August 2007 Column

Fire Service Today

By by C. Peter Jørgensen

The news from E-ONE last month – the appointment of a new president — tended to overshadow the news from Pierce — the appointment of a new president. And the course each new president sets will significantly impact the fire apparatus manufacturing industry in the United States for many years to come.

Differences over direction between

E-ONE and its parent company, Federal Signal Corporation, led to the resignation of President Marc Gustafson three months short of his third anniversary there.

While E-ONE was seeking new direction, Pierce’s parent company, Oshkosh Truck Corp., was taking steps to ensure a smooth transition in leadership to a younger generation of managers.

Wilson Jones, who joined Oshkosh in 2005, was promoted to president of Pierce, and the man he’s worked under, Tom Fenner, was named president of the Oshkosh Fire and Emergency Group.

The Fire and Emergency Group, as a business unit, includes not only Pierce, but Jerr-Dan Corp., manufacturer of towing and recovery vehicles; Kewaunee Fabrications, builder of aerials for Pierce; the Oshkosh Airport and Municipal Products and Specialty Vehicles divisions; Medtec Ambulance; and BAI Brescia Antincendi International, the company’s European fire apparatus subsidiary based in Italy.

To oversee it all, the senior executive responsible for Pierce’s explosive growth over the last 10 years, John Randjelovic, has been promoted to chief executive officer of the Fire and Emergency Group. He also serves as executive vice president of Oshkosh Truck.

This orderly and impressive transition was organized and implemented by Oshkosh Chairman Robert G. Bohn, who runs the entire $3.6 billion company. And even higher revenues are expected this year, the result of recent acquisitions and Oshkosh’s position as a leading supplier of U.S. military vehicles.

Oshkosh is traded on the New York Stock Exchange under the symbol OSK. Federal Signal, which has been its closest rival in the fire industry, is also NYSE listed. Its symbol is FSS.

Federal Signal CEO Robert Welding has been busy making changes too. He appointed Peter Guile, 42, as president of E-ONE to replace Gustafson. Guile has been with Federal Signal for 11 years in its industrial systems division, but his background doesn’t involve truck manufacturing or truck sales.

Ironically, Wilson Jones, the new Pierce president, was a rising executive at E-ONE and Federal Signal until he left the company about four years ago. He will now be in head-to-head competition with his former company.

Gustafson, 55, joined Federal Signal’s Fire Rescue Group after more than two years as president of American LaFrance. Prior to that he was president of Volvo Trucks of North America. He had also served as executive vice president of sales and marketing for Mack trucks.

Guile will have some pretty big shoes to fill at E-ONE. Concurrent with Guile’s appointment, Welding announced that the Fire Rescue Group would split off its Bronto Skylift subsidiary in Finland into a separate company. Bronto Vice President and General Manager, Essa Peltola, has been named president and will report directly to Welding.

Guile, who is an engineer by education, came to Federal Signal from a British company that Federal Signal bought in 1995. His most recent assignment was smoothing the acquisition of Codespear, a software and communications company purchased in the last year. Federal Signal describes Codespear as “an interoperable communications platform for municipalities, counties, states and federal governments, and large industrial firms.”

Welding says that Guile will focus all his energy on E-ONE while Bronto, which has enjoyed record sales of its aerial device in Europe and Asia, will be free to concentrate on managing its own growth. E-ONE will remain the U.S. sales arm for Bronto.

In a telephone interview, both Welding and Guile emphasized the need to “rebuild the [E-ONE] dealership network” following loss of five dealers in the past two years or so, some switching to represent Rosenbauer.

Welding says he expects to sign a new dealer contract very soon in North Carolina, where C.W. Williams & Co. now handles Rosenbauer in North and South Carolina, Virginia and eastern Tennessee. When C.W. Williams was an E-ONE dealer, its sales volume was significant.

The Canadian E-ONE dealer in Red Deer, Alberta, which has not been replaced, ended up being Rosenbauer’s largest selling dealer last year. Meanwhile, the Ohio and West Virginia dealer, who had represented E-ONE for 15 years, switched to Rosenbauer last year.

The present E-ONE dealer in Texas is not renewing his franchise in August, but Welding gave assurances the state would be covered, saying, “Texas has been a very large market for us where we’ve had a significant share of the business.” He added that it is a “critically important area for us,” indicating that the new regional dealer would have to have a “very good service department.”

The press release announcing the E-ONE shake-up said Federal Signal was planning to increase “our investment in the dealer channel,” and later added, “We expect to invest about $20 million over the next 2 to 3 years to improve our operations at E-ONE.”

Welding explained some of that money would go toward helping dealers build or improve their service facilities, while much of it would be for what the news release called, “continuing to invest for new product support and improving our production assets.”

The mention of “production assets” raised the issue of Marc Gustafson having battled for nine months with local and state governments to get support for an all-new plant in Ocala, Fla. He secured some $26 million in local and state government assistance to fend off relocation proposals from other Southern states which solicited E-ONE on hearing the company was proposing a new plant.

The plant was to be the focal point for a new industrial complex being considered at Ocala International Airport. Two weeks after final governmental approvals in April, Welding pulled Federal Signal out of the deal, much to the surprise and consternation of everyone at E-ONE and most elected officials in Ocala and Marion County.

Before discussing that decision, Welding commended Gustafson for the four new apparatus designs that were unveiled in April, as well as his work on the E-ONE Configurator, a computerized software system that can figure out all the costs of a new apparatus and produce initial construction drawings in an hour or so, something that previously took a week or more.

E-ONE dealers nationwide now have the Configurator in operation. It gives them a significant edge over the competition when working with customers to see how various options or alternative designs affect the price of an apparatus.

“Marc did a very great job in developing new products and new tools such as the Configurator,” says Welding, but “we’re just getting into a different phase of the restoration of E-ONE.” He also says that right now “other things will be a higher priority” than a new plant, although “there will be a time in the near future that an investment in facilities will be appropriate.”

Welding says, “I vehemently disagree with those who’ve said Federal Signal is not committed to the [fire apparatus] business” and that now is the time “to burnish the brand and fill some of these dealer openings.” He is “very, very optimistic that by the end of 2008 we will demonstrate significant progress. There is nothing missing now from a product standpoint.”

The four all-new E-ONE models introduced at FDIC in April were well-received by the fire service (and by this magazine). The 100-foot aerial platform quint has a 15.5-foot jack spread utilizing E-ONE’s under-slung stabilizers, making it 2.5 feet shorter than others, and it carries 182 feet of ground ladders versus the 115-foot NFPA minimum offered by competitors.

The company’s all-new Quest model pumper has a vastly improved cab interior layout that is well-designed ergonomically and received positive comments from most at the FDIC trade show.

The Urban Pumper with its low hosebed for easy reloading and full-height, full-width compartment options along with various configurations for storing ground ladders looks like it will be a very popular fire truck for city and suburban departments. It has plenty of compartment space plus it can carry up to a 780-gallon booster tank.

Classic Fire LLC, a manufacturer formed about five years ago by ex-E-ONE executives and headed by Jim White, currently builds the wildland, initial attack apparatus, light rescues and commercial chassis pumper-tankers for E-ONE. Welding says that contract will be renewed so the main E-ONE production facilities now spread out over four buildings can concentrate on the company’s primary lines.

Welding is certainly right about one thing — E-ONE does have a full product line on which to build its future. It is now up to Peter Guile and the company’s dealership network to return the company to profitability.