Manufacturing a comeback: American LaFrance CEO says business 'steadily improving' after fits and starts

A fresh executive team at American LaFrance LLC in Summerville is being driven by an urgent mandate: Accelerate the long-stalled turnaround of the 179-year-old firetruck manufacturer.

After yet another reshuffling of top management, the storied maker of customized alarm-blaring emergency vehicles is now under the direction of a new no-nonsense chief executive officer, Torben von Staden, who doesn't seem hesitant to shake up the company.

Von Staden, who most recently helped salvage several businesses from the automotive scrap pile for American LaFrance's owner, has recruited a team of industry experts to get the firetruck company back on track nearly three years after it emerged from bankruptcy.

But the new leadership faces uncertain economic times. City and county budgets, which pay for 90 percent of municipal emergency vehicle orders, are straining under shrinking tax bases. Firetruck orders at American LaFrance hit their lowest point in recent history last year, forcing the company to operate with a fraction of the employees it once had.

Beyond the financial consequences, there's the legacy of American LaFrance, which is an institution within the tight-knit firefighting community. Its antique vehicles made decades ago are displayed in numerous museums, and working models are revved up for parades down Main Streets throughout the country.

Von Staden said the company finally has gained its financial footing, noting that orders hit their lowest point just as he arrived last summer. He wouldn't say how many vehicles they produced last year but described the demand as 'steadily improving.' Asked if the company is profitable again, he grinned but declined to elaborate about earnings and other pertinent details of the business.

'We're not going to discuss specific financial information,' he said.

Heartache

What already has been disclosed is that American LaFrance has not produced the Cinderella-type ending that Wall Street troubleshooter Lynn Tilton had in mind when her investment firm, Patriarch Partners, snapped up the company in 2005 from truck-manufacturing giant Freightliner LLC.

Tilton said her interest in the business, aside from its moneymaking potential and loyal customer base, was heightened by the Sept. 11, 2001, terrorist attacks in New York. From her office, she watched as firefighters entered the World Trade Center towers and other burning buildings that day, some never to return. The experience cemented her affinity for struggling manufacturing businesses that supply gear to the military and emergency responders, she said.

'When I had the opportunity to buy this company, it was important for me to be able to serve ... those who serve us,' Tilton told The Post and Courier in a 2006 profile.

But American LaFrance has proven to be much more troublesome than she originally envisioned. Tilton acknowledged as much in a Wall Street Journal article last month that reported she had slashed revenues by half at the Summerville-based manufacturer in an effort to improve its profit margins.

'That was a purchase I made more with my heart than my head,' she said.

Vehicle orders at American LaFrance peaked in 2006 with about 500 firetrucks and 850 support trucks — enough work to keep 1,300 workers on the payroll across the country. It was mostly downhill after that.

The company encountered complaints about quality of some of its trucks, a slowing economy and a problem-riddled inventory control system, all of which pushed the company to seek protection from creditors in early 2008.

Von Staden arrived last year, a full two years after American LaFrance exited bankruptcy in May 2008, to find a company that he said had languished partly as result of a revolving door in the corner office. The top executive position at American LaFrance had changed hands seven times during the previous three years.

'There were so many (problems), I couldn't name what the biggest ones were,' said von Staden, who describes himself as a fixer of bro

ken companies, not a car guy.

Colorful owner

Tilton hired von Staden originally to help her firm venture into the ravaged automotive supply industry. At the time, parts makers found themselves squeezed between vendors that supplied them with raw materials and the big carmakers, he said.

Sensing an opportunity, Patriarch acquired three struggling Detroit manufacturers in 2005, then put in vigorous policies to get them profitable again. The companies slashed payrolls and closed all but seven of their 20 manufacturing plants. They were then merged into Global Automotive Systems LLC, which operates smoothly today, von Staden said.

He said Tilton is still hopeful for a similar outcome for American LaFrance.

'What she wants here is what she wants for a range of companies: to take a broken or frail company that would otherwise vanish — to take it to greatness,' he said.

As some local officials have learned, Tilton's personal style can attract as much attention as her investment acumen and portfolio of 74 companies that have estimated revenues of more than $8 billion and 120,000 employees. The Wall Street Journal article included a photograph of her in a tight black leather jumpsuit — which it describes as her typical office attire — with long, platinum-blond hair and high-heeled boots. The article described racy office decor that features whips and handcuffs from friends, daggers and new age paintings.

The tough-talking investor's feminine touch shows up on Patriarch's website, where a delicate tree branch in front of a purple background maps out her business ventures. The bottom of the page promotes her blog: 'From Dust to Diamonds.'

'I would say she is a uniquely brilliant businesswoman and a brutally honest person,' said von Staden.

Expert advice

Von Staden said that he and Tilton agree that even companies with great products can founder or fail under weak leadership. So since last summer, he has brought in a team of experts to help with the turnaround effort at American LaFrance, where the executive team includes a chief operating officer who formerly worked as a senior manufacturing executive at Toyota. Another top officer came from Freightliner, which sold the company to Patriarch.

Together, they are still cutting from the business what von Staden referred to as 'dysfunctionality.'

One example is the faulty computerized system that helped contribute to the bankruptcy filing. American LaFrance marketing director Richard Ball recalled how technological glitches wreaked havoc with the factory's inventory flow.

'It's like if you bought a computer at home, and it tells you to buy 35 gallons of milk and then 35 pounds of peanuts,' he said.

The fallout of that episode is still evident in parts of the Summerville plant. Between two aisles, employees have stacked seemingly endless rows of silver 90-gallon fuel tanks that now are to be shipped to a buyer who purchased them at a deep-discount auction last year.

Ball still vividly recalls the glut of ladders that came through the door.

'They were everywhere,' he said. 'I thought we could build a ladder to the sun.'

Von Staden said the system isn't quite right. Even after the overordering problem was fixed, the computer program was designed for large assembly lines that don't deal in custom orders. Just another problem to tackle, he said.

John P. McDermott of The Post and Courier contributed to this report.