one of the top aerial dealerships in the upper Midwest, in 1988, as general manager. He later acquired the company and turned it into a regional rental company. Peterson sold Metroquip to Rental Service Corp. in 1998. In 2000, Peterson joined with several other investors to help found National Service Centers, Maple Grove, Minn., an equipment repair business serving manufacturers, dealers, rental companies and end users. A part owner of NSC, which opened for business in Feb. 2000, Peterson now serves as vice president, corporate development. He recently sat still for this interview with RER.
RER: What convinced you that a stand-alone third-party repair business could be successful?
Peterson: One of the most compelling reasons was that all day at Metroquip and RSC we took calls from customers who bought their equipment from us or from other places but couldn't get repairs. We worked on their JLGs or Mayvilles or Sullairs, and they were asking for field service or shop repair for other machines. Customer service and support, maintenance and repair was a constant need for so many. As a rental center, we limited allocation of customer repair to about 20 percent. We tried to juggle fleet needs versus the demands of end users, and, unless they were a target account, we had to tell them we'd try to get to it, but could rarely offer them our best service. So we'd been in the trench answering phones, belly to belly with rental customers who still owned a few pieces of equipment and always talked about the need for service.
As [former Metroquip and RSC official] Garth Landefeld made the decision to start this business, we looked at local dealers' parts and service volumes, and we looked at machine populations and estimated the potential in Minnesota alone for parts and service in light and general equipment. It got to be some big numbers. So it was a combination of our experience and our research that compelled us to say it was an idea whose time had come.
RER: Were you correct? Has the time come?
Peterson: So far, it's going well overall, but we're still in the proof of concept phase. It's a new business concept in that we don't rent or sell, we just repair and maintain. So it's a dual challenge, trying to launch a new business and sell a new concept. Once we explain ourselves, people generally think it makes sense, and tell us that they've been looking for it.
We're going after small fleets, 15 or more machines of the type we target, which is light and general equipment from backhoe loaders and rough terrain forklifts, scissors and booms on down, to light, hand-guided compaction, jacks, pumps, and small generators. We're not after big track-based earthmoving equipment. People tell us that we respond for a field call in one or two hours, but it took them four days to get a dealer out, so we're very encouraged. But we still have to get through our first winter.
RER: What are some of the obstacles to success that you have to overcome?
Peterson: An interesting challenge is obtaining parts. Some manufacturers have been wonderful to work with because they can't get enough support for their products through their dealer network. We're pursuing manufacturers we weren't buying parts directly from, that we couldn't buy dealer net from. We sent them letters, we followed up with phone calls. We got mixed results. The good news, they told us, is that if we were truly national with a network, that we would be the answer to their prayers, but we're only a single location in Minnesota, and they do have dealers.
Our goal is to service a cross-section, all brands and types as opposed to being a dealer or representative of specific brands only. Most manufacturers, however, have been very willing to work with us and sell us parts.
RER: Who are most of your customers?
Peterson: Some manufacturers have asked us to do preparation for their distributors and to handle warranty work. We're having a good dialog with many of them. We're talking with local rental companies about pilot projects, more reconditioning than remanufacturing.
At this point, we're mostly getting end users such as specialty trade contractors, which is the segment of the business where we came from.