WHEELS OF FORTUNE

American LaFrance ramps up operations after reorganization

Brad Nettles
The Post and Courier

Vehicles at various stages of completion sit on American LaFrance's production floor. Process improvements have helped the company cut the average time to build a vehicle by 13 days since the end of last year.

Brad Nettles
The Post and Courier

Benji Morris works inside the rear section of a fire truck at American LaFrance. The company is focusing on faster, more efficient production after a software glitch and a slowdown in demand pushed it into reorganization earlier this year.

Brad Nettles
The Post and Courier

Matthew Karmel

Brad Nettles
The Post and Courier

Jeff Barth

Brad Nettles
The Post and Courier

Summerville, designed to resemble a classic firehouse, includes a museum and gift shop.

The American LaFrance complex off Jedburg Road in Summerville looks as much like a museum as a vehicle factory.

In the headquarters lobby stands a restored 1904 American LaFrance Cosmopolitan Steamer, one of only seven in existence from an original production of 21. An adjacent area, near the gift shop, is home to another three early models, including a 1920 Type 75.

But while visitors to the complex are reminded of the company's 175-year history, employees from the shop floor to the executive suite are looking to the future.

After spending most of 2008 working through a relatively speedy bankruptcy reorganization, American LaFrance says it's getting back on track. On May 23, the company was given the green light to emerge from bankruptcy protection when a federal judge in Delaware entered an order confirming the manufacturer's financial restructuring.

It marked the end of an uncertain 17 weeks for American LaFrance, which sought protection from creditors in January, barely six months after the company moved into its new digs.

Shortly before announcing the court's decision to his 387-strong work force, President and Chief Executive Officer A. Matthew Karmel said the company's reorganization under Chapter 11 of the U.S. Bankruptcy Code was exactly that — a chapter.

"Now we can focus on the business itself," Karmel said.

Just in time

Buzzwords on the shop floor at the revamped American LaFrance are "lean" and "efficient." Jeff Barth, continuous improvement manager and a former employee of American LaFrance's previous corporate parent, Freightliner, was brought in to help shave valuable days off the manufacturing process.

LaFrance is a two-sided business: firetrucks, its core line, and "vocational" vehicles, such as garbage trucks. The faster an order moves through the assembly plant, the happier the customer generally is, Barth said.

Firetrucks at various stages of manufacture line the assembly plant. Workers assemble the complete vehicle, placing cabs on chassis, outfitting pumping houses, and hanging hoses and ladders on the exterior.

The plant turns out one complete firetruck and three vocational vehicles a day. From start to finish, manufacturing takes about 35 days: 13 days fewer than at the end of last year.

LaFrance has fine-tuned its "just in time" parts processes to eliminate waste, Barth said. Parts are on hand where they're needed, when they're needed.

Some recent improvements are simple and low-tech; for example, drawing chalk lines to mark where basic hand tools, such as screwdrivers and wrenches, are to be kept so production workers can get their hands on them quickly.

Previously, such simple process improvements were overlooked, a common occurrence during good times but easy to remedy when it's time to streamline, Barth said. The reduction in build time speaks for itself, he said.

"They're like surgeons," Barth said of the assembly line workers. "We don't want those people walking away from the table (to search for tools). That's what lean manufacturing is all about."

Dousing the flames

American LaFrance, one of the oldest manufacturers of emergency vehicles and other trucks in the nation, sought bankruptcy protection on Jan. 28 owing $85 million to its unsecured creditors.

The company blamed a depressed market and a problem-riddled move from North Charleston to its new Summerville location, among other factors. The filing followed a furlough of its work force in December.

In 1995, the company was bought by Freightliner LLC, at the time a subsidiary of DaimlerChrysler AG. Ten years later, in December 2005, Freightliner sold the company to a New York-based investment firm, Patriarch Partners LLC, led by Chief Executive Officer Lynn Tilton.

Soon afterward, operational issues began to surface.

In June 2007, as part of the 2005 agreement with Patriarch, Freightliner stopped tracking inventory, accounting, payroll and the manufacturing process for its former subsidiary. But American LaFrance's takeover of those functions stalled.

In its bankruptcy filing, the company said the system it set up with the help of a technology contractor had "serious deficiencies" that had "a crippling impact" on the company's operations. Inventory was in disarray, and workers were unable to find the parts they needed.

Then, a month after the systems switch began, the company relocated to its new, 500,000-square-foot plant. The move slowed production and created a host of problems that hit the company's bottom line.

Michael Gordon, who recently joined American LaFrance as director of sales, marketing and customer support, said the company ultimately failed in its execution after the planned break with Freightliner.

"One day you wake up and that's gone," Gordon said. "When we went live, the system fell apart."

But in March, the recovery began. The company started rehiring furloughed workers and began to ramp up production. Around the same time, the company restructured its upper management by tapping Karmel to replace previous CEO, Bill Hinz.

The new top executive came with 25 years of manufacturing experience and a doctorate in mechanical engineering from Princeton University. Before joining American LaFrance, Karmel was president for the Asia-Pacific region at MAG Industrial Automation Systems.

Despite the missteps and the reduced demand created by a sagging economy, the company will survive, Karmel said.

"We have an excellent product," he said. "Our customers stuck with us on the strength of our product."

Reach Peter Hull at 937-5594 or phull@postandcourier.com.