Posts Tagged REV Group® Announces Plans to Shift KME® Production to Other REV Fire Group Facilities

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NESQUEHONING, PA. — Word flowed down through the valley: The firetruck factory was closing. Nearly 400 people would be out of work come April. After 75 years, KME was shutting down. Even in a town used to taking hits, this was a blow. The coal jobs were all but gone. The textile mills went overseas long ago. But Nesquehoning still had its firetrucks — rolling out of the factory with lights, sirens, and gold-leaf lettering on the doors.

In many ways, KME was closing at the best possible time for its workers.  The labor market was hot. Companies were desperate to hire. The roads outside the KME factory here in the foothills of the Pocono mountains were dotted with “Help wanted” signs. But something harder to measure was being lost.

Workers across the country have been quitting their jobs at historic rates during the pandemic — with manufacturing workers leaving at the highest clip, according to federal data. Many factory jobs, after years of sluggish wage growth, now offer pay on par with the service sector. And companies still wield enormous power over workers.

At KME, the allure of working for the hometown company had been fading for several years, ever since a private equity firm bought the company from a local family. And it became clear to many that the kind of blue-collar jobs that sustained places like Nesquehoning were being streamlined out of existence. The fate of KME was no longer in local hands after it was sold in 2016. The new owners went public a few months later.

Today, KME is just one of six firetruck brands owned by a single company called REV Group. In the fall, its executives announced that the Nesquehoning plant would close and production would shift to other states.

KME — also known as Kovatch Mobile Equipment — got its start when Sonny Kovatch returned from the Army and opened a small garage in his hometown in 1946. He added a dealership. He started making trucks. He kept growing, adding in oil refueling trucks and fire engines.

Kovatch grew KME into the country’s largest private manufacturer of fire apparatus. The company sold every type of truck. It sold to small volunteer agencies and major departments in cities such as Atlanta, Boston and Philadelphia. Los Angeles County bought 250 firetrucks. New York City bought nearly 100. A couple of years ago, KME delivered two new trucks to the D.C. fire department. The small fire departments in rural Pennsylvania were especially loyal.

At one point, the world headquarters of KME in Nesquehoning employed more than 700 people in a town of 3,300. When times were good, everyone knew to stay off the roads about 3:30 p.m. on weekdays, when the day shift let out. The surge in traffic fed the town’s three gas stations and a small grocery store, amenities that residents said they probably wouldn’t have without KME.

The town still had problems. Poverty was persistent. Some of the houses sitting tight by the road in the heart of town looked tired, their front porches worn and the siding faded. A town that was once home to six or seven churches now had two or three. There were fewer neighborhood bars, too.

KME sustained the town in other ways. It helped sponsor the local Anthracite Little League — the company name splashed across jerseys and posted on an outfield banner at the town’s baseball diamond. There was a scholarship fund named after Sonny Kovatch. The family also donated money for new baseball bats and football helmets. They chipped in to refurbish the high school’s weight room.

The company’s success always felt like a hedge against the decline of the coal industry and the town’s remote location well off the turnpike. Local leaders had tried different initiatives to attract new industries to town,  but none of the efforts worked like making firetrucks.

Employees tended to stay at KME. Craftsmen refined their skills. Painters made sure the trucks gleamed. The work stayed interesting because the factory was not run like a typical assembly line. The bends in the water pipes were done by hand, not with a robot. Employees learned new skills rather than doing small, repetitive tasks. When KME was family-owned, a job at the factory was something to hold on to.

The pride in having a job at the firetruck factory trickled down to the workers’ children, too. Teachers could see it. The school district also depended on KME for its tax base.

The impact of the factory’s closing was still being worked out. But the Panther Valley School District was already in trouble. Its six-year college graduation rate was under 12 percent. The district was severely underfunded, despite having the state’s 10th-highest property tax rate. Now, it was one of several districts suing the state over education funding.

Even as Panther Valley saw property assessments increase in 2020, the amount of property tax revenue going to the schools declined because so many other properties fell into blight.

In 2015, KME worked on a coveted contract to supply and service more than 90 pumpers to the Fire Department of New York — the nation’s largest. Getting its business was a big deal — a seal of approval for the company and a shot in the arm for the town. It was one year into that New York City contract that the Kovatch family announced they were selling. The price was never revealed. The family declined to comment for this article. But by the time of the sale, Sonny Kovatch had been dead four years, and his son, John Kovatch III, was running the operations.

The new owner was REV Group, which was itself a new company, created by the private-equity firm American Industrial Partners to run the specialty-vehicle makers it had snapped up. A few months later, REV Group went public in a $275 million IPO.

REV Group’s track record could be summed up by a graphic in its 2021 annual report, titled “A history of consolidation.” The Brookfield, Wis.-headquartered company today owns 17 firms.

In recent years, the company struggled to make money with KME. It lost $1 million a month in the past two years trying to turn it around. It was a culture clash, according to workers and officials in Nesquehoning. REV tried to implement a traditional production line with increased automation. It made business sense. REV could slash costs if it simplified tasks. But the business tactics collided with what made KME stand out.

The company started outsourcing some of its service work. And the new KME wasn’t afraid to fire people. In 2019, it laid off 15 percent of its workforce. In August, REV said it planned to close the Nesquehoning plant by April. The six-month warning was unusual. The company dangled $5,000 bonuses if workers stayed on.

thanks Martin

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Fire service news

REV Group® Announces Plans to Shift KME® Production to Other REV Fire Group Facilities

MILWAUKEE, WI — September 10, 2021 — REV Group, Inc. (NYSE: REVG), parent company of leading designers and manufacturers of best-in-class specialty vehicle brands, announces the transition of KME Fire Apparatus production to other REV Fire Group facilities over the next year, which will allow improved lead times, quality, and delivery for KME customers.KME has long-served municipal, state, and federal markets across the U.S. with its diverse range of custom apparatus including Aerial, Industrial, Pumper, Rescue, Tanker, and Wildland products. KME is renowned for its quality engineering, custom manufacturing, and dedication to deliver on customers’ specific apparatus needs. From its Tractor-Drawn AerialCat with Steel-Safe technology to the new X-Series Custom Pumper, KME consistently innovates to provide custom configurations based on unique fire department requirements.

“The KME brand has a rich and enduring legacy. Our commitment with this transition is to preserve the legacy by continuing to deliver to our customers and dealer partners what they have come to expect from the KME brand through their many years of valued loyalty to KME,” said Kent Tyler, president, REV Fire Group. “This shift in production locations enables us to better access our broad operational expertise and resources, provide custom engineering, enhance quality and improve delivery times by leveraging the advanced manufacturing capabilities that we have through the REV Fire Group network.  New and current KME customers can be assured that our commitment to manufacturing excellence will continue to bring quality and value to KME fire apparatus.”

Orders currently in progress will be manufactured at the KME facilities in Nesquehoning, PA and Roanoke, VA, with production expected to be completed by April 2022. Orders not yet in production and new incoming orders will be transferred to other REV Fire Group manufacturing facilities. Each order will be reviewed with the respective KME dealer and end-user customers immediately following today’s announcement. In addition, KME is meeting with employees from the Nesquehoning and Roanoke facilities to discuss options and reassignments.

“The transition of production has a significant impact on KME employees and is not a decision we take lightly,” said Tyler. “We are grateful to our teams at both locations, who have worked with us over the years to build the KME brand. We also thank the local communities for their ongoing support, and we would like to thank our dealer partners for their outstanding efforts in servicing our mutual customers over the many years and thank them in advance for their efforts in supporting this transition.”



NESQUEHONING, Pa. — A plant in Carbon County that makes custom firefighting vehicles is closing.

Kovatch Mobile Equipment is a landmark in the town of Nesquehoning, producing top-of-the-line custom fire apparatus for more than 50 years. KME’s parent company REV Group has decided to move production elsewhere.

Some KME employees who wished to remain anonymous told Newswatch 16 they were called into a meeting Friday morning and were blindsided when they were told that the plants in Nesquehoning would be closing. Their last day of work will be March 31, 2022.

In a statement, REV Group said the plants will complete orders already in production, but new orders will be sent to other facilities in the company.

Doug Budziak left KME in May. He wasn’t surprised by the news.

“I knew it was coming. I’m not going to lie. I told a lot of people when I left there, I was like. ‘Listen, this place is going to go down, and it’s going to go down fast.’ Look at the stock markets, and you see their production levels; it’s just going down. With labor costs going up, it’s just more sensible to go overseas and make more money that way.”

Residents say the plant’s closure will be a big blow to the small town.

“I’m not from here, but I know it matters to these people,” Budziak said. “I know one guy, he works there, his name is Dave. He’s worked there his entire life. He’s going to lose it all.”

Despite massive layoffs in recent years, current and former employees estimate 300 to 400 people still work at the plant. Budziak says many of them can find new jobs fast, as he did, but they might have to relocate.

“Some other company is going to come in and maybe do something with it, by all means. But by that time, it’s going to be two or three years deep. The next generation’s going to be good, but you’re screwing these 300 people out of a life for the next two or three years, if not more. You don’t know what that is going to do to this kind of community.”

REV Group says it will meet with employees to discuss possible reassignments within the company. If they’re let go, employees tell Newswatch 16 the company will pay a week of severance for every year they worked at the plant.

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