Equipment Auctioned Rather Than Upgraded in California

Ritchie Bros. Auctioneers reported that the California Air Resources Board's proposed regulations for off-road diesel-fueled equipment generated additional consignments at its Los Angeles auction site. The three-day auction, held May 22-24, had more than $41 million in gross auction sales and featured more than 2,900 lots from more than 500 consignors • a new site record for lots and sellers.

Additionally, nearly 2,600 registered bidders from 40 countries, including 43 U.S. states and all 10 Canadian provinces, attended the auction either in person or via the internet. Close to 800 of the registered bidders participated in the auction live and online, using the Company's online bidding service, rbauctionBid-Live, and more than $12 million worth of trucks and equipment was purchased online by 181 internet buyers.

Under the California ARB “Diesel Risk Reduction Plan,” which was discussed at the board's meeting last Friday, the regulations are intended to reduce diesel particulate matter emissions by 75 percent by 2010 and 85 percent by 2020. If the vote passes, 180,000 off-road diesel vehicles in the state will have to be retrofitted, re-powered, or replaced at the expense of the equipment owners.

“Our customers know that our auctions attract bidders from across the country and all over the world,” said Richard Aldersley, Ritchie Bros. regional manager. “Many equipment owners are choosing to sell with us rather than paying for expensive upgrades or scrapping their equipment. Using other asset disposal methods in the local market under the proposed regulations, that equipment may be devalued. We transcend those local market conditions. In their current condition, many of these pieces of equipment still have a long useful life in other markets.”

Several million dollars worth of equipment came from Skanska USA Civil, a leading provider of construction services in the United States. “We're not fighting the new ARB regulations; we're moving forward with the times,” said Lloyd Smith, senior vice president of Skanska USA Civil. “But the proposed regulations certainly accelerated our plans. We need to be updating our fleet with newer equipment and selling some of the older equipment in preparation for the regulations that are coming down the pipe, so we put a lot of equipment in this sale rather than spreading it out over months."