Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Kyle O'Meara from Robert W. Baird.
Kyle O'Meara Robert W. Baird
Wondering if you could comment on rental rates. Do you feel like they're stabilizing or that they could deteriorate further? And I guess maybe if you could comment on just what you're seeing quarter to date?
Erik Olsson
What we're seeing so far is pretty much a continuation of what we saw in the first quarter. So we expect to see a further deterioration on rates in the second quarter.
Kyle O'Meara Robert W. Baird
Increased your cost savings started for 2009 by over $50 million. As far as that, how does that break out between cost of sales and SG&A? Is that similar to the original $100 million you guys talked about on the last call?
David Mathieson
There’s a lot more cost of rental added in that count.
Kyle O'Meara Robert W. Baird
So a lot more would be more towards in the cost of rental side and can you just talk about, is that primarily headcount? Is that?
David Mathieson
It's everything. It's every line in the P&L. We are very focused. We have what's called our selfhelp list. We have that by region. We have that by district. And we have that by line item. Everybody is reducing their costs very successfully. We're very pleased with the way people are taking costs out.
Kyle O'Meara Robert W. Baird
You commented opening you had opened 3 new industrial locations. Are there any plans to further consolidate locations in the second quarter? If you can just talk about that.
Erik Olsson
There will be some consolidation, but not to the level that we've seen in previous quarters. As I said, by and large, our footprint is right for the current level of business. There may always be certain markets or locations that we will close, but the big reduction is locations are behind us unless the market deteriorates further.
Operator
Thank you, our next question comes from the line of Adrienne Colby from Deutsche Bank Securities.
Adrienne Colby – Deutsche Bank
The margin that you saw on your used equipment sales was slightly lower than what some other peers have been reporting. I was wondering if you could update us on maybe the mix of the items being sold, if that was coming into play?
Erik Olsson
It wasn't really the mix of items sold as the channels that we sold through. We sold significantly more through auction channels than we normally do and that impacted our margins.
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