Week of August 5, 2002
Blockbuster Deal of the Week
from Site Selection's exclusive New Plant database
LOOKING FOR A PREVIOUS STORY? CHECK THE ARCHIVE.
Betting on Co-Location
American LaFrance Relocates to South Carolina, Projects 800 Employees at New Site
Site Selection Executive Editor
of Interactive Publishing NORTH CHARLESTON, S.C. South Carolina Gov. Jim Hodges happily clanged away on a chrome fire bell.
And for whom did that bell toll? For American LaFrance's business foes, said Vice President of Sales Scott Barnes, who called the governor-powered clanking "a warning . . . to our competitors."
It was that kind of day in North Charleston, S.C., as fire and emergency apparatus manufacturer American LaFrance (www.americanlafrance.com) opened its newly relocated headquarters.
Some 75 people now work inside the recently remodeled 283,500 sq.-ft. (25,515-sq.-m.) facility. But that number will rapidly rise, American LaFrance officials said. The North Charleston operation, they explained, will employ 800 by 2004. At least if the company's business plans pan out.
"Today, we begin a new chapter in the rich history of American LaFrance," said Don Stewart, president of the 170-year-old company.
Co-locating in South Carolina is a linchpin in American LaFrance's efforts to write that new corporate chapter. The company is centralizing its administrative, sales, engineering, purchasing and customer support functions in North Charleston.
Some of American LaFrance's manufacturing functions will also be relocated to the South Carolina site, company officials said. To accommodate that bulked-up presence, the firm plans to add an additional 100,000 sq. ft. (9,000 sq. m.) of manufacturing space. That new space will come online by early next year, company officials projected. At peak capacity, with two shifts, manufacturing operations in North Charleston could annually turn out 4,500 fire engines and ambulances.
"The new manufacturing plant is a tremendous asset to American LaFrance in serving its customers and will help us continue to expand our presence in the fire and emergency services industry," said Rainer Schmueckle, president and CEO of Portland, Ore.-based Freightliner, the DaimlerChrysler company that is American LaFrance's corporate parent.
Co-Location Will Accelerate Growth, Company SaysBut expanding the company's North American presence won't be easy, as American LaFrance officials conceded.
Total sales for fire engines and ambulances have plateaued at around 11,000 units during each year over the last decade. Given those market conditions, snatching existing business away from competitors is the only way to grow.
Co-locating so many operations at a single site will give the company a major boost in that mano-a-mano milieu, American LaFrance officials contended. "Moving into this large, state-of-the-art facility will further enhance our customer service and custom-manufacturing capability and will accelerate American LaFrance's growth," Stewart said. "We have great confidence in American LaFrance's ability to continue to expand its presence ... and this move [to North Charleston] is clear evidence that Freightliner intends to grow American LaFrance well beyond what it is today," said Freightliner COO Roger Nielsen.
Underutilized Manufacturing Space
The 137-employee plant, however, closed only a few months after the acquisition. The South Carolina plant was a victim of diminished North American demand for heavy-duty trucks, Freightliner officials explained.
The closed facility stood idle for almost two years. Things began to quickly change though earlier this year, when American LaFrance decided to co-locate on the site. The company spent $61.5 million in acquiring the facility and refurbishing it for co-location, American LaFrance officials said.
And the revamped operation, they contended, won't suffer the same here-today-gone-tomorrow fate that met the one-time Western Star truck plant. American LaFrance's core business - fire engines and ambulances - is much less prone to sharp market swings, company officials said.
Chassis Production, Service
All of American LaFrance's 210 employees in Cleveland are being offered an opportunity to relocate to North Charleston, roughly 250 miles (400 kilometers) to the south. Some 70 percent of those Cleveland workers are employed in hourly positions, while the rest are in salaried jobs.
American LaFrance's chassis production - the installation of engines, tires and transmissions - will remain in Cleveland, a small city roughly midway between Charlotte and Winston-Salem. The company will also keep an existing service center in Cleveland.
Freightliner, however, is leaving employment options open for American LaFrance production employees who chose not to relocate to North Charleston, company officials explained. Those workers will have the opportunity to opt instead to work in Freightliner's existing truck plant in Cleveland. Freightliner's Cleveland plant turned out its one millionth truck in 1999.
©2002 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.