TOP 49ers Special Section | CMI

Construction Machinery Industrial

Equipping Alaska’s industries

By Tasha Anderson


ur number one priority is product support to the equipment that we sell and rent,” says Construction Machinery Industrial (CMI) President and CEO Ken Gerondale.

“Product support includes providing parts; it also includes the service, whether it’s the service for warranty or longer-­term maintenance; and then product support can also include having a large enough inventory of equipment in the state of Alaska to provide rental equipment or standby equipment in case a piece of equipment goes down.”

Ultimately CMI strives to be available with the right tools, the right people, and the right parts, anytime and anywhere in the state. On the company’s website there are phone numbers and email addresses listed for employees at each of CMI’s four branches, along with this simple reassurance: “Branch numbers answered 24/7.”

This commitment to product support is what Gerondale believes sets CMI apart. He says that most heavy equipment on the market, sold either by CMI or others in the industry, is of a good quality. The difference is how each dealer works with their customers and clients to make sure they get the most out of that equipment. “You hire good salesmen, and the salesmen will sell the equipment the first or second time—but when you’re selling it the fifth, sixth, and seventh time, you’re selling it because the support behind that equipment is what the customers are looking for.”

Ken Gerondale, President and CEO, Construction Machinery Industrial


Gerondale got his start in the industry running heavy equipment and ran and managed heavy equipment until he was about twenty-eight. “I was fully vested in the operating engineers union, and it was at that time I started selling equipment.” In 1985 he founded CMI with two partners. Today it continues as a family company, with Gerondale as the majority owner and a few other individuals owning smaller shares.

“Since we’re family owned and manage ourselves, we can make all of our decisions in Alaska,” Gerondale says, meaning there’s no waiting for decisions to come down the line from out-of-state ownership or out-of-state interests interfering with the decision-making process.

CMI carries Volvo construction equipment, Hitachi shovels and excavators, Epiroc underground drills and trucks and aboveground large drills, and Link-Belt cranes, along with various other smaller product lines.

The company provides services primarily to the oil and gas, mining, and construction industries, as well as local, state, and federal government. One contributing factor to the company’s commitment to always pick up the phone is its understanding that the industries it serves operate almost without pause. “Myself and the other managers here, we lead from the front. As the owner I’m fully committed to this company, and I work every day. Working with the mines and oil patch [companies] where it’s seven days a week and in a lot of cases twenty-four hours a day, we have to have the attitude that we are responsible and available.”

Gerondale’s hands-on attitude and experience with operating heavy equipment has been a boon in his endeavors as a dealer, and he looks for hard-working and honest employees with experience in mining, construction, or oil and gas. “Our parts manager in Anchorage [Scott Stowell] retired from Usibelli Coal Mine; our branch manager in Fairbanks [Wade Gies], he’s worked for Fairbanks Gold Mining, for Pogo Mine, and he worked in Africa for Kinross; so we attract and hire people that are specialists in the industries we support.”

Gerondale also makes himself available to customers and his employees in a concrete way. His favorite part of the job: “Getting out of the office,” he laughs. “Going to branches and visiting the customers at all the different sites. I’ve flown since I was sixteen years old, and there isn’t a week that goes by that I’m normally not in a plane at least for one day.”

CMI has facilities in Anchorage, Fairbanks, Juneau, and Ketchikan, all of which provide parts, service, salespeople, and rental fleets, but the company provides services across the state and is no stranger to operations in remote areas with little connecting infrastructure, as that’s where the majority of oil and gas and mining operations take place.

In addition to sharing a rural “workplace,” CMI has in common with those industries a significant challenge: operating within a state with a highly fluctuating tax structure and little predictability. “Predictability in any business is important, but in Alaska we’re really a very small economy; we only have 700,000 people, so if you don’t have predictability it’s a very challenging place to do business. We as business owners, to make decisions for the future, need to have a fairly good idea on what is going to take place from a tax standpoint and from a government attitude toward business and development standpoint.”

Next to that, Gerondale says that while moving equipment around the state requires planning, a more notable hurdle is product support—getting people and parts to the right places once the equipment is delivered.

“I don’t care what dealership you are, that’s the difference between success and failure: the support of the equipment that you sell.”

Gerondale says another significant challenge is finding qualified technicians, but that isn’t unique to CMI or even Alaska. It’s a nationwide problem for the industry. Advancing technology has made it even more difficult to find quality technicians.

He likens it to the automobile industry. “Anybody who has a modern car that they bought in the last ten years cannot go out and tune up that car themselves. You have to hook it up to a computer and you have to have the diagnostic information and the software to repair that vehicle. All of our equipment is managed by computers. We can even communicate with them through satellites and cell phones to troubleshoot them; they’re very complicated. Now technicians have to go out on the jobsite with tools in one hand and a computer in the other, and that’s really changed our industry.” In particular, sourcing young people with long careers ahead of them is difficult, but technicians of any age are in high demand.

Still, CMI generally tries to recruit employees within Alaska. “Any business owner will tell you, if you recruit outside of Alaska, your chances of that employee being with you in five years are not very good.” So the company focuses its efforts on finding and developing local talent.

CMI regularly reaches out to connect with high school students who are considering careers as technicians, mechanics, or related positions. The company also has an internship program and hires entry-level trainees to give interested young people an opportunity to gain experience.

“One thing that we’ve done pretty successfully is hire some kids that grew up in the Bush. They come in and get trained and we’ll hire them for two or three years.”

Gerondale says it’s a pretty common for those young people to return to their village or community after a few years, but he sees that as a benefit, not a problem.

“What we like about that is they’re used to maintaining and working with our equipment and they know the type of company we are, so that in itself also helps with our market share and being able to do more and more business all the time with the Bush communities.” It’s also a benefit to rural communities that may lack local residents with these kinds of technical skills.

CMI’s pool of employees has remained relatively stable for the last ten years or so, Gerondale says, from 105 to 110 employees. In the summer the company hires approximately 10 temporary workers, but otherwise the numbers remain fairly consistent. That remained true over the last few years, when many industries and companies lost a significant number of jobs.

“Our employees have been stable because we do not just sell equipment, we maintain it. We sell parts, we sell service, we sell rentals. When the economy comes down, especially with mines, they still have to mine, so what do they do? They can’t buy equipment so they have to maintain the equipment that they own, therefore they buy more parts, and they need more service support,” he says.

Another highlight and testament to CMI’s stability is the fact that the company has always made a profit, since its first year in business. The company has a strong balance sheet and has developed robust partnerships with several long-term customers. “There’s a rule in most business called the 80/20 rule: you do 80 percent of your business with 20 percent of your customers, and that holds true for us,” Gerondale says.

“I like to think we’re known for the support that we provide to people that purchase or rent equipment from us, but as important as that, we are very involved in the different communities around the state,” he continues.

CMI supports local education and youth programs, which provide opportunities for the youth and strengthens small communities. “As business owners we have to be willing to help younger people find jobs and get trained. At the high school level, there’s a very small percentage of effort put into career planning for people that just want to work with their hands.”

Many students (and adults for that matter) still associate blue-collar work with low wages and dangerous work environments. Rather, Gerondale says, “In Alaska there are so many high-paying jobs in the craft business. We’re not focusing on providing enough people for blue-collar type work.” At CMI, he sees an opportunity for young people to enter an industry that he’s invested in since his own youth. “That’s what we are here, from myself—who owns the company—on down. We’re just a simple, blue collar company,” he says with a smile.