Growing and Thriving in the Face of Challenges
When Meco Miami, Inc., was profiled in the August 2017 issue of Business in Focus, the heavy construction equipment rental and sales firm was said to be booming. And since then, things have continued to boom at the Miami-based business, which primarily serves contractors and construction firms.
“We represent two more companies now: Yanmar America and Bandit Industries out of Michigan. We’re really trying to aggressively acquire new lines of equipment so that we can grow our business as much as possible in South Florida and our overseas markets,” says Vice President Michael Vazquez.
An excellent economy has meant plenty of work for Meco, founded in 1972 by Michael’s parents, Alvaro and Lourdes, who remain active in the company. New challenges include uncertainty over federal infrastructure legislation and technological changes in construction equipment.
These issues aside, things are good. “We’ve grown our service industry, our parts business, our rental business, and our sales here locally since the last time we spoke two years ago,” says Vazquez.
Meco is an authorized dealer for equipment companies such as Dynapac and Atlas Copco from Sweden, Sany from China, and Mahindra from India which specializes in small tractors perfect for smaller agricultural settings. Bandit Industries excels at wood chippers, while Yanmar – with its parent company based in Japan – is well-regarded for its mini-excavators and mini-tractors. Meco Miami prefers to deal with foreign manufacturers because domestic makers such as John Deere and Caterpillar are already well-represented by other dealers in South Florida.
According to Vazquez, there is a growing trend among his clients toward renting equipment. “The industry has changed a lot. It’s changed from ownership to user-ship. Everybody is more interested in renting equipment than owning equipment. That helps out our rental fleet tremendously,” he says.
Beyond price, this trend is driven in part by worries about repairs, he notes. If you rent a machine, it is up to the rental company to provide replacements when something goes wrong. Should you own the machine, however, it becomes your responsibility to arrange repairs in the event of an equipment failure.
Vazquez estimates that rentals currently make up “about sixty-five percent,” of the company’s business, and the segment continues to grow. As he is quick to point out, however, “everything we have is for sale. So if someone rents something from us, if they want to buy it, they can.” Clients who rent gear are typically offered a rental purchase option. If they like the equipment, Meco can arrange for them to purchase it outright, deducting rental fees already incurred from the final sales price.
The firm houses its inventory in an equipment yard at a 2.5-acre compound. The compound also includes repair and maintenance facilities and space for office staff. Mechanics and technicians ensure that equipment is kept in pristine condition while a full-time product support manager conducts regular inspections.
This manager has to certify that all is well before a client picks up their gear or the equipment is shipped to a worksite. The same manager performs an inspection when equipment is returned to the Meco compound. The compound itself was recently given a facelift, with a new parking lot, paint job, and landscaping.
Excavators and road-building equipment continue to be the company’s most popular product offerings. The majority of the company’s business is conducted in South Florida, although it has been extending is market reach northwards to Palm Beach County and other areas. Expansion is due in part because, “Our products are very desired, especially Dynapac road-building equipment. It’s extremely popular here in Florida,” explains Vazquez.
Given this popularity, it is not a surprise that the company’s equipment has been used recently at some major construction projects in the Sunshine State. These projects include Miami International Airport, Fort Lauderdale-Hollywood International Airport, and Florida’s Turnpike system.
Meco Miami continues to sell equipment to clients in the Caribbean and South and Central America. One of the company’s biggest export markets is Venezuela, currently suffering from a collapsed economy and political turmoil. The company hopes oil prices rise and the political situation stabilizes in Venezuela so it can boost its trade in that country.
Meco Miami is also keeping watch on developments in Cuba, the country Alvaro and Lourdes Vazquez left in the early 1960s. A return to democracy in Cuba would be exciting on a personal level for the family while a resumption of economic relations with the U.S. might mean a new foreign market for the company’s equipment.
At present, Meco Miami has twenty-five employees, up from roughly twenty-three at the time of the last profile. The firm appreciates new hires who are loyal and hard-working.
“For us, it’s always about the integrity of the person, their honesty. We try to integrate [new hires] as best as possible to our culture, which is, telling everybody the truth and working as hard as possible. Making our customers as successful as possible by providing the best possible equipment at the best possible price, with great service,” states Vazquez.
The company is considering opening new locations, “probably in Palm Beach County. That’s a tremendous growth area for us. I haven’t organized a physical location there yet,” he continues.
Vazquez acknowledges, however, that such a move would entail a great deal of work. For decades, the firm primarily refurbished and constructed used heavy equipment to sell, mostly to foreign buyers. At one point, Meco boasted seventy-five employees, offices in other Florida locations besides Miami, and a trucking segment. Following market changes, the trucking segment was sold off, the company switched to being an equipment dealer, and operations were centralized in Miami.
This experience has made Meco Miami careful about launching new branches, even as the firm is eager to grow. “Honestly, it’s extremely complicated to find the right people, the right facility, and the right mechanics,” he says, about opening new locales.
Although expansion plans have yet to be fully sorted out, Meco Miami has been very proactive in terms of promotion, particularly online. “We’re very active on social media. I personally try to post five things a week on LinkedIn. Other people in the company use Facebook. We use Facebook Marketplace to advertise our equipment. We also use traditional print ads. We just hired a company to do an intensive advertising [campaign] for us,” he says.
Open houses represent a more old-fashioned means of promotion. Last fall, the firm hosted an event for then Florida Congressman Carlos Curbelo to showcase its equipment. Similar events are planned for the future.
Along with digital promotion initiatives, there has been a great deal of effort put into growing Meco’s e-commerce segment. “We have a new web page. We have very aggressive online marketing. We’re trying to think of the next five to ten years – what’s the market going to be like and how will people buy equipment? It seems like there’s more focus on smartphones and iPads and computers. Every day, we’re getting more and more leads through search engines than through traditional print ads or billboards,” says Vazquez.
While having a thriving online presence helps the bottom line, the firm still “has to have equipment at hand,” and maintain a brick- and-mortar operation, he adds.
Stalled federal infrastructure funding poses a challenge for the entire U.S. construction industry, which in turn poses a challenge to companies such as Meco which serve that sector. Infrastructure legislation has been a topic of much discussion in Washington, D.C. While everyone seems to like the concept, coming up with a realistic way to pay for an expansive infrastructure program has proven difficult.
To prompt some action on this front, Vazquez gave a speech this May to federal politicians in his role as vice president of membership with industry group Associated Equipment Distributors (AED).
“We talked about infrastructure. Everybody agrees that we need it, but nobody agrees how to fund it. It’s a $2 trillion infrastructure package that everybody agrees on, but nobody knows how to pay for it,” he says.
Beyond infrastructure, “our biggest challenge is finding technicians, mechanics. It’s a very big problem in our industry. It’s very difficult to find quality people,” admits Vazquez. The problem is twofold. First, there is an industry-wide shortage of skilled workers as young people shun the trades. Existing workers, however, find themselves increasingly confounded by high-tech equipment.
“Technology has surpassed the mechanics. Everything now is computer-driven: your fuel pump, equipment. All of it is [designed] for efficiency and contamination issues, but it’s extremely complex,” says Vazquez.
Still, he does not see such issues as major hurdles as the company approaches its fiftieth anniversary. “I think we’re going to continue growing, refining our customer base. I see our service industry really exploding. I think people are going to continue to rent more machines than buy them. I think the market here in south and central Florida is strong. The Florida Department of Transportation is doing a great job – building new roads, bridges, highways, airports. I think the next five years are going to be excellent,” he states.