Chris Mc Loone
It seems like it’s been a long time since United States citizens have received positive economic news, and unfortunately 2013 is as big a question mark as recent years in terms of whether or not the economy will turn around. At the 2012 trade shows, manufacturers had a lot to show. Booths remained impressive in size. To listen to attendees and exhibitors, it sounded like departments were starting to make capital investments once again. It seemed like they had waited long enough and orders were beginning to arrive. That said, the trade show season has ended, and the United States has elected its president. So, it’s reasonable at the end of the year to take stock of where we’ve been and where we think we’re going.
For the most part, despite acknowledging market realities, fire industry manufacturers have remained optimistic throughout the economy’s down cycle-not an easy feat-but erred on the side of conservative estimates. Regarding 2013, Cameron Blain, marketing manager at R.O.M. Corp., says, “For our core emergency products like roll-up doors and scene lighting, we’re hoping for moderate growth. Additionally, we’re looking to grow a handful of newer products from our sister companies with the emergency market.”
Rod Carringer, vice president, sales and marketing, Task Force Tips (TFT), says, “With an uncertain political climate, most businesses of our level, our distribution partners, and fire departments in general tend to take an ultra-conservative approach to acquisitions.” He adds, “Certainly this is painting the whole issue with a really large brush. There are small departments who continue to spend wisely; there are fire districts who continue to be well funded; and, on the other hand, there are municipalities struggling with insurance and pension costs that put a total lid on spending for new equipment.”
That said, Carringer says he expects up to 15 percent growth in 2013 in some market segments. “Even in highly competitive times, we believe TFT’s singular passionate focus on water supply and agent delivery coupled with a heavy commitment to new product development will reward us with substantial gains,” he says. “As the year progresses, the political and economic climate of this country, as well as the rest of the world, may become a little clearer. With clarity will come our willingness to take additional business risk. We feel good.”
Bob Sorensen, vice president of sales, SVI Trucks, is also optimistic based on pent-up demand. “I thought we would have more of a rebound for special service vehicles in 2012, but this still has not happened,” he says. “There has got to be some pent-up demand that should carry over into 2013, so I’m optimistic that 2013 will be better.”
Paul Darley, president and CEO, W.S. Darley & Co., suggests that the market will be depressed for longer than most anticipate. “Generally there is a lag between the general economy and municipalities of 18 to 36 months,” he says. “Cities know this and are cutting expenses faster than revenues are decreasing. Once out of this current economic state, things will improve. But, we probably won’t see the market size that we saw from 2003 to 2009.” He adds that with sequestration, there may be a decrease in Department of Defense and overall federal spending, which does affect his company. He also says the weakened dollar should continue to help exports.
One company that is expecting a good 2013 is PL Custom Body and Equipment Co., Inc. (PL Custom). “The coming year is looking upbeat for us here in Manasquan, New Jersey,” says Chad Newsome, national sales manager. “2012 brought about an increase in production capacity followed by the addition of four new distributors. We will continue our consistent and steady growth plan and build on our solid distribution network to gain new customers in existing territories while simultaneously entering new regions as well.”
One aspect of the current economy, which Darley touched on above, is the global nature of the business. Although domestically sales are down, global sales have often grown. “Since Hale is a worldwide fire suppression pump, foam system, and electronic equipment solution provider for the fire service, we look at the economies of North America, Europe, the so-called BRIC countries, and other emerging markets as well,” says Dominic Colletti, chief brand marketing manager, Hale, Inc. “While the United States fire and rescue market continues to stabilize in some areas, there is still continued concern with the impact of the fiscal cliff, should the government fail to address it quickly. The concern in the United States, of course, is with municipal funding stability and the ability of fire departments to maintain firefighting staff and purchase new fire apparatus. On a worldwide level, we continue to see significant growth in a number of emerging markets.”
Diversification for some companies has also eased dealing with the current economy on the fire rescue side. “While the fire market makes up a good chunk of core R.O.M. business, we’re diversified and have a variety of products in other markets like refrigerated food and work/utility trucks,” says Blain. “In the 60-plus years R.O.M. has been in operation, this isn’t the first downturn we’ve weathered and it won’t be our last.”
Carringer considers the political and geopolitical environments even more important than the economic component in terms of how they will affect the market in 2013. “If you’re a small business owner, worse than higher taxes or government regulations that affect your success is not knowing,” he says. “You can’t make a decision on taking on new product lines, expanding business, hiring more staff, or building a new facility with the level of uncertainty we are currently living in.” He says TFT will closely watch the domestic and world geopolitical and economic indicators. “And, we will continue to invest in team members, new technology, product development, and the tools we need to be competitive in a global marketplace.”
Keys to Success
Fire industry suppliers’ success is as important to the fire service as it is to the individual companies. Success drives innovation, which provides firefighters with new tools to help them do their jobs better and more efficiently.
Maintaining and improving communication between themselves and their fire department customers is a theme that resonates among vendors. “When you look at scene lighting, roll-up doors, and cargo trays, no one-including R.O.M.-is making it easy for customers to source and understand complex data,” says Blain. “So, our focus is to build more interactive and simplified pieces that quickly supply answers and that work on various mobile devices.”
According to Colletti, the key to Hale’s success is to provide value-added products and services-solutions-that increase firefighter safety and provide increased speed, effectiveness, and reliability for those using fire apparatus. “For Hale, this starts with smart apparatus fire pump design solutions for the truck committee and carries all the way through offering top-notch maintenance and service training programs at Hale University for the fire department mechanic,” he says. “We understand that building superior performing products is what’s critical to a firefighter’s total satisfaction with our equipment.”
“Our success focuses on three main ideals: durability, reliability, and serviceability,” says Newsome. “We continue to look for partners who share our long-term vision for high-quality products, outstanding customer service, and smart and sustainable growth.”
Listening to customers will also be the key for W.S. Darley & Co. Darley says the company will “listen closely to customers and develop products that meet their true needs.” He adds it will diversify into new markets but stay close to customers “so that we are ready to deliver when things turn around.”
Carringer adds, “As we compress the time it takes to bring an idea to the market, we continue to react quickly and precisely to our fire department customers’ and distribution partners’ needs. We invest a huge amount of time and effort communicating directly with our partners and fire department customers to learn their wants and needs.”
Other Things to Watch
There are other factors impacting both suppliers and the fire service at large next year. “With little doubt, the fire service is expected to continue to look at and adopt new alternatives in apparatus design, technology, and equipment,” says Colletti. “Since the Hale pump is the heart of a fire engine, we understand how important cutting-edge pump design is for the grassroots of the industry-the men and women of the fire service.” Colletti says the company is well positioned and looks forward to helping firefighters meet tomorrow’s challenges by providing fire pump and electronic innovations for fire apparatus in 2013.
And, don’t forget National Fire Protection Association (NFPA) 1917, Standard for Automotive Ambulances, goes into effect in January 2013. “The big unknown for 2013 is what impact NFPA 1917 will have on the industry as a whole,” says Newsome. “What states will adopt the new standard? If not, what standards will they comply with?” He adds that the industry as a whole will continue to see more contraction with blended manufacturing, buyouts, and ownership changes.
Carringer suggests distribution channels could evolve. “As I live on both sides of the market fence, I remain concerned that our distribution partners can continue to maintain their business models, be profitable, and provide value to their customers,” he says. “I see increasing pressure on the current distribution models used for years in our industry. Will it be Internet sales, catalogs, or some unknown business model that changes our industry? Well, that is just not yet known.”
End User Implications
Ultimately, everything written about here has some effect on the end users. Fire industry suppliers may see a bright 2013, but the municipalities that are still in “crunch-the-budget” mode may not see it that way. So what does it all mean to the purchasers?
Carringer has the luxury of being on both sides of the fence-as a firefighter and as a supplier-and offers perspectives from both. “One item that I see frequently that I find troubling is what I consider hyper-competition. There is so much excess manufacturing capacity for products in our industry that many companies, in their desire to maintain production levels within their organizations, are willing to give up margins or profitability,” he says. “Now, the fire department purchasing side of me is absolutely loving it-I can buy products for pricing I haven’t seen for years. Everyone is hungry for orders, and it really is a buyer’s market.” But on the supplier side, Carringer notes, “The downside to this comes with the degradation of the value I used to get from the distributors and salespeople who used to call on me. There seems to be a whole lot more e-mail, videos, and links to Web sites and a lot less time doing face-to-face meetings on products.”
Carringer says these personal meetings, although expensive, are highly productive. He also notes that after-sale service and support are becoming marginal at best. “With profitability shrinking at the dealer and manufacturer level, as a fire department user, it is getting harder,” he says. “For me, like many, it is about doing more for less. And I hate to say, but for some doing less with less.”
Sorensen echoes Carringer’s “buyer’s market” sentiment. “Because the fire truck market is so slow, the price of fire trucks has not been lower in years,” he says. “Now is the best time to purchase a new truck because when the industry returns to a somewhat normal condition, the prices will return to a normal price point.” Blain concurs. “It’s a great time for a department to purchase a new truck,” he says.
CHRIS Mc LOONE, associate editor of Fire Apparatus & Emergency Equipment, is a 19-year veteran of the fire service and a captain with Weldon Fire Company (Glenside, PA). He has been a writer and editor for more than 15 years. While with Fire Engineering, he contributed to the May 2006 issue, a Jesse H. Neal Award winner for its coverage of the Hurricane Katrina response and recovery.