By Matthew French
Staff Writer

Since Freightliner announced its decision early this month to divest itself of the Ladson-based American LaFrance fire and emergency vehicle manufacturing business unit, speculation has begun about what will happen to the 460,000-square-foot facility and the more than 270 people left behind.

“My understanding is that they will bring in another Freightliner-related company into that facility,” said Steve Dykes, director of Charleston County’s economic development. “We’ve been on a rollercoaster ride with that building ever since Western Star left. But Freightliner and DaimlerChrysler have a vast array of different automotive projects and have a deep reservoir from which they can choose to reutilize that building.”

DaimlerChrysler, the parent company of Freightliner, has specifically said that the manufacturing facility and office space will remain in the company’s portfolio, keeping open the possibility that the company may bring another manufacturing operation into the area.

“I have it on very good authority—from the horse’s mouth, so to speak—that they will not be selling the building,” Dykes said. “Now we have to wait and see what they will bring in next.”

The facility, however, was too large for the work being done there by American LaFrance, said Chris Patterson, Freightliner’s president and CEO. As a result, the business and costs were never as efficient as they should have been. He likened manufacturing emergency vehicles in the large facility to playing a high school football game in the Superdome.

Repeated inquiries to DaimlerChrysler were not returned.

Freightliner announced Sept. 7 that it would lay off or transfer 250 of the 528 local employees as it sloughs off a business unit that is no longer considered to be part of Freightliner’s core business. Patterson said despite the $1.5 billion North American emergency vehicle market, and forecasts of 15% annual growth, emergency vehicles are no longer a business of which Freightliner wants any part.

“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.

“As a result, we have been in discussion with a number of parties who have an interest in acquiring the assets of American LaFrance and several organizations have emerged as likely investors.”

Last year Freightliner sold more than 170,000 fire trucks and emergency vehicles in the United States and Canada, an increase of more than 30% from the previous year.

“Despite the occasional cycle, 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,” Patterson said.

Many of the 250 employees affected will be offered the option of transferring to Hamburg, N.Y., or Casper, Wyo., where American LaFrance has other facilities, Patterson said.

The company would not say what, if any, severance package was offered. The remaining 278 employees will continue to work at the facility assembling cabs and chassis while Freightliner looks for a potential purchaser. The transfer of work will begin in October and will likely be completed by the end of this year or the beginning of 2006.

While the purchaser of the company would be expected to acquire American LaFrance’s manufacturing and distribution infrastructure, the Ladson facility will remain a DaimlerChrysler asset. The buyer could either continue to operate the American LaFrance operations or sell it off, piece by piece. Patterson said the company has received considerable interest from would-be purchasers and is in the process of whittling down the list.

The S.C. Department of Commerce issued a statement saying it hopes the purchasing company would maintain a presence here rather than sell the company off or mothball the remaining production.

“Commerce looks forward to working with the company that eventually acquires American LaFrance, and we will do everything we can to help the new owners maintain and grow the business,” said Clare Morris, the department’s marketing and communications director.

Matthew French covers manufacturing for the Business Journal. E-mail him at mfrench@charlestonbusiness.com.

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