Pride and Pragmatism

We’ve just seen control of this country’s two biggest trailer makers sail away to foreign shores. Not far away, agreed, but distance doesn’t much matter in such cases. The fact is, they’ve gone. And the question is, does it matter?

In the wake of Manac and Mond being sold-100% in the former case, 54% in the latter-to much larger American trailer manufacturers, I’ve been pondering the implications. I’m sure many of you have been doing the same.

For my part, I’m mostly convinced by the arguments of the Canadian principals involved that, in the end, it’s a good thing. I say “mostly” because there’s this nagging national pride that’s maybe a little bit wounded.

Weren’t we good enough?

But that’s an inappropriate response, naïve, almost childish, because in this new world we have no choice but to look outside our borders for opportunities of all sorts.

And, as always, we still have to look outside for capital. It would be nice if the buyers in this case, Great Dane and Trailmobile, were headquartered in Winnipeg instead of Chicago, but what are the chances? Nil.

We’re good enough, but in a world where size matters, we’re just not big enough. End of story. I have no doubt about the capabilities of Great Dane and Trailmobile. They’re big and strong and good at what they do. They’ve contributed much to this industry over many decades. And, bottom line, I think it’s clear that they’ll make more of Manac and Mond than those two home-grown outfits could do on their own.

That means exports and jobs and long-term survival-in a continental, even a global economy.

“I believe this is just coming of age,” said George Cobham when I called to ask his opinion of the Manac sale (he’s pumped, by the way). “It’s a new era. I just see it as a sign of the times.” As president of Glasvan Great Dane Sales in Mississauga, Ont., holding the Great Dane distributorship for Ontario, he’s smack in the middle of all this.

And he has a unique perspective, because he was more than a little damaged when Roussy Trailers bit the dust in 1990.

Cobham bought 10,000 trailers from that solidly Canadian firm between 1981 and 1990, and suffered when-largely due to an Ontario government that couldn’t say yes to 53-footers, but couldn’t say no either-Roussy went under.

Competition from American manufacturers was an issue back then as well, in the early days of free trade, and his response to losing Roussy-going with Great Dane-proved a good one in the long run.

To put this consolidation thing in perspective, it’s worth remembering that Great Dane was itself the purchased company less than two years ago.

Why? Because the buyer wanted to merge it with its Pines Trailer subsidiary to create an even bigger entity. Again, in an era of tight margins and expanding markets, when efficiency is everything, size matters.

There are dozens of questions surrounding the new Canadian volume-trailer scene, but obviously the key one is how will the trailer buyer be affected?

One likely effect is that mainstream trailer models will be easier to get if production rates rise as expected.

Carriers buying from niche manufacturers will still do so, but there’s a good chance those smaller firms will have increased business if the two big boys turn away from specialty trailers to any extent.

They may do so, given the volume-oriented thinking of their new owners. Could the small players handle the extra business and retain decent delivery times? We’ll see.

The other key question here concerns price, and there are certainly those on the sales side of the fence who’d like to see trailer prices rise.

Nobody’s commenting on that one yet, and I’m not guessing. But a betting man might say that we’ll see modest hikes over time.

So, to go back to my initial question: does it matter that Manac and Mond have been sold to American firms?

Ardent nationalists may think so, but that’s on the level of theory and pride and principles and such. In the trenches, where you put your money down and simply demand a decent product that will help you make a buck, the answer is no.

That’s the pragmatic view, and it’s the right one.