Posts tagged: vehicles

Industry consolidation drives up fire truck prices

The International Association of Fire Fighters (IAFF) and the American Economic Liberties Project (AELP) have called on the Department of Justice and the Federal Trade Commission to investigate three fire truck manufacturers over claims of anti-competitive behaviour.

In a letter sent on 13 May, the organisations cited REV Group, Oshkosh, and Rosenbauer as having established dominance in the fire apparatus market, claiming their actions have led to price increases and delivery delays.

The letter explained that consolidation has reduced market competition, with just three firms now controlling around two-thirds of the US market.

It also argued that private equity involvement has encouraged cost-cutting measures and long delays, affecting emergency preparedness.

Equipment costs increase while service times lengthen

The IAFF and AELP stated that the average price of a pumper truck has doubled in the last decade, now often reaching $1 million, while ladder trucks can exceed $2 million.

The companies are also alleged to use “floating” price terms, which allow them to increase prices even after contracts are signed.

This has caused budget shortfalls that in some cases have led fire departments to cancel training or lay off staff.

Delivery times have also been affected, with some fire departments waiting more than four years for new trucks.

REV Group reported a $3.6 billion backlog in 2023, which grew to $4.2 billion the following year.

Oshkosh reported a global backlog of $5.3 billion.

Apparatus shortages affecting emergency readiness

The organisations cited equipment shortfalls in Los Angeles, where over 100 of the Los Angeles Fire Department’s 183 fire trucks were reportedly out of service during recent wildfires.

Many of the trucks in the LAFD fleet were originally built by KME, which was bought by REV Group in 2016.

By 2021, REV had announced the closure of KME manufacturing plants in Pennsylvania and Virginia.

REV Group said the changes were intended to standardise production across its brands.

Price and supply problems across the country

Other large cities such as Houston, Atlanta, and Seattle have reported challenges maintaining fire truck fleets.

In Evanston, Illinois, a new truck took 12 to 14 months to arrive even after negotiating to purchase a demonstration unit.

In Ann Arbor, Michigan, the fire chief said their next truck would cost $2.4 million and take four years to be delivered.

According to AELP, such issues now affect cities of all sizes, from small towns to major urban departments.

Cost constraints impact disaster recovery

Departments hit by natural disasters have also struggled.

After Hurricane Ian, the Fort Myers Beach fire department had to spend $1.7 million of FEMA funding on a single ladder truck.

In Grant, Pennsylvania, even a federal grant worth over $500,000 was not enough to buy a truck, and delivery delays added several years.

According to AELP, these constraints undermine efforts to rebuild emergency services.

Broader impact across fire department supplies

The joint letter also highlighted rising prices in other fire service products, such as air supply packs, which increased from $7,000 to $12,000 over the last decade.

Fire department software has also become more centralised, which the letter warns could make systems more vulnerable to cyberattacks.

ESO Solutions, a fire and emergency software provider, was named in lawsuits following a data breach that affected 2.7 million individuals.

The letter urged the FTC to investigate software consolidation and potential data security risks.

Federal recommendations for antitrust enforcement

The IAFF and AELP called for immediate investigations by federal regulators.

They urged the FTC to use its powers under Section 6(b) of the FTC Act to investigate how consolidation is affecting prices, delivery times, production capacity, and public safety.

They also recommended that regulators examine whether firms are using contractual clauses to restrict competition or impede customer choice.

Firefighter groups demand regulatory action

IAFF General President Edward Kelly said: “Consolidation among fire apparatus manufacturers, largely controlled by private equity profiteers, is driving up costs and delays of critical vehicles”

“We cannot allow Wall Street interests to put profits over public safety”

Nidhi Hegde, Executive Director of AELP, said: “This consolidation is textbook monopolisation – leading to price gouging, plant closures, and years-long delivery backlogs that put communities in danger”

“It’s time for antitrust enforcers to act before this chokehold on emergency infrastructure does even more damage to fire departments across the nation”

IAFF and AELP urge investigation into rising fire truck prices: Summary

The IAFF and AELP have written to the US Department of Justice and the Federal Trade Commission requesting investigations into possible anti-trust behaviour by fire truck manufacturers.

The letter accuses REV Group, Oshkosh, and Rosenbauer of consolidating control over the fire truck market, leading to higher prices and long delivery times.

REV Group alone holds about one-third of the US market.

Prices for pumper trucks now average $1 million, while ladder trucks can exceed $2 million.

Wait times for new vehicles can extend beyond four years.

Cities such as Los Angeles, Houston, Seattle, and Ann Arbor have reported problems with equipment shortfalls.

Private equity acquisitions and plant closures have contributed to production constraints.

Other fire service products and software are also affected by consolidation and cyber risks.

The IAFF and AELP have called for federal enforcement action and broader investigations into emergency vehicle and supply markets.