Ex-Terex chief offers candid take on transportation infrastructure funding

Sources: Association of Equipment Manufacturers, Milwaukee; CP staff

Agency, academic and private-sector officials assessed long-range infrastructure planning against demographic changes, technology developments and funding mechanisms during a Northwestern University Transportation Center-hosted symposium, staged to release the Association of Equipment Manufacturers-commissioned “Mobility 2050” study.

Victor Mendez

“For the future, we need a vibrant and diverse workforce. It is important to think about designing, building and operating systems from coast to coast for people who are going to use them on the ground,” said U.S. Department of Transportation Deputy Secretary and Chief Operating Officer Victor Mendez in a keynote. “We have a growing population, higher freight volumes, [and] must factor changes in urban and rural settings.”

He cited the DOT’s 2015 “Beyond Traffic” report, which outlined the biggest challenges facing America’s infrastructure, including a population that will grow by 70 million over the next three decades, adding, “Close collaboration between the public and private sectors, like the partnership with AEM and Northwestern University, will play an important role in determining how we move people and freight better in the future, and support the American economy.”

Mendez, who was elevated to the number two DOT post after heading the Federal Highway Administration from 2009-2014, referenced timely action – in light of “Beyond Traffic” and “Mobility 2050” – emanating from the Fixing America’s Surface Transportation Act (FAST), signed into law late last year and funding the federal highway program through 2020. “In developing the 2017 budget, Transportation Secretary Anthony Foxx and President Obama could simply have pointed to the FAST Act,” said Mendez. “We didn’t just sit still, and instead proposed to raise billions in funds [and] push more money to local decision makers.”


Ron De Feo

The “Mobility 2050: A Vision for Transportation Infrastructure and How We Can Get There” symposium took place on the main Northwestern campus in Evanston, Ill., and carried the full title of an 11-chapter study authored principally by Department of Civil & Environmental Engineering faculty. “The objective of the study is not to predict the future, but to frame scenarios and trends that will inform the public and policymakers about what is possible,” explained AEM Infrastructure Vision 2050 Task Force Chairman Ron De Feo, who recently transitioned to chief executive of Kennametal Inc. following 22 years at the helm of Terex Corp.

“Some people question the 35-year study timeline. They ask ‘why not make it shorter?’ I want this to be an envisioning, not a user generation. We want to leave our children and successors with a better place than today, [and] are much more likely to be able to do some thing about the traffic than the weather.”

“We need to frame a conversation about the benefits infrastructure can bring people,” he added. “AEM and its members will use this study to articulate the factors and trends that will shape a national, long-term vision for U.S. infrastructure. There is much to discuss, debate and, most importantly, decide.”

After addressing the gathering of 50 agency representatives, AEM members and staff, plus “Mobility 2050” contributors and department peers, De Feo joined a panel moderated by Department of Civil & Environmental Engineering Professor Joseph Schofer. He co-edited the study and contributed two chapters on transportation system profile and outlook, plus a third, “Paying the Way for Future Transportation Infrastructure.”

AEMPanelSteering the panel to the latter chapter’s topic, Schofer noted, “Degraded system performance is a drag on the economy. In transportation networks, the whole is greater than the sum of the parts. It’s a matter of building right. Funds must be available in the right increments [not] through bits and starts in the legislative process.”

He suggested a new branding for the source of much federal and state transportation funding: “‘Usage’ fees are logical and important sources for public infrastructure. I prefer usage to user fees. Usage is ‘us’; user makes it sound like ‘you’.” People need to understand the connection between the pothole they drive over and motor fuels taxes, he added, concluding that the “motor fuel tax has a dim future [as] our leadership has been unwilling to raise fixed fees. We need to restore trust in government in order to get funds.”

“We can connect the impact of infrastructure on peoples’ lives; show how we can make it better,” concurred De Feo. The country needs political courage and will, he added, and to hear “the truth about the federal transportation program: We are on a ‘going out of business’ strategy. It is not sustainable. The five-year FAST Act did not add any incremental funding to our infrastructure. Anyone who thinks we have a solution is wrong. What we have is certainty at a low level.”

A discussion on transportation funding, De Feo assured, is one on “How we create wealth. We need an economy that grows at 4 percent, versus 2 percent. Infrastructure will facilitate that wealth if it is properly thought through. We need to connect business and politics.” Proper planning and funding strategies, he observed, are hampered as federal government leaders and lawmakers, “Get stuck on the politics of ‘todayism’ … irrespective of the party in office.”

“When it comes to funding, Congress is all for new financing options, but not new funding options,” said fellow panelist Randall Blankenhorn, Illinois Secretary of Transportation. “We are not selling the story of transportation funding properly. The public is not buying it. We have to show them about the little things that matter in their lives. We need to think about what we are trying to sell: Strong communities, more personal time. Can’t just say we need more money for transportation.”

“We’re planning for yesterday,” he added. “I do believe we are living in the past, not thinking about the changes that are coming, much less anticipating change. Demographics, technology, communications and funding [are] what the future is about.”

The “Mobility 2050” announcement and symposium capped Infrastructure Week (May 16-23), which AEM had kicked off in Washington, D.C., with a similar panel discussion on Capitol Hill. The events are part of the Infrastructure Vision 2050 initiative aimed at elevating national discussion about the future of infrastructure and ensure that equipment manufacturers are positioned to help the world build its next wave of public works.

“How can we challenge the public to think about infrastructure on a big scale,” De Feo pondered. “Are we capable of thinking in terms of [another Interstate Highway System] and inspiring and realizing a long-term efficient and effective infrastructure for the country?”