Freightliner divests fire truck unit; Looking for buyer

PORTLAND, Ore. — Freightliner LLC will divest its American LaFrance fire and emergency services manufacturing business unit.
The company is currently in discussion with a number of parties who have expressed an interest in acquiring the assets of ALF. Several organizations have emerged as likely investors, Freightliner says, adding that further details will be released as the company reaches a final deal.

A total of 528 direct and salaried jobs will be affected.

Based in Ladson, S.C., American LaFrance was acquired by the Freightliner organization in 1995 as part of a corporate expansion. Freightliner, a DaimlerChrysler subsidiary, controls Freightliner Trucks, Sterling, and Western Star commercial vehicle units.

ALF is the fifth largest fire and emergency services vehicle producer in the US, with a heritage dating back 173 years. It makes chassis, aerials, ambulances, pumpers, rescues and tankers.

Freightliner President and CEO Chris Patterson said that, as part of A product portfolio review, the company determined that the fire apparatus business will not continue as a core business of the group in future.

“While the company has been driving improvement programs in recent times and we believe the American LaFrance business has growth and profitability potential, we also believe this potential can be better realized by a company that has a focus on ALF’s core markets,” he said in a press release. “ALF will continue to require the services of an experienced workforce and capable management. Of course, Freightliner intends that all current market obligations will be fulfilled, as well as ensuring that current customers of ALF continue to receive the service and support that they have come to expect.”

Patterson said that while the successful buyer would be expected to acquire ALF’s manufacturing and distribution infrastructure, the Ladson facility was not part of the sale and would remain a DaimlerChrysler asset. Freightliner still intends to utilize the 460,000 sq. ft. plant and office building, situated just north of Charleston, for other purposes in its commercial vehicle business.

Two current ALF manufacturing facilities, at Hamburg NY and Casper WY are to take on the production of bodies which are being transferred from Ladson as part of an internal restructuring program.

“It is possible the new owner may seek to continue cab and chassis production at Ladson and perhaps retain a number of jobs through 2006 for this purpose,” Patterson said. “In the meantime, we are committed to transferring the body assembly operation out of the Ladson plant to meet operational and financial restructuring goals.”

He estimated the market for fire apparatus in NAFTA to be $1.5 billion — now recovering from weaker demand when municipalities faced difficult financial conditions earlier in the decade.

“Despite the occasional cycle,” he said, “the market for custom fire apparatus is expected to grow based on the need for more fire trucks, technology advances, increased federal funding for Homeland Security, and the need to replace older fire equipment.”