Eric G. Regelin, president of Atlantic Builders Group in Rosedale, Md., knows just how big a problem theft at construction sites can be.
Several years ago one of the company’s s backhoes disappeared, “never to be seen again,” Regelin said. The company invested thousands of dollars in a custom security system for its equipment storage yard, an innovation that slashed theft. But the company had to scrap the system when it broke down because its builder was out of the market.
Losses from construction site theft total in the billions of dollars every year and cut across multiple sectors — home building, commercial construction and public-works programs. The pilfered wares include building materials like steel, lumber, insulation and siding, newly installed home appliances, tools and heavy equipment.
In residential construction alone, theft of materials and appliances, and the damages caused during the course of those crimes, ranges from $1 billion to $2 billion annually, according to the National Association of Home Builders. That’s enough to push the prices of new homes up 1 percent to 2 percent every year, the trade group said.
Thefts of heavy equipment such as bulldozers and backhoes cost the industry $300 million to $1 billion a year, and only 10 percent is ever recovered, according to the National Equipment Register, a for-profit company heavily funded by the insurance industry that tracks equipment theft and is building a national registry database.
“Everywhere you go, you will find equipment left alone, unattended, and many job sites are just not secure,” said Adam Gurzynski, an equipment analyst with National Equiipment Register. “Sometimes [thieves] just hook up and go,” absconding with construction machinery, as well as the trailer it sits on.
For Black & Decker Corp., construction site theft represents an opportunity to venture outside its traditional power tools and accessories business to tackle a problem faced by its core commercial customers.
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The company, based in Towson, Md., is rolling out a portable security system as well as a new business unit to sell it. Called SiteLock, the system, which has been under development for about 18 months, employs licensed wireless and cellular data-transmission technologies packaged under the company’s professional-grade DeWalt brand.
“This was really driven by end-user research,” said Bill Pugh, group marketing manager for the DeWalt Security Business Group, the unit newly formed to market the SiteLock product line and accompanying security service. Pugh said 60 percent of 1,500 customers it surveyed reported theft was a problem, but that less than 15 percent said they used any kind of security system.
The wireless security system can monitor different areas of a job site, simultaneously safeguarding items as big as backhoes and bulldozers and as small as individual power tools, according to Pugh. The basic unit and one keychain remote will list for $1,000, with individual sensors priced from $99 to $199.
The system must be linked to a central security monitoring service — either one DeWalt is offering, or through an outside security-monitoring firm. The basic service DeWalt will offer through a third-party vendor will cost the customer about $40 a month, the company said.
The product will be available within weeks, according to Pugh.
Analysts said the SiteLock system represents a new direction for Black & Decker in leveraging its premium DeWalt brand, which accounted for close to half of the firm’s power-tool business and roughly 40 percent of overall revenue of $4.48 billion in 2003.
“It does appear to be a new approach, and a novel product,” said Ivan Feinseth, an analyst who follows Black & Decker for Matrix USA, a New York-based investment banking firm. “If you have a major investment in tools, and are doing work at a construction site, you’re going to want to protect that [investment], meaning you’ll want to own one of these.”
The company declined to forecast sales for the SiteLock business unit or reveal how much it spent to develop it. It also declined to quantify the dollar value of the market the product is targeting. However, Pugh did say that, at any given moment across the country, there are 250,000 active job sites.
Rival security products are available, company officials concede. But SiteLock is cheaper than most and can simultaneously monitor a far larger number of items, Pugh said. SiteLock is also easier to move from one job site to the next, according to DeWalt. That’s because SiteLock emanated not from an adaptation of an existing product, but from a “clean-sheet” design — one developed specifically for security at construction sites, where equipment is often scattered about and tools locked inside a trailer or large “gang boxes.”
The SiteLock base unit — the system’s digital brain — is a backpack-sized device with its own programmable keypad. It uses the same 900 megahertz radio band as many baby monitors and cordless phones to communicate with individual sensors attached to tools, building materials or heavy equipment, as well as to locked construction-trailer doors or padlocked construction-site gates.
If any of those sensors — as many as four dozen per base unit — detect movement or tampering, they send multiple “bursts” of warning data to the base unit.
The base station, in turn, then uses the cellular-telephone spectrum to send multiple “bursts” of warning data to both the central monitoring service, and to as many as six keychain-sized, remote-control units held by key members of the construction-site team.