The New Normal

By Paul C. Darley
President and CEO
W.S. Darley & Co.

For most of America, 2012 was the hottest summer on record, and many areas experienced the worst drought conditions in decades. These weather conditions led to record wildfires, with more than two million acres burned in July alone. The National Weather Service is calling these conditions “The New Normal.”

The fire apparatus market has changed drastically during the past five years. As municipal budgets see no signs of near-term recovery, many are referring to today’s depressed city budgets as “the new normal” as well.

Pick up any fire trade magazine, or even a national business publication, and it’s hard not to read about the municipal financial crisis. The fire service has been one of the hardest hit departments within most communities. The days of fire departments being treated as “sacred cows” in their communities are coming to an end. At the same time, long-term federal funding through the Fire ACT Grants and other programs are getting a hard look from Congress as it battles to balance the federal budget. Many career fire departments are opting to delay capital expenditures rather than face layoffs. Who wouldn’t?

As a result, fire apparatus manufacturers have seen the number of new trucks sold each year in North America drop from a high of 6,000 apparatus per year in 2008 to an estimated 3,500 for 2012-a 40 percent decrease by most accounts.

Many industry experts predict that the market will be slow to recover, and when it does, the new typical annual market size-or “new normal”-will be 4,250 to 4,500 new fire apparatus sold each year.

When the Market Will See Recovery

I’ve always been an optimist, but I know that we have to be realistic about changing market conditions. It is therefore critical to look closely at the data available.

In September each year, the League of Cities releases a formal study called “Research Brief on America’s Cities.” I encourage you to review this report at The report notes that “fiscal pressures on cities include declining local economic health, infrastructure costs, employee-related costs for health care, pensions and wages, and cuts in state aid. Confronted with these pressures and conditions, cities are making personnel cuts, delaying or canceling infrastructure projects, and cutting local services.”

Although the report does not make a clear prediction on when city budgets will see a recovery, it speaks in depth about the “lag” period that exists. “The evidence suggests that the effects of changing economic conditions tend to take 18 to 24 months to be reflected in city budgets.” Most observers feel it is unlikely that we will see a municipal recovery before 2016.

So, what will the scenario look like for fire departments and fire apparatus manufacturers in the years ahead? Fire departments and fire apparatus manufacturers both need to reinvent themselves if they plan to survive this crisis.

What Fire Departments Can Do

Fire departments need to reinvent themselves to meet the changing environment in which they operate. According to National Fire Protection Association (NFPA) statistics, less than five percent of all responses involve responding to fires. The vast majority are emergency medical service (EMS) related.

Multipurpose vehicles are the answer for many departments-one vehicle that can carry a complete line of rescue and basic life support equipment needed for all nonfire calls yet can still provide large water flows when needed. This solution also addresses personnel issues in many departments where career or volunteer firefighters are not available to staff multiple apparatus.

Fire departments also need to communicate the importance of the fire service to and educate both city officials and the citizens they serve. Every call should be used as an opportunity to create fire service advocates who will vote to support their local department-especially during critical times such as referendums. Studies show that fire service members are still viewed positively, but the level of support by the general public has waned in recent years. Those departments that embrace their work with an eye toward customer service fare much better than those that don’t.

Fundraising isn’t just for volunteer fire departments anymore. “Fill the Boot” campaigns, pancake breakfasts, town festivals, and open houses still offer great opportunities to raise funds and can create community support.

Continue to apply for FIRE Act grants but take a close look at all the other federal, state, and corporate grant programs. There are many state and corporate grants awarded each year. The National Volunteer Fire Council (NVFC) is a good source of information.

Finally, there might be other areas in your community where the fire service can add value such as providing public safety at special events, routine municipal maintenance, or streets and sanitation work. I know that this is considered taboo in many career fire departments. But, some progressive fire departments have adopted this cultural change out of necessity and have found it to have a positive impact on the community while preserving jobs.

How Builders Can Adapt

With the downturn here in the United States, many fire apparatus manufacturers are flooding export and federal markets to fill their production slots. The weak United States dollar, coupled with high-quality NFPA-type apparatus, has made American products attractive to overseas markets.

Here at home these builders and their dealers are really listening to the true needs of fire departments. They’ve responded with multipurpose vehicles that offer extra compartment space, shorter wheelbases, and plenty of pumping capability to respond to virtually any fire. This is no fad. These trucks are ideally suited for many communities and address many of the budget and operational issues cities face today.

To survive, equipment manufacturers need to get involved. They should join and be active in organizations such as the Fire Apparatus Manufacturers Association (FAMA) and the Fire and Emergency Manufacturers and Services Association (FEMSA). The most recent joint FAMA/FEMSA annual meeting, held on September 26-28, featured speakers on such topics as an economic overview, apparatus innovation, and social networking.

I also encourage you to host a Legislative Home Day in your state, where fire departments and manufacturers engage with political representatives so that they are aware of issues that face the fire service.

As communities kick the can down the road on capital investment, many people ask, “With the decline in recent years, won’t there be pent up demand that will catapult the market beyond the 2008 figures?” Perhaps, but I wouldn’t bank on it because any increase will most likely be gradual. The fire service is in the worst capital equipment position in decades. With more than 50 percent of the fire apparatus in service today over 10 years old, it is probably going to get worse before it gets better.

If your fire department or company adapts to these changing times, you will come out stronger in the end. If you don’t reinvent yourself and take a realistic and proactive approach, we’re all in trouble.

PAUL C. DARLEY is president and CEO of W.S. Darley & Co. He is a past president of the Fire Apparatus Manufacturers Association (FAMA) and served on the board of directors of the Fire and Emergency Manufacturers and Services Association (FEMSA). He has visited fire services in more than 70 countries. He has a bachelor of science degree in marketing and finance and an MBA.

No posts to display