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OMG. Scratch literally any problem in the US, and you'll find a monopoly underneath. Why were the LA fires so hard to fight? In part because a monopoly has bought the entire fire truck manufacturing industry, doubled the prices of trucks and quadrupled the waiting time for them. 100 of the 180-ish trucks LAFD owns are currently offline. #LAFires

https://www.thebignewsletter.com/p/did-a-private-equity-fire-truck-roll?r=2hk0s&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false
In conjunction with this consolidation, we've also seen a reduction in industry capacity from actions like REV Group's shutdown of its KME plants. What is curious about that shutdown in particular is that it came in the face of rapidly increasing demand: As federal COVID-19 assistance filled state and local government coffers, fire truck orders grew approximately 50% from 2020 to 2022, reaching roughly 6,000 for the first time since 2008. Since then, order activity has remained strong, hovering between 5,500 and 6,500. As a result, both REV Group and Oshkosh have seen their backlogs skyrocket over the last two years. The latest available data shows that REV Group had a $4.2 billion backlog_on fire and emergency. vehicle orders in the United States as of October 2024, while Oshkosh had a $5.3 billion backlog_on fire apparatus orders globally as of June 2024. And yet, neither company appears to be making significant investments in additional manufacturing capacity to rapidly cut down its backlog — or even concerned that multi-year delays in delivery might lead customers to bail on their orders.
Altogether, these facts paint an alarming picture. A handful of financiers have been allowed to transform a critical, once-vibrant industry into a rent- extracting racket. By consolidating the fire-apparatus industry through serial acquisitions, REV Group and Oshkosh appear to have consolidated the power to raise prices and throttle output of lifesaving equipment with impunity. Using that power, they have imposed years-long delays in delivery on their customers and exorbitant payment terms that will enable them to pass on production costs almost at will — leaving them little incentive to invest in new capacity or greater efficiency to relieve the bottleneck in the fire truck supply chain. They can reap rising stock prices and “attractive levels of return on invested capital” for their shareholders just by sitting pretty — all while fire departments across the country struggle to replace aging fire trucks, have to spend more on maintenance for older vehicles, and are forced to shirk on other budget items, like firefighter salaries, to get what equipment they can. But the ultimate harm of AIP's monopolization of the fire apparatus industry, of course, is not something that can be measured on a spreadsheet. It's a hundred fire trucks sitting out of commission while a disastrous wildfire burns whole neighborhoods of Los Angeles to the ground. It's lives lost, homes destroyed, communities gutted.
#lafires
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