D&H Hits Jackpot with New Location

Fontana is not the garden spot of Southern California. Then again, it was never meant to be. The guardians of the state's pristine coastline have decreed that the less glamorous businesses should head east. And so they have.

The truck industry has migrated to Fontana, about 10 miles east of Ontario International Airport, and is concentrated northeast of the intersection of two major freeways- Interstate 15, which runs south to San Diego, and Interstate 10, which ends its coast-to-coast, east-west stretch at the Pacific Ocean in Santa Monica.

In January 1999, Todd Whitehead, president of D&H Truck Equipment Inc, came to the conclusion that he either had to expand his San Diego facility or start another one somewhere else. D&H ended up in Fontana, where it operates from a 40,000-sq-ft shop and has bolstered its distributor role by launching a successful manufacturing foray into water tanks and trailers.

D&H couldn't be situated in a better spot. Even a negative becomes a positive: When the area is turned into LA's largest traffic jam-with up to 120,000 motorsports fans cramming into California Speedway on Cherry Street, just a few blocks from D&H's Randall Avenue location-D&H has no problem finding people willing to park on its property.

In the Heart of Truck Hub Fontana is a perfect base from which D&H can service its dedicated clients.

"It's got good freeway access-the I-15 and I-10 corridor, products coming in from the Midwest, some of our major suppliers," Whitehead says. "It's good, clean freeway access. And vice versa. We ship a lot of stuff out of this location. There's a lot of light manufacturing that goes on around us, so suppliers are close and we can keep inventory levels low.

"We're really optimistic about the potential for growth here. Fontana is kind of a hotbed for trucks. If you kept going on Valley Boulevard for the next 10 miles, it's just trucks. Forever. It just goes on and on."

Says general manager Barry Hanlon, "It's a truck haven." And, soon to be, truck heaven.

Fontana-based Kaiser Ventures has received permit approval for 70 acres of land on which the undisclosed buyer will build what executive vice president Terry Cook is calling "the largest truck stop in the United States." The truck stop will be located one mile east of the I-15/I-10 interchange, through which 44,000 semis pass through each day.

Describing the benefits of the truck stop to D&H and surrounding industry, Whitehead says: "Just the increased traffic, repair, parts and service business will pick up. This will become the shipping corridor, if you will, to LA, to the West Coast. Stuff coming in and out basically stages here. And then, when it has a delivery time, it moves on into the valley. From a transportation standpoint, this will be a hub-and it already is-of trucks moving in and out."

Says Hanlon, "The Peterbilt dealership up the street is the largest west of the Mississippi. Freightliner has one of its largest facilities here. They wouldn't be as large as they are if something wasn't going to be happening."

Full-Scale Push to Water Tanks D&H had dabbled in water tanks at its San Diego facility, buying premanufactured tanks and installing them. The full-scale push was almost an accident, the way Whitehead describes it.

"We have a large fleet customer who basically came to us one day and said, 'Our tank supplier is not doing the job; we'd like you to try,' " he says. "I said, 'We've never really built tanks before.' He goes, 'Well, you're going to start today. Here's an order for 50. Let's see how you do.'

"We had built a handful prior to that-customized water tanks. But in a production setting, we hadn't."

The fleet company had total trust in D&H. And D&H had a desire to please.

"It's been a relationship that's been building for the last seven or eight years," Whitehead says. "They've used a wide variety of products from water trucks to dump trucks-mostly construction-related equipment. We started off with them and they asked, 'Can you make a dump truck?' 'Yeah, sure.' The next year, 'Can you make a flatbed dump?' We've just added products every year to the scope of what we've done for them. Finally, two or three years ago, they said, 'Build everything for us. Nothing goes anywhere else.' "

Relying on Word of Mouth Whitehead says that is fairly typical of D&H's experience. The company has no outside sales people. Along with Internet sales and the exposure that trade shows provide, it relies on long-term relationships and the likelihood that word of its quality and service will be spread.

"Our base of business has been built on high quality, a good name, doing what we say we'll do when we say we'll do it. We don't press the flesh. There's not a lot of high-pressure sales people. We've got some basic order-entry guys who sit in the office and take orders from repeat customers.

"Our marketing philosophy doesn't facilitate big swings. It's very methodical and slow, and it works its way out from a center point. We have a lot of the same customers we had when we started 20 years ago. They've grown, and we've grown with them. We're not trying to steal our competitors' customers. But when we get a chance to do business with them, we can generally hang onto them."

Whatever the philosophy is, it appears to be working.

In the tank-building sector, for example, others have enlisted D&H's services. Whereas the fleet company purchased 90% of D&H's tank production a year ago, the new business has pushed that number back to 70%.

Tapping Into Tank Market Water trucks are a high-priority item in Southern Callifornia to wet the ground for construction. Transporting it to locations where it's needed will become an even bigger business now that the city of Los Angeles has announced it will be starting a program of water rationing because it expects drought conditions in the coming 20 years.

D&H installed shear, press brake, and pyramid rolls to facilitate the tank-building process. Two plates are welded together and then run through the pyramid rolls. After the end caps are attached, the tanks are water-tested and then run through the paint booth.

The 2,000-gallon tank is the most popular, but D&H also manufactures 4,000-gallon tanks.

D&H is utilizing the team concept, with its most skilled technicians leading groups of four to six of its least skilled technicians. This minimizes the amount of questions going back to the foreman.

D&H has set up its shop so that it can produce a fleet of identical trucks or individual, custom-built trucks. If it has 10 trucks to build, it builds them at the same time. The same team has been trained to build a variety of trucks. When a chassis is brought in, it flows through the shop like a production line. The bay doors on each side of the building facilitate the speedy flow of materials and trucks.

"One of the challenges that always faces a company like ours is that one day you're building dump trucks, the next day you're building flatbeds, the next day you're building water trucks," Whitehead says. "With the way our building is laid out, we've been able to create a real flow and structure, which helps you in your quality process and helps you make sure your units are complete when they actually roll out of the plant, because you have a system for moving them through.

"We've streamlined the process. In the old days, we'd traditionally build a product onto a truck and then take it down to the paint shop. We've perfected that process with a number of products up here to the point where we build the product on a cart, bring it through the paint booth and then mount it on a truck. At least for people in the West, that is a novel concept. They do that in the East a lot. That hasn't quite caught on fire out here."

Customer Base Is Broad Whitehead says that although D&H deals with several large fleets, including Servicemaster, it is not focused on them or any other segment, whether it's utilities or small end-users.

"We feel we are a true front-line distributor," he says. "Some others focus on van bodies. We sell pretty much everything besides trash and ambulance and fire. If it goes on the back of a truck, we put it together at one point-or we will. Our customer base stretches from contractors to guys with pickups."

D&H is not affiliated with any chassis pools, but it has applied, Whitehead says. D&H was founded in 1959 by Duane and Helen Smith. (Duane would go on to become president of the National Truck Equipment Association in 1973.) They sold it to Dale and Juanita Klingler in 1981. Whitehead started working for Dale, his father-in-law in 1982, and then he and his wife, Becky, bought the company in 1998. The Fontana property was bought from Mirk Inc, an aerial basket rental company. Whitehead, a distributor trustee for the NTEA, also opened another plant in Ruston, Louisiana.

"I like the ability to create, to build, to solve problems for customers as far as design and structural needs, to accomplish a task for them," Whitehead says. "It's the ability to build something that makes somebody more efficient in what they do. It could be simple stuff: A customer comes in and says, 'I can't get water tanks built how I want them, where I want them, when I want them. Can you solve that problem for me?' So you make a plan to accomplish that task."

Portable Crane Problem Solved Whitehead says a customer came in one day and explained his problem: He was renting a huge portable crane to transport a concrete batch plant to the side of the freeway. Every 10 miles, his crew would have to take down the batch plant, move it, set it back up, pour into dump trucks, and dump into the paver. Could D&H design a truck with a large portable crane that occupied the capacity of the truck? Whitehead said yes.

"The guy figured it saved him about $25,000 a move," Whitehead says. Says Hanlon, "We do things from mom-and-pop little stuff to big equipment. Most truck houses don't do the broad spectrum."

The whole operation is a labor of love for Whitehead. In an area where abandoned shacks and barbed-wire fences are the norm, D&H stands out with attractive landscaping that includes palm trees and a variety of flowers and bushes.

Whitehead owns five acres of land at the Fontana site, which allows room to expand the back of the building. But with the chassis pools likely, D&H could use more space, so it is negotiating with the owners of the adjacent property.

"There's open spaces on both sides we'll probably buy to ensure we'll be able to stay here for a long time," Whitehead says. "Yeah, I envision us here 20 years from now, building spaceships or something."

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