Highway Equipment Celebrates 75th Anniversary

Tue December 23, 2008 - Northeast Edition
Mary Reed



In 1933 Daniel L. Reynolds Sr. got married — and co-founded Highway Equipment Company more or less by accident.

That year saw unemployment during the Great Depression reach its peak, with one in four jobless and the same number facing cuts in their hours and wages.

Thousands lost or left their homes and sought jobs wherever they could find them, walking, hitching rides on trains, or driving as long as their vehicles and gas money held out. By 1933, construction had fallen more than 75 percent since 1929, with a corresponding drop in associated industries such as steel and parts manufacture, as well as trades connected with the building industry.

At the time Daniel L. Reynolds Sr., known as Lee, and J. F. “Doc” Docherty worked for Jaeger Machine Company, which manufactured road building equipment. Lee Reynolds was a salesman and Docherty was Jaegar’s service engineer. They both lost their jobs.

Lee Reynolds’ son and current CEO Daniel L. Reynolds related what happened next. “After they lost their jobs they called the owner of the company and inquired as to how he intended on selling his products without a salesman. He replied that he did not know. Mr. Reynolds and Mr. Docherty asked him if they could sell it on a commission only basis and this offer was quickly accepted by the company. I think without knowing it they started a company!”

Reynolds Sr. and Docherty rented half an office in the Grant Building in Pittsburgh, hired a secretary and went to work.

Despite the difficult economic conditions under which it was founded, Highway Equipment Company flourished and is now run by the third generation of the Reynolds family. Headquartered near Zelienople, Pa., the company recently held two open house parties to celebrate its 75th anniversary.

The fledgling company received a boost to its business by the 1936 Pittsburgh flood, which overwhelmed the city on St. Patrick’s Day and allowed Highway Equipment the opportunity to provide men and pumps to assist in clearing floodwater.

According to the March 20, 1936, issue of the Pittsburgh Sun-Telegraph, the water crested at 46 feet. The downtown area alone suffered at least $35 million in damage. Clean-up operations presented massive challenges in a situation further exacerbated by fires breaking out, including one where 300,000 gallons of oil blazed at the Waverly Oil Works and another in which a number of residents died in houses that caught fire after the Etna Forging and Bolt Company across the way exploded.

A further serious consideration for workers was the warning sounded by the Red Cross that even as the water receded it remained a dangerous threat to health. Aided by 3,000 National Guardsmen, the police kept the general public out of the flooded areas, but Highway Equipment housed its men in a downtown hotel so they could be available 24 hours a day.

The following year, after a short stay in the Oakland section of the city, the company moved to a facility across the street from Forbes Field. It was their first location to have a sales office, service facility and a parts department. Their first fleet of trucks was purchased at the same time.

In the late 1930s, Highway Equipment Company expanded further after it was appointed to the Allis-Chalmers dealership for western Pennsylvania. “Highway went on to enjoy great success with Allis-Chalmers and its successor, Fiat-Allis Construction Machinery Corporation,” noted Daniel L. Reynolds. “At one point, Highway was Fiat’s largest worldwide distributor and the number-one dealer in the United States for 16 consecutive years.”

In 1944, the company opened its first branch office in Harrisburg, Pa. Later the branch became a separate company, Highway Equipment & Supply Company, and was sold to a member of the family.

Highway Equipment Company relocated again in 1948, moving to the East Liberty area of Pittsburgh. The company now operates its rental business, Machinery Rental, from that location. Machinery Rental specializes in the rent-to-rent market with a focus on smaller construction equipment, tools, and supplies such as skid steer loaders, mini-excavators, light plants, generators, water and trash pumps, air compressors and tools, concrete equipment and much more.

Sales Manager Brian McKinney worked for Machinery Rental for two summers while he went to college. He joined Highway Equipment Company in 2006 after working for the world’s largest auction company.

“Working at a dealership has been exciting. We have a great sales team here. I feel that we have grown quite a bit in this market with our products,” he said. “Our market share increases are evidence of this — and we know that there is still a lot to accomplish. The customers are terrific and I really enjoy working with them, too.”

The 1950s were a time of tremendous growth, due to a booming housing market and a strong industrial base in the area. The year 1950 was a banner one for Highway Equipment Company. It was the year they developed, modified and sold the first hydraulic front-end loader for a steel mill application, the first of many crawler loaders sold to mills. Ten years later the company sold the first remote-controlled crawler loader for open hearth operations.

During the 1950s, the business continued to flourish, opening branches in DuBois and Erie, Pa. After 18 years in the Erie location, the company moved 15 miles south to McKean, Pa. In 1959, the company became an authorized dealer for Rogers Brothers trailers and in 1961 for Gradall products. In the latter year, the company built a new parts department building to house its increasing inventory of spare parts, whose value ultimately reached the $10 million mark.

Daniel L. Reynolds recalled that he “just grew up” with Highway Equipment Company. After holding part-time jobs while in school he began working for the company part-time in 1959, and went to full-time employment two years later. He has now served the company for 47 years.

Co-founder Docherty passed away in the 1960s. His interest was purchased from his estate, so that today all ownership rests with the Reynolds family.

Highway Equipment Company is now among the nation’s leading distributors of mining, quarry, construction and material-handling machinery.

However, the company has not always experienced smooth sailing, as Daniel L. Reynolds recalled. “After losing our major vendor in 1991 — they quit doing business in the United States — I am proud of the way we responded as a company. We had to make some tough decisions but managed to turn the ship around and aim it in another direction, and today my son, Tom, and the other managers are doing a great job propelling the company forward,” he said.

Today CEO Reynolds is only involved in major policy decisions. His son, Thomas H. Reynolds, a graduate of the University of Notre Dame, is president and oversees the day-to-day running of the company.

“Before I joined the company, my first job was that I worked in politics for George Bush. Then, I worked in international trade for two years,” Thomas H. Reynolds said. “During that experience, my father and I discussed what my role at the company could be and how I might be able to add value. It was apparent that there was a great opportunity to join Highway.”

The younger Reynolds is currently serving on the 2008 Future Leaders Task Force of the Association of Leaders in Equipment Distribution (AED). The AED describes the mission of this task force as, among other aims, developing recommendations in regard to participation and membership of the association.

In 1970, the company moved to its current 60-acre headquarters between Zelienople and Cranberry Township, Pa., where a 120,000-sq.-ft. facility was built to enhance the company’s ability to supply parts and service. “A special emphasis was stressed in the design of the new headquarters to house state-of-the-art work areas for our engine, transmission and hydraulic repair and rebuild departments,” said Daniel L. Reynolds. “We purchased new equipment to repair injection pumps, turbochargers and electrical components, plus we designed our own machine to rebuild hydraulic cylinders. This location gives us the ability to inventory a large number of machines, and it provides our customers a place to demonstrate equipment in real work applications.”

Product Support Manager George Morrow is responsible for all parts and service operations. He had been in the construction equipment business since graduating from college in 1970, working for a manufacturer and two different dealers in all areas of parts, sales and service. “I started to work for Highway the second time December 1, 2007,” he recalled.

Describing his department, Morrow said the company strives to provide the best support for the products they sell and to be the best in the industry at that task.

Of particular interest to customers is the company’s Equipment Service Plan, or ESP, a comprehensive preventative maintenance plan individually tailored to clients’ equipment. Under this program, work can be carried out at any time of day or night on a job site or on Highway Equipment’s premises, affording customers significant savings by alleviating the need to own appropriate tools and equipment or to employ personnel trained in their use.

Parts Manager Ron Kratsas began working for the company in 1973 after teaching high school English for three years. He is in charge of all phases of the parts operation, including the branches.

“I was always interested in retail sales and when I joined Highway it was a natural fit,” he said.

“The parts staff averages about 24 years with Highway,” he added. “This stability in the department and the experience we offer the customer makes for a smooth operating department, which is a benefit to our customers.”

“We have recently expanded our after-market parts selection for all major lines of equipment and we currently offer used and rebuilt parts to lower the costs of operating equipment, as well as participating in all factory rebuilt exchange programs,” Kratsas added.

The company has more than 1,500 rebuilt parts in stock, including items for Kobelco excavators and Fiat-Allis and Kawasaki wheel loaders. It also can provide used or rebuilt engines, transmissions, and converters for Fiat-Allis equipment and arms, booms and rebuilt engines for Kobelco machines.

In the late 1970s, the company was appointed a dealer for Allied Steel & Tractor, now known as Allied Construction Products LLC, and added Hy-Ram hydraulic hammers, Ho-Pac hydraulic compactors, Hole-Hog underground piercing tools and other Allied products to its line. In the years since then Highway Equipment Company has become a distributor for Kobelco America’s hydraulic excavators and Kawasaki wheel loaders, as well as adding Sakai equipment to its compaction rental fleet and becoming a full-line dealer for New Holland Construction. In 2005, Highway Equipment added Moxy trucks to its other offerings.

Kobelco equipment is a popular line carried by the company, so much so that it recently sold its 1,000th Kobelco excavator.

Highway Equipment Company also offers rentals of new and used equipment, parts and attachments as well as various financial services.

President Thomas Reynolds described future plans for the company. “We will grow further. We look at opportunities that are organic and those that come through acquisition. We have looked at expansion in the Midwest and eastern United States. Further, we see opportunities to grow a highly valuable segment of our company, which is dedicated to servicing power plants. We seem to have a real knack for being able to keep our customers satisfied; however, we will never take customer satisfaction for granted. Every day we strive to make our product support better and better.

“Our customers’ success drives us. It is their success and profitability that is responsible for Highway’s longevity and achievements. We thank all of our customers for their business over the years.”

(This story also can be found on Construction Equipment Guide’s Web site at www.constructionequipment guide.com.) CEG