Talk about perfect timing. At virtually the same time that Ford introduced its new Super Duty F-Series to the truck equipment industry last fall, Scherer Truck Equipment (STE) celebrated the opening of its new Louisville, Kentucky, shop right across the street from where the new trucks are now being made.
With the sale of heavy-truck operation to Freightliner and Sterling Truck Corp, Ford no longer produces tractors and Class 8 straight trucks at the Kentucky Truck Plant. The sale has enabled the company to focus its manufacturing on light- and medium-duty trucks with gross vehicle weight ratings above 8,600 pounds. These are the most popular types of trucks for Scherer's shipthrough operation.
The STE shop in Louisville is the company's third to perform ship-through services. The other two are in Kansas City, Missouri, and Detroit, Michigan.
"We plan to serve the local market here in Louisville and to expand our shipthrough capability," says Walt Thomas, president. "And by having a location in Louisville, we are in a position to do work on more F-350 models.
"Until recently, Ford built them in Ontario or Louisville and shipped to us in Kansas City. The F-350 now will be built exclusively at the Kentucky Truck Plant. And our Louisville shop also puts us close to the production of the new F-450s and F-550s."
Ford's ramp-up of the retooled Kentucky Truck Plant is almost complete, Thomas says. The company is producing all of the intended models, with the exception of the long-wheelbase F-550 with 120-inch CA. The plant is scheduled to begin producing that model in April.
Getting Started The 12,600-sq-ft STE facility has been in operation since March 1997, giving the employees there a chance to get the shop up and running before the new Super Duty F-Series went into production. It also allowed the company to be ready for its grand opening, held last September when many in the industry were in Louisville for the International Construction and Utility Equipment Exhibition.
By the time the STE shop in Louisville made its industry debut, the operation had a staff of 15-a number smaller than other STE shipthrough locations, but one that Thomas expects will grow. By contrast, the Kansas City location employs 45 people, and the Auburn Hills location in suburban Detroit has 25 employees.
Like Louisville, the Kansas City and Auburn Hills locations offer shipthrough programs.
"Within five years, the Louisville location will be our top-volume operation," Thomas says. "That's because the Kentucky Truck Plant will be the center of Ford's commercial truck production. Because we are one of the few companies in the truck equipment business that has complete certification from Ford's Modified Vehicle Engineering, we will be able to offer shipthroughs for any Ford truck from a Ranger pickup to a Class 8."
Following the Formula
STE has set up its new shop using the same basic formula that has worked at its other locations.
"The key to our success has been to have trucks available to the customer, to offer a competitive price, quality installation, and to offer field training for our accounts nationwide and at each location."
Trucks are available to STE customers through bailment pools as well as shipthrough programs. STE keeps between 35 and 50 chassis in its Louisville pool, about the same as the other locations. STE operates a Ford pool at the Louisville branch. The Kansas City and Auburn Hills locations have Ford and Chevrolet pool chassis.
As is the case throughout the country, dealers use chassis pools as an extension of their inventory.
"That is the theory of a pool," Thomas says. "It is not meant to be a second-tier distribution system. It is meant to offer expedient delivery and a professionally spec'ed and installed package."
STE complements the normal demand for pool chassis with aggressive marketing programs to specific target markets. Depending on the time of year, the company conducts heavy promotions for the specific equipment packages it has developed for snow and ice control, lawn and garden, and other niche markets.
Convenient Location The Louisville shop is well-suited for the STE shipthrough operation. The facility is located immediately across the street from the Ford plant. The 6.5-acre site provides ample storage for chassis.
However, STE already has plans for more. The company will expand its yard as well as the shop, Thomas says. The yard, currently surfaced around the shop, will reach all the way to Westport Road, the thoroughfare separating the STE location and Ford's Kentucky Truck Plant.
The 12,600-sq-ft building will more than double in size, Thomas adds. Within two years, according to plans, a 140' x 90' addition will go onto the shop, as will a 2,500-sq-ft office area. Thomas believes shop volume will increase sufficiently to make the additions necessary within two years.
One of the major improvements STE made to the existing structure was to install a modified downdraft paint booth. "This booth enables us to match the quality of OEM finishes," Thomas says.
The company mixes its paints to match those that Ford applies to its trucks. By holding the freshly painted vehicles at 165 degrees F for 20 minutes, STE can move trucks quickly through the paint department-an area that frequently is a bottleneck for high-volume operations. Product, Market Mix
STE entered the Louisville market with a solid lineup of truck bodies and equipment. Among the manufacturers the company represents are Omaha Standard platforms, dumps, and utility bodies; Jerr-Dan wreckers; Warren dump bodies; Eagle Lift, Maxon, Thieman, and Waltco liftgates; Rawson-Koenig toolboxes; Liftmoore cranes, Monroe and Western snow and ice control equipment; and Dana power take-offs.
The Louisville location is geared up for the wholesale market. However, the company does have a relatively small parts display that generates local retail sales.
"We expect that our sales in the local market will be only about 25% of our total," Thomas says. "As we become established here, we believe 75% of our sales will be made on a shipthrough basis. The mix at Kansas City and Auburn Hills is between 60% and 65% from fleets, leasing companies, and shipthrough. The rest is local service. Louisville is a good local market, but a full 75% of our business should be shipthroughs because of the sheer number of trucks that we expect will be coming out of the truck plant across the street."
Making It Work STE has assembled a core group to get the new operation going. Eldon Goldenstein is the manager. Thomas' son Craig is the operations and parts manager. Don Helstern is in charge of the service department.
Most of STE functions, however, are centralized. All accounting operations are performed at the Kansas City location. Bob Newhaus keeps track of all chassis pool functions from his office in Kansas City. Purchasing is centralized as well but under Gene Short's department in Auburn Hills.
Other specialists include Mike Breightenbecker, computer operations; and Tim Katz, computer training for hardware and software.
Other Operations In addition to the Kansas City, Auburn Hills, and Louisville locations, the company opened a Chicago operation by purchasing Rouse Truck Equipment three years ago and renaming it STE Chicago.
The Chicago branch is the only one of the four that does not have shipthrough capabilities or a chassis pool. However, management likes having a business presence in the Chicago area. The location also gives the company an intermediate operation roughly halfway between Kansas City and Detroit.
Thomas went into business by purchasing Scherer Truck Equipment in Kansas City in 1968. He started small-the company consisted of himself and three mechanics-but it grew consistently. In 1984, the company relocated to larger quarters in Riverside, Missouri. Four years later, the first branch opened in Detroit to expand the company's shipthrough capability as well as to serve fleet accounts, railroads, utilities, and the local trade area. The Louisville branch is the fourth location that carries the STE name.
"We are changing the name to STE Inc," Thomas says. "The company no longer has any ties to Scherer, and customers find it difficult to pronounce the name."
Special Markets Thomas also is a principal in another transportation-related company, Central States Thermo King. He and his partner, Ronnie Kahn, purchased Central States in 1975. Like STE, Central States has increased the number of its locations significantly. In addition to its Kansas City, Saint Louis, Wichita, and Oklahoma City Thermo King dealerships, Central States operates in Dodge City, Salina, Garden City, and Liberal, Kansas; and Guymon, Oklahoma, primarily to service the meat-packing industry.
In addition, Central States also has its Special Products Division. The division sells and services air-conditioning and other products not related to Thermo King. Included in this division are cab air-conditioning products, small engines, satellite tracking systems, and locomotive air-conditioning.
Late last year, the Special Products Division opened a service facility in Barstow, California, to service air-conditioning systems for locomotives and recreational vehicles.
Looking Ahead Thomas has high hopes for the shop located across the street from the plant where Ford builds its commercial truck products.
"Risk and reward are tightly linked in the truck equipment business," Thomas says. "Shops like the one we opened in Louisville don't come without a lot of investment and significant support from vendors. Our game plan is to provide products and services that will keep us at the forefront of the vocational marketplace."