Question-and-Answer Session
[Operator Instructions]. We'll hear first from Robert McCarthy with Robert W. Baird.
Robert McCarthy - Robert W. Baird
Good morning guys.
Unidentified Company Representative
Good morning Rob.
Robert McCarthy - Robert W. Baird
I wonder if you could spend a little more time talking about the raw material landscape if you will, since that's been such... apparent significant change in the over all operating environment for capital goods manufactures and who I'm specifically getting at is how your ability to respond to that with pricing and productivity initiatives might vary between cranes and food service where do you expect to see the larger impact between those two segments and I'm tempted to read into this that you have a little bit stronger out look for operating efficiency this year with an unchanged outlook in given developments on raw material market, I wonder if you could comment on that as well.
Unidentified Company Representative
Sure I will do best I can, a all of it Rob...but I would say that the biggest... obviously spike has been steel and I think that all started in January, February you saw the commodity head-win there and I think its no difference than what you are hearing from lot of people, we have said before you can hedge out three to six months in our global sourcing people are taking every initiative they can to make sure we have not only the supply but we have it at a reasonable cost, but the steel company is now that there are some pressure there for them and still with price increases we have a few things that going to play price increases are one and some of its not necessary, just price increases looking at things as surcharges we are looking at other things that, I think the customers are more aware of that they get another commodities so it doesn't look like we are just... I hate to use the word gauging but they don't get that impression because whether its whether its freight charges or oil these people that are in the crane side of the business have seen these other types of surcharges so we are working with it we worked with dealer council here in North America which primarily is going to be the biggest market effected, now I would say to answer your other question where is the biggest impact it is on the crane side and not as much on the food service side and a lot of it just because of the volumes of product that's made for the food service industry versus what's made for the crane industry. And into those high tensile strengths, Rob and that's where it comes from, because as you know we have said many times there is very few suppliers of that. So, with respect to the impacts on our margins, we are doing a lot of things and that's why you saw some of the capacity expansion projects you see a lot of the things that we are doing efficiency with the equipment. We are trying as fast as we can to get these things online, because of what we saw on the commodity side. But we still believe that there are opportunities for us and Carl mentioned in his comments the rising commodity cost prices is only one thing. We do have opportunities to take cost out, it can be with different type product, it could be engineering, changes could be different vendors, so we are trying to go through the whole gamut of opportunities to minimize the impact of the rising cost.
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