The April Fire Department Instructors Conference and Trade Show (FDIC) in Indianapolis was ripe with talk of “the recession” and reports of apparatus sales being down 8 to 12 percent or more, depending on who was doing the talking.
But wait a minute! Just because one dealer who wrote orders for 12 fire trucks during the first three months of 2007 only wrote orders for 11 in the same period in 2008 doesn’t mean business is down 8 percent.
Historically the fire apparatus business — which drives this entire industry since everything made for the fire service gets to the emergency scene on a fire truck — has been the very last industry to suffer a sales slowdown during a recession. And, it has been the first to recover when the economy turns up.
We feel all this “recession think” about the emergency services industry is a lot of bandwagon-driven talk influenced by two things:
1. The already tiresome 2008 presidential election “news” reported and commented about 24 hours a day on broadcast TV, XM and Sirius radio, satellite HDTV and worldwide Internet blogs.
2. The magnification of well-known, long-standing problems surrounding the inability of American LaFrance to make a profit in the last 12 years and the decision by Federal Signal to divest itself of E-ONE just when things are on the upturn.
The only unknown as far as the election is concerned is the question: “In which foot will the Democratic Party shoot itself this time?” (Odds are the Left one, of course.)
As to American LaFrance, at this point the company is making progress pulling itself out of the Chapter 11 bankruptcy filed in January. Unsecured creditors will get 22.5 percent of what they are owed, according to the U. S. Bankruptcy Court.
An E-ONE inside source tells us not only will the company soon have a new owner — probably by mid-year — but the first quarter 2008 results will show a healthy sales increase over the same period last year, as well as over the last quarter of 2007. Its parent company, Federal Signal, is a public company traded on the New York Stock Exchange, and first-quarter results won’t be released until a few days after this issue is printed.
The two other public companies in the fire truck business — Oshkosh Corporation’s Pierce Manufacturing and Spartan Motors Inc.'s Crimson Fire, Road Rescue ambulances and Spartan Chassis divisions — are predictable in the first case and known in the second.
Pierce has been the fire industry’s top performer in both sales and profitability for at least the last 10 years, and with all its new products, that’s unlikely to change when the numbers are released a week from this writing.
Spartan Motors, Inc., traded on NASDAQ, reported April 24 that the first three months of 2008 were the best quarter in company history with an 84.4 percent increase in sales over the same period in 2007 and more than double the profit margins.
As to Spartan’s subsidiaries, while sales of Spartan fire truck chassis were down 2.3 percent (essentially flat) sales at Crimson and Road Rescue were up 13.3 percent over the previous year.
Although the Crimson division has yet to be profitable, it and Road Rescue showed results at the end of March that were 75.5 percent better than the three months ending Dec. 31, 2007.
Excuse us, but we have to put the recession “on hold” as far as it concerns the fire and rescue industry. We promise to let you know when to start worrying.