It would take $80 million to create what Grumman Allied spent in 1987 on its Montgomery, Pennsylvania, truck body plant, according to the company that owns it now.
For that price, you would get an automated paint department — complete with multiple robotic painters — and a serpentine conveyor system to move truck bodies seamlessly through the assembly process. You would have a 234,000-sq-ft plant and 34 acres for storing incoming chassis and finished goods. And you would have the infrastructure you need to compete for the next $1-billion order for truck bodies.
The Kidron Division of Specialized Vehicles Corporation (SVC), however, did not spend $80 million for such a plant. SVC was able to acquire the facility for pennies on the dollar following the liquidation of Grumman Olson in 2003.
And while Kidron is not planning on a billion-dollar truck body order anytime soon, the company has big plans for using its newly acquired production capacity.
“There really isn't another truck body plant to compare with this one,” says general manager Tom Dolan, a Grumman veteran who worked in the plant during its heyday. “This facility was a capital intense structure built by an aerospace oriented company.”
Grumman's Montgomery plant was a high-octane plant when it was built in 1972 to produce modular homes and motor coaches, but it was turbocharged when the company received the contract to build the LLV (Long Life Vehicle) that the U S Postal Service ordered by the thousands in the 1980s. At its peak, the plant was producing 100 postal trucks per day and up to 50 dry-freight bodies. Automotive-style assembly technology helped make that possible, including an in-floor conveyor system that continuously moved the trucks through the assembly process. Robotically applied paint, part of the automated finishing department, also helped move truck bodies through the plant quickly. Although Kidron is not using the robots, the company says it can paint the typical vehicle in about 10 minutes.
“Without that contract for those postal service trucks, none of this would have made any sense. Grumman made a $42-million capital investment in 1987 — about $80 million in today's dollars — to get this plant ready to produce that order. There's no way to justify that kind of expense to build 10-20 van bodies and three or four trailers per day. We were very fortunate to have been able to acquire a facility like this for the price we paid.”
Grumman Olson had four truck body plants when the company went bankrupt in 2003. When the Grumman assets were sold during the summer of 2003, Kidron was able to acquire two of them — the Montgomery facility and a 146,000-sq-ft plant in Tulare, California. With the acquisitions, the Ohio-based manufacturer now has plants to serve the Midwest, Northeast, South (with its established plant in Lakeland, Florida) and the West.
“With plants only in Ohio and Florida, it was difficult for Kidron to compete nationally,” Dolan says. “But the two additional plants make us a lot more competitive.”
Gearing up for trailers
The acquisition provides geographic balance for the company, along with greater production capacity. It also makes it possible for Kidron to become a greater player in the trailer business.
Kidron, a specialist in producing refrigerated vans, has been able to capitalize on the growing trend toward refrigerated delivery trailers. But as the business has grown over the years, so has the size of the trailers the company produces. Kidron currently is using only 40% of the building, giving the company ample room to gear up for trailer production. And with plenty of room between support posts, the building will permit lengthy trailers to move through it smoothly.
“Refrigerated fleets aren't content with 28-32-ft local delivery trailers anymore,” Dolan says. “In just the past two years, we have seen a big increase in demand for longer trailers in these applications. Fleets are spec'ing a lot of 48-ft local delivery trailers, and we are building trailers up to 53-ft long.”
The Montgomery facility began prebuilding parts for trailers in April 2004 and assembled its first trailer in August.
Tooling for trailers
Prior to Kidron's acquisition, refrigerated trailers have not been built in the Montgomery plant. The company recently took a major step to increase its production of reefers by installing an insulation press. The press can simultaneously foam both sides of trailers up to 53 feet long and can accommodate all wall thicknesses that the company offers.
Kidron is equipping its Montgomery plant to be as self-sufficient as possible.
“We believe that self-sufficiency offers a lot of advantages,” Dolan says. “It lowers our costs, enables us to offer better quality, and reduces our lead times. Bottom line is that we are better able to serve our customers.”
Dolan says the plant has the fabrication equipment it needs to produce a wide range of parts and components for its truck bodies and trailers. The plant also is designed to do as much assembly work as possible off-line, with fully completed subassemblies being brought to the main assembly line.
“We are still in growth mode here,” Dolan says. “But with the acquisition of this plant, Kidron has the capacity to produce the size and volume of trailers that our customers are demanding. Orders are in place, and we are gearing up to produce a lot of trailers and dry freight truck bodies this spring.”
Despite the emphasis on refrigerated trailers, the first Kidron product built in Montgomery was a dry-freight van body.
“It was simple for us to start with dry-freight vans,” Dolan says. “Grumman had been building them right up until the plant closed. They had discontinued production of stepvans here, but the plant was in good shape to produce dry-freight van bodies.”
Grumman liquidated in June 2003, and SVC took possession of the plant in July. Kidron spent approximately six months planning how the plant could be adapted to produce the company's product line. Modifications and retooling began in March 2004, and the first Kidron vans produced in Montgomery were delivered in May.
“Our first order was for 283 trucks,” Dolan says. “We hit 100% efficiency after building just 42 vans, and we completed the order in 2½ months.”
Dolan credits an experienced workforce with the plant's fast start. “We primarily have long-term employees here,” Dolan says. “We have some recent hires, but a lot of our employees were here when Grumman was producing the LLV order in the late 1980s and early 1990s. Some of them were even here when the foundation for this plant was poured in 1972.
“This plant has had a culture of manufacturing. Grumman was a company that was committed to that idea. If they needed a bulkhead, they would machine it out of titanium and aluminum billets. That approach was true here — we have granite measuring tables and huge press brakes that you just don't see at most truck body manufacturing plants.”
Dolan was director of engineering at the Grumman Olson plant in Sturgis, Michigan, when potential buyers for the plant began to make inquiries about the Grumman Olson properties. He also had extensive experience with the Montgomery plant during the LLV days.
“I met the suitors, including representatives of SVC,” Dolan says. “Some of the potential buyers really didn't understand what this plant is all about. They viewed a lot of the features of this plant as just things that were in the way. We didn't want to have to convince them of the possibilities that this plant could provide. With all the industrial engineering that went into this plant, it would have been a shame for someone to rip out everything and produce for themselves a 275,000-sq-ft box. John May, though (Kidron's president), recognized immediately that this plant would allow us to build what we don't currently build and to be more efficient making the things we do.”