The Economy And The Manufacturers

Bob BarracloughBy Bob Barraclough

With so many things happening with the economy affecting the apparatus and equipment manufacturers, my next two columns will be more of an informative update of the economic cycle and how it will affect the equipment builders.

American LaFrance owns the rights to Snorkel and the Snorkel Squrt. This beautiful unit was delivered to Lawrence Township, N.J.
American LaFrance owns the rights to Snorkel and the Snorkel Squrt. This beautiful unit was delivered to Lawrence Township, N.J.
Spartan's Furion chassis has been popular for departments that wanted a custom cab but could not afford the price of an expensive custom. It trims out very nicely.
Spartan’s Furion chassis has been popular for departments that wanted a custom cab but could not afford the price of an expensive custom. It trims out very nicely.
With Pierce opening its Bradenton, Fla., plant, the company had more room to build the more economical Contender units. Here is one of its West Coast-type wildland rigs on an International chassis.
With Pierce opening its Bradenton, Fla., plant, the company had more room to build the more economical Contender units. Here is one of its West Coast-type wildland rigs on an International chassis.

As I am sure most of you know, this industry goes through cycles, usually following the municipal budgets and the general economy by 18 to 24 months. Remember those days in the 1970s where interest rates topped 15 percent and delivery times sometimes exceeded two years?

The recent cycle started in 2008 when the departments that had money available purchased earlier than planned to take advantage of lower prices before they were increased by the 2009 changes to the National Fire Protection Association 1901 apparatus standard and by the tougher diesel engine emission requirements imposed in 2010 by the Environmental Protection Agency. This caused a nice surge in sales even if it only meant departments bought early.

By 2010, we heard reports of a 30 percent to 40 percent downturn in sales in the apparatus and equipment industries. Because of the new regulations, the plunging economy, and the resulting budget cuts, the apparatus and equipment industries could be compared to bears in hibernation. They will both wake up eventually, but before that, there will be a lot of things that will need to be done to safely endure the long nap.

For the bears, that’s finding a comfortable den and loading up with food and water for a long winter. For the apparatus guys, they may have to wait two to three springs for the money supply to free up and the order writers to do what they are paid to do.

When the prognosticators say sales will be down for more than 6 to 12 months, it is time to cut expenses. That’s people, expansions, shows, stock units, R&D and maybe even prices. It is already happening, as some of the larger manufacturers are cutting or moving some good people to other divisions. I missed the Fire-Rescue International trade show in Chicago in August sponsored by the International Association of Fire Chiefs, but was told by several attendees that many vendors took less space than normal to reduce costs.

Some fire departments could greatly benefit from builders who want to reduce inventory. You may not be able get all the options you want, but the price may be low enough to justify the purchase. Just look at the ads in the magazines and the low prices that are being quoted. It is a good time to search out your next rig and start to negotiate with several builders.

Let’s take a look at some of the happenings in the apparatus/equipment industry.

Spartan, owner of Crimson Fire, recently announced it sold Road Rescue Ambulances to the New York-based American Industrial Partners (AIP), a private equity firm that owns many companies, including Wheeled Coach, Leader Emergency Vehicles, Horton Emergency Vehicles, Fleetwood RV, E-ONE, Capacity, Collins Bus, AEV (ambulances) and now Road Rescue. Whew!

Best guess is AIP, a relative newcomer to the ambulance industry, will control perhaps 60 percent of the ambulance sales. Because AIP is so diverse, it has formed a new division to be located in Orlando named Allied Specialty Vehicles to manage this segment of its portfolio, which includes E-ONE. When you have 60-plus percent of the ambulance sales, but have E-ONE and Capacity, which makes terminal tractors, tucked into this group, one has to wonder where the next step will go. Will it be another fire apparatus company or more ambulance/rescue builders?

Many Spartan customers who use Spartan fire apparatus chassis would like to see Spartan not compete with them by owning and promoting Crimson. It could be interesting to see where Crimson ends up should Spartan decide to sell it.

International Truck and Engine has reaffirmed its current engine strategy that International 2010 power plants will not need to have selective catalytic reduction (SCR) equipment to comply with the new EPA emission requirements. International announced that its 2011 accessory list will include an option for a 4×4 drive train for the TerraStar Class 4/5 line of trucks.

As reported previously, American LaFrance, a division of Patriarch Partners, has decided to keep its Ephrata, Pa., facilities open to continue to build LTI aerials and bodies and to service and overhaul both. They have more than 50 employees at this facility. Harry Hahn, formerly of Medic Master, is the general manager. ALF will continue to use custom chassis built at the Summerville, S.C., plant. They are finishing up an order of four tractor-drawn aerials for the Los Angeles Fire Department. In case you didn’t know, ALF owns the rights to Snorkel and the Snorkel Squrt.

As you probably know, Ferrara was awarded 20 aerials for FDNY. This has been a Seagrave account for pumpers, aerials and Aerialscopes for many years. After 9/11, other manufacturers supplied replacement units to the department, and, apparently, FDNY found the Ferrara apparatus favorable. It will be interesting to see how the Ferrara units survive after they are given the FDNY in-service test. It’s possible the next FDNY pumper order may go to someone other than Seagrave.

While Pierce continues to be the largest builder of fire apparatus in the United States, its recent management changes puzzle me. At Pierce’s parent company, Oshkosh Corporation, President Bob Bohn announced he will retiring at the end of 2010. Bob was very instrumental in helping Pierce grow to the next level while maintaining the best sales and dealer organization in the country. Wilson Jones, formerly of Wheeled Coach, E-ONE and Akron Brass, was hired by Bob and has been quickly moving up the Oshkosh corporate ladder. He was Pierce’s vice president of sales and then moved up to president. But for some reason he has been moved out of fire apparatus to the JLG Division, which makes platform lifts. That’s a loss for the Pierce folks.

Other talented Pierce people have been moved aside or out in the realignment. Sales Manager Jeff Resch was transferred to “Truck” (what the locals call Oshkosh Corp.) to work in aircraft division sales (crash trucks and snowplows). Roger Lakore was also moved to “Truck” as the director of product safety. Outside the Pierce offices in Appleton, regional managers have been released, and several high producing dealers have been cancelled. That is a lot of change for a company to absorb.

Stay safe and buy those needed trucks now!

Editor’s Note: Bob Barraclough is a 50-year veteran of the fire service and fire manufacturing industry. He is chief columnist for Fire Apparatus & Emergency Equipment magazine and a 22-year member of the NFPA 1901 Fire Apparatus Standards Committee. An organizer of the annual FDSOA Apparatus Specification Symposium, he is on the Board of Directors of the Congressional Fire Services Institute and is a past president of the Fire Apparatus Manufacturers Association. Barraclough serves as a consultant to Rosenbauer America 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.

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