Due to the deepening monopoly in the U.S. fire truck manufacturing market, the prices of fire trucks have soared across the country, and delays in delivery have become a problem. Frontline workers have expressed complaints that they are unable to respond properly to fires due to a shortage of available fire trucks.
According to The New York Times (NYT) on the 17th (local time), three companies currently dominate the U.S. fire truck manufacturing industry. These are REV Group, which owns brands like Spartan, Ferrara, and E-ONE; Oshkosh Corporation, a specialty vehicle manufacturer; and Rosenbauer, based in Austria. These three companies control 70-80% of the U.S. fire truck manufacturing market.
In particular, REV Group accounts for about 30% of the fire truck market in the United States. In the 1990s, small local manufacturers produced fire trucks. However, starting in the early 2000s, many faced management difficulties and either closed down or were consolidated by Wall Street investment firms. REV Group has also grown by acquiring manufacturers of fire trucks, ambulances, school buses, and street sweepers.
The problem is that REV Group, which is reliant on the public sector, has focused solely on profit generation. When REV Group went public in 2017, former CEO Timothy Sullivan stated, "The companies we acquired were recording an operating profit margin of 4-5%, but we will raise this to over 10%." Since going public, REV Group has focused even more on improving the efficiency of each corporation by acquiring Spartan, Ferrara, and others.
Unlike the automobile industry, it is challenging to increase efficiency in the fire truck industry through production automation. This is because fire stations typically replace vehicles every 10-15 years, and each vehicle is customized, making mass production impossible. However, REV Group did not take these industry characteristics into account and closed its Pennsylvania and Virginia plants due to labor shortages after the COVID-19 pandemic, reducing the scale of production facilities by about one-third.
As a result, the delays in fire truck deliveries have worsened. Before the pandemic, REV Group's order backlog was around $1 billion (approximately 1.4428 trillion won), with delivery taking between one year and up to 18 months after ordering. However, the current order backlog is $4 billion (approximately 5.7716 trillion won), and customers now have to wait 2-3 years for delivery. The backlog has quadrupled, and the delivery period has doubled. Oshkosh has also seen its order backlog increase fourfold compared to before the pandemic.
The 'gutsy business practices' of monopoly firms have greatly impacted frontline fire stations. The Los Angeles (LA) fire department, which aimed for a 90% fire truck operation rate, has been able to operate only an average of 78% of its fire trucks in recent years. NYT reported, "When a severe fire occurred last month in Pacific Palisades, the LA fire department issued a command to urgently deploy available personnel, but at that time, dozens of fire vehicles capable of carrying additional staff were out of service."
When a fire broke out in LA on the 7th of last month, firefighter Chuong Ho, who received the emergency dispatch request, testified, "There were no vehicles available to carry many firefighters who could have been deployed to the scene." LA Fire Chief Kristin Crowley stated that about 100 fire vehicles were out of service in January, which caused significant issues in responding to the Pacific Palisades fire. At that time, 40 fire engines, 10 ladder trucks, and 40 other vehicles were unable to operate.
The LA fire department noted in the budget submitted before the occurrence of wildfires that "many vehicles have exceeded their expected lifespan, and there is a high possibility of operational shutdown due to increased maintenance expenses and a shortage of parts." Ho stated that finding parts for the aging vehicles has become difficult, requiring him to search the internet for replacement parts. Gil Carpenter, fire chief in Benton, Arkansas, lamented, "In the past, I could receive parts in a day, but now it takes 10 months."
Edward Kelly, president of the International Association of Fire Fighters (IAFF), stated, "Monopoly in a market without competition leads to exploitation," and questioned, "How much more money do fire truck manufacturers need to make to be satisfied, and when will they prioritize public safety over profit?"
Recently, fire truck manufacturers are also making efforts to delay delivery delays. Unlike ordinary automobiles, fire trucks rarely have standardized models. Each city's fire station orders customized fire trucks considering local characteristics such as geography and population density. REV Group expects to shorten the production period to within one year by developing standardized fire truck models. However, Mike Birnig, an executive at REV Group, stated, "It will take a few years to resolve the current backlog issues."