By the time you read this, the presidential election will be over and television ads will have reverted back to the same old stuff. As the new administration gets ready to take over, it is time to talk about some of those things that happened recently that affect the apparatus industry.
The U.S. Army’s Tank-Automotive Command (TACOM) in Warren, Mich., is a government purchasing agency which supports our troops with equipment. If you look at its Web site, http://contracting.tacom.army.mil/acqcenvision.htm, you will find the typical “spin doctoring” such as, “We are an award winning, customer focused organization with goals related to customer satisfaction, contracting excellence, workforce revitalization and development, improving our working environment, implementing improved business processes, and the institutionalization of leadership competencies. We insure warfighting readiness for the soldier by purchasing ground combat, tactical vehicles, small arms, chemical/biological systems, targetry, supporting services, associated consumable parts, and the Future Combat Systems program. We are responsible for acquisition support and contracting for 70 percent of the Army’s major systems, and for systems and equipment supporting other services, and foreign military sales customers.”
OK, so why should you or I be interested in TACOM? Well this organization, dedicated to providing the best equipment and parts for the U.S. military (see above), has just awarded a contract for over 463 fire trucks (tankers and aerials) to Independent Systems, Inc., a two-person minority business located inside the Washington, D.C., beltway. The fire trucks are destined to protect our troops and the citizens in Iraq and Afghanistan.
Hold on, it gets worse. Independent Systems has indicated it will subcontract the manufacture of these vehicles to a Korean company (Junjin Industries) that currently builds 10-30 units a year. Now folks, this is our tax money being spent for fire trucks to protect our troops and the locals, and it is going to a Korean manufacturer by way of a small D.C. company.
What are the TACOM folks or the politicians thinking about? What happened to U.S. dollars being spent for U.S. products? Sounds like TACOM needs some big time help writing specs that will ensure the vehicles are up to U.S. quality and engineering standards and the money is spent here. Our people deserve nothing less. Will this apparatus meet NFPA standards?
While I’m talking about the government screwing up, let me mention the expanding bureaucracy at the U.S. General Services Administration. They slipped a section into H.R. 3179 that sailed through Congress and was approved by unanimous consent rules. What it says is that state and local governments will be able to buy equipment and trucks off the GSA schedule 84.
By law, manufacturers must offer GSA their lowest price. Basically, GSA then offers this low price to other government entities (with a service fee for GSA). But after-sale service or training is not a part of the program. It’s not GSA’s problem.
So where does that leave fire departments that rely on local dealers to provide training, warranty and repair work on equipment? Dealers will no longer be able to make a living by selling and servicing fire equipment if manufacturers have to sell to GSA at the same price they sell to their dealers.
Big government gets bigger and the GSA worker bees justify their jobs by showing how much money they are saving with the program. But the dealer, the small businessman who sells and services the equipment, will quickly disappear. And where will you get service and parts? Not from GSA. Try getting a new pressure governor or other specialty part for your 2003 Pierce Saber without a dealer around to assist. GSA direct sales may be OK for uncomplicated tools like a hammer or a drill which is easily replaced, but what do you do about a replacement wiring harness for your multiplex system that was shorted out when a drunk driver rammed your pumper working at a fire scene? Call GSA?
And if the dealership business folds up, it’s not just service on your new 2010 aerial on which you saved 10 percent that you’ll lose, but service and parts access for your whole fleet. The older a fire truck gets, the more likely it will need replacement parts, and there is no incentive for the manufacturers to start direct sales of small parts for 10-year-old apparatus. Ask anybody who owns a 1998 ALF.
We all know we have to have some folks to manage our government affairs, but we certainly need to reign in their desires to make the bureaucracy bigger. Let’s hope the new administration will start in that direction. A new broom makes a clean sweep.
Competitors do make strange bedfellows. You really need a scorecard to keep track of what is or may be happening in our industry. The American LaFrance situation just gets more confusing by the week. They have a brand new facility in South Carolina, and the decision was made to not make fire trucks there. ALF management has chosen to have all fire trucks produced in Hamburg, N.Y., or the ALF aerial plant in Ephrata, Pa. That way they can keep the big new plant for production of the Condor (garbage truck chassis) and other, yet to be named, specialty vehicles. Does this make any sense?
A Sweet Deal
Next, enter Jim Hebe, now with International trucks and former president of ALF and Seagrave. There is a new agreement to sell IH engines to ALF for the Condor and in turn, to offer the Condor through the IH dealers. Sounds like a sweet deal.
Just think about the possibilities for the Condor production to move to the IH chassis plant in Springfield, Ohio, if and when ALF decides to sell off the company with Hebe in the mix?
How long do you think it will be until IH takes over the production of the ALF Eagle chassis? Or until IH begins producing a custom fire truck chassis with IH running gear? After all, John Chadwick, who designed the original Eagle chassis, is now a consultant at IH. Spartan better watch this one. It should be an interesting year ahead in our industry.
The ALF Aerial Facility
The future of the ALF aerial plant in Pennsylvania is a question mark. If you look around the industry, Pierce, Rosenbauer and KME already have good steel aerial lines. Perhaps the ALF aerial facility may be of interest to Ferrara. After all, Ferrara has a beautiful facility, room to expand and a proven custom chassis. Ferrara now buys its aerials from Smeal. Perhaps it would be a logical move to get into building it’s own sticks.
The Stock Market and Financial Stability…
I trust you have been watching the stock market plunge along with the rest of us. You may want to take a look at Oshkosh Corp., the parent company of Pierce. Its 52-week high is $63.45 per share. Yesterday Oshkosh stock closed at $9.31, but it has been as low as $9.05 per share. That’s quite a drop, perhaps, in part, due to the housing downturn and the subsequent drop in the JLG business (fork and man lifts and other construction related equipment) that Oshkosh bought for $3-plus billion.
Oshkosh has recently promoted Wilson Jones (formerly of Akron Brass and E-ONE) to executive vice president in charge of its fire and emergency vehicle segment, which includes Pierce, Oshkosh Specialty Vehicles, Jerr-Dan, Medtec, Frontline and Smit. Pierce has had excellent sales with a recent quarter totaling 500 units.
Spartan has some of the same stock price problems as Oshkosh. Spartan’s stock price was at $23.78 on June 1, 2007, and recently it closed at $3.01. That cannot make stockholders very happy, especially with no known reasons for the drop. All indications are that Spartan sales are up.
Our industry is not unique in that competitors do make strange bedfellows. Crimson Fire Apparatus, owned by Spartan Motors, often bids against other apparatus builders using Spartan chassis. Spartan claims it has little interaction with Crimson.
Darley continues to sell its apparatus and sometimes ends up competing with another bidder quoting a Darley pump on its rig.
A similar situation exists at HME, which bids and assembles a complete fire apparatus under the Ahrens Fox name and also sells its HME chassis to other assemblers, Ferrara being a big customer.
There is a point here and that is to be sure you do your homework when purchasing a new apparatus. Know the financial situation of the manufacturer that will be engineering and producing the body, as well as who will supply the pump and what chassis and chassis components will be used. Most importantly, will you have a single phone number to call if you have any problems?
A “sole source” requirement in a bid is a farce. There are no manufacturers that make every component on a fire truck. Engines come from engine builders, axles from axle builders, tires from rubber specialists, warning lights from light suppliers… well you get the picture. Even Pierce, the largest apparatus builder in the U.S., doesn’t manufacture engines or tires or produce warning lights, sirens, air horns, etc. Actually, its chassis, aerial components and bodies are built in different plants in different cities.
What this means is all fire truck manufacturers are truthfully assemblers.
So, the important fact for you as a buyer is this: Do I have a single place to call for help? If your supplier provides that, get your performance bond and you can smile all the way through the purchasing process.
Editor’s Note: Bob Barraclough is a 40-year veteran of the fire service and fire manufacturing industry. He is chief columnist for Fire Apparatus & Emergency Equipment magazine and a 20-year member of the NFPA 1901 Fire Apparatus Standards Committee. A principal organizer of the annual FDSOA Apparatus Specification Symposium, he is also a past president of the Fire Apparatus Manufacturers’ Association. Barraclough serves as a consultant to Rosenbauer America and Akron Brass and is called upon as an expert witness in litigation involving fire industry products. His career includes executive positions at E-ONE, Hale Fire Pumps, National Foam, Span Instruments and Class 1.