Did a Private Equity Fire Truck Roll-Up Worsen the L.A. Fires?

https://www.thebignewsletter.com/p/did-a-private-equity-fire-truck-roll

What I’ll show you in this piece is that the increasing price is a result of a private equity firm, American Industrial Partners, consolidating the fire truck industry and forcing up prices across the board.

For decades before the 2010s, the fire apparatus industry was characterized by relatively stable (inflation-adjusted) prices and ample production capacity.

Then, however, AIP bought multiple fire-truck manufacturers and rolled them up into conglomerate called the REV Group.

Although AIP initially made a show of allowing these manufacturers and their distributors to continue operating independently, under the surface it quickly moved to operate them as a single firm, like a food conglomerate selling a bunch of different brands that all appear to be different companies.

As one industry executive has observed, “There are now times when all vendors at a bid table, each with a ‘different’ product, are all owned and managed by the same parent company. How is that competitive for the purchaser?”

The answer, of course, is that it isn’t. And you don’t need to take my word for it. REV Fire Group Vice President of Sales Mike Virnig made it clear in 2020:

“What I won’t tolerate is negative selling,” he said. “I won’t tolerate it with our competitors, and I won’t tolerate it within the group. If I even get a hint or see anything like a dealer taking a shot at another dealer, we step in and say, ‘Stop it.’”