WASHINGTON — Congressional committees have never held a hearing focused solely on fire apparatus, in at least the last 30 years, and very likely ever. That changed on Sept. 10 when the Senate Subcommittee on Disaster Management, District of Columbia and Census heard from witnesses representing the fire service, two major manufacturers as well as an attorney who testified about the effects of consolidation within the industry.
The hearing, “Sounding the Alarm: America’s Fire Apparatus Crisis,” was led by Subcommittee Chairman Sen. Josh Hawley (R-Mo.), with additional questioning from Sen. Andy Kim (D-N.J.), Sen. Elizabeth Warren (D-Mass.) and others. The senators pressed two apparatus manufacturer representatives on issues related to apparatus cost and delayed deliveries, which they argue have left departments nationwide using older, worn-down trucks or more desperate measures. The senators also alleged that anti-competitive practices by three apparatus manufacturers — REV Group and Oshkosh Corp. (owner of Pierce Manufacturing), which, along with Rosenbauer, comprise up to 80% of the market — may have enabled price manipulation.
The hearing comes five months after the senators sent a letter to the CEOs of the three companies requesting an itemization of all delayed deliveries of fire trucks and related equipment, a comprehensive explanation outlining the reasons for these delayed deliveries, a full accounting of prices charged for fire trucks and related equipment, including the change in prices over time, and a complete list of complaints the manufacturers have received from fire departments seeking remediation.
Watch the full hearing:
Delayed deliveries
In his opening statement, Kansas City (Kan.) Fire Chief Dennis Rubin acknowledged that the problem can be basically separated into pre- and post-COVID: “The recurring argument by fire apparatus manufacturers for the cost spikes and apparatus delivery delays often is described as, ‘the fire service wants too many custom accouterments,’” but he suggested they could realign assembly lines to faster and more affordably move apparatus.
REV Group Specialty Vehicles Group President Mike Virnig defended the company from charges by Hawley that the manufacturing backlog was a “deliberate company strategy.” Virnig cited new apparatus models that can be delivered within a year, noting a “43% increase in orders between 2022 and 2023” challenged his fire division.
Hawley argued that despite production backlogs, such as $4 billion for REV Group, profit margins more than doubled, resulting in substantial dividends and executive compensation rather than investing in manufacturing capacity. Hawley further pushed, citing the disconnect between REV Group’s CEO earning $6 million while fire departments “can’t get a truck.”
In his opening statement, Pierce Manufacturing Vice President of Sales Dan Meyer said he shares the Subcommittee’s concern about the prolonged lead times seen since the pandemic, when demand for fire apparatus skyrocketed as supply chains and labor became strained: “The current lead times, which are a function of that demand spike, are unacceptable, and Pierce remains laser-focused on reducing them to pre-pandemic norms. I’m happy to share that — while there is work left to do, Pierce has been making progress. We shipped more trucks last quarter than any other in Pierce’s history. We acknowledged the lead time problem as soon as it emerged, and we have made — and will continue to make — historic investments to increase throughput.”
Meyer also noted that while the costs to make fire trucks climbed substantially in recent years, “price increases have slowed significantly” at Pierce.
Anti-competitive practices
Sen. Warren underscored that over the last 20 years, “private equity has been buying up independent fire truck manufacturers to the point that today, just three companies own approximately 80% of all fire truck manufacturers.”
REV Group owns brands including E-ONE, Ferrara, KME, Spartan Emergency Response, Smeal, among others. Oshkosh owns Pierce Manufacturing. Rosenbauer Group is based in Austria and operates Rosenbauer America, with headquarters in South Dakota.
Antitrust and trade regulation attorney Basel Musharbash testified that he had a chance to investigate monopolization in public safety products industries, reporting, “I found potentially unlawful corporate conduct in many of the industries I looked at, but what I found in the fire apparatus industry was truly appalling.”
Virnig defended REV Group’s purchases: “To level-set, we had four purchases over the course of 17 years. Each one of those companies was in financial distress when we bought them. I know for sure in the case of KME, but I can say for fairly certain if you look at the numbers in the case of these other businesses, had we not purchased those companies when we did, they would not be in the marketplace today, which I think would exacerbate the problem that we have, and so I am very happy that we are continuing to build these trucks and offer these products to our customers.”
When Sen. Kim further pressed about alleged collusion or business moves to suppress market competition, Meyer denied such practice: “We have not participated in any anti-competitive behavior. We have 3,000 employees that go to work every day to serve firefighters.”
Meyer’s statement to the senators also pushed back on the allegations: “I want to be clear: Neither Oshkosh nor Pierce has acquired any other U.S.-based fire truck manufacturer. I am deeply proud that our growth has been organic — driven by innovation, a commitment to our customers, and high-quality support for Pierce trucks long after they leave our factory floor.”
Widespread disrepair kills, hurts service
IAFF President Edward Kelly cited an incident in which a friend, Boston Fire Department Lieutenant Kevin Kelley, was killed when his ladder truck lost its brakes on a hill, careened at 68 mph down the street, crossed four lanes of traffic and two trolley tracks, crashed through parked cars and a brick wall into the first floor of a high-rise housing a daycare center. This occurred during a period when Boston’s apparatus fleet was in “incredible disrepair,” Kelly said.
Kelly also shared that during a fire on Chicago’s west side, Tower Ladder 14’s aerial device failed when firefighters attempted to deploy it for rescues. The hydraulic aerial had to be shut down and restarted, causing critical delays which may have resulted in the deaths of four civilians, including a 5-year-old child and the child’s mother. The same faulty spare truck remained in service months later.
Rubin reported having one-third of his engines out of service for need of repair at one point in 2023: “Replacing the standard triple combination pumpers that we operate was four SUV Chevrolet Tahoe vehicles with a loaned brush truck from a neighboring community. No ladders, no hose, no significant amount of water, no rescue tools and only limited emergency medical equipment. Quite frankly, that’s not an acceptable response model for ours or any community.”
What’s next
“Your business models are identical,” Hawley said of Pierce and REV Group. “Your customers hate them. They hate your business model …. It’s killing them. It’s literally killing people, and yet you’re both doing it and making ungodly sums of money.”
The senators said the apparatus manufacturers need to work to increase capacity by doing more for facilities, workforce and production lines to return to pre-pandemic delivery times. Standardized product lines were suggested as a way to lessen the number of customized trucks rolling off the assembly line as a way to contain costs. But still, repair parts are less available, and maintenance networks must be improved, given consolidation among resellers around the country.
Additionally, Warren asked Virnig and Meyer to be open to a study by the Federal Trade Commission.
“We’ve been fair, honest and transparent with our customers … I don’t believe we have anything to hide,” Meyer told Warren.
