laser guided backhoe?

I was wondering if anyone here could tell me how a laser guided backhoe works? How does the machine determine where the bucket is? Is this in relation to the backhoe or a ground mounted laser?
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The rotating laser is ground mounted on a tripod. Some equipment can have the laser actually work the hydraulics to raise or lower the blade. This technology works well with graders and box blades. It is cheaper and more usual to have a receiver that indicates to the operator "up" or "down". In the case of a backhoe, one would mount the laser receiver somewhere on the boom that the operator can see and/or hear. The laser can also be shot down the pipe for super accuracy.
The one we use is from this company: http://www.spectralasers.com /
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