Funding for fire department’s fleets will soon get tighter than it’s ever been before, predicts Jim Hebe, president and CEO of Seagrave Fire Apparatus. In an exclusive interview at Seagrave headquarters in Clintonville, Wis., Hebe said he believes the fire service will come under intense pressure to monitor their vehicles’ operating costs.

Hebe has a 30-year track record in the truck industry, starting as a salesman for American LaFrance in 1971. He owned and operated a successful Kenworth truck dealership and held a leadership position in sales and marketing with Kenworth Truck Co. before joining Freightliner LLC as executive vice president of sales and marketing in 1989. He was Freightliner’s chairman, president and chief executive officer for almost a decade and was CEO of its subsidiary, American LaFrance. Hebe and a group of private investors acquired FWD, parent company of Seagrave in 2003.

FC: Based on your 30 years experience in the fleet trucking industry, where do you see emergency vehicle fleets headed?

Hebe: I think after 30 years in the truck business -- in all kinds of vocational businesses -- I step back and look at the fire service and ask what’s different about how the fire service operates and yet what’s the same?

One of the things that will start happening is that for the first time in a long time the fight for money for apparatus is going to become more acute and tighter than its ever been in the past. We’re going to see a constraint on financial resources become more than it has ever been in the past and will not change in the near term.

Look at all the things that we deal with now as a country: homeland security, wars, or prescription drugs for seniors, sustaining Medicare, and education. These things are going to be a drain on resources in the near term and are going to have a cascade effect down to our customers. Money from the federal and state level will be spent other places and it’s not going to be available. It’s going to take the money available to fund apparatus and it’s going to go to other places.

FC: How can a fire chief prepare for this further tightening of funds?

Hebe: I think a fire officer today needs to ask ‘where am I going to get the money to provide the services I’m doing now and will have to do in the future?’ and apparatus is a big part of that.

This is not unusual. It’s the same thing that hit the truck business in the 80s. When deregulation hit the trucking industry, suddenly all of the guys that never had to think about it wondered, ‘Where am I going to get the money to buy my trucks?’ And suddenly it became a big issue. What it did was force customers in the truck business to look at costs a lot more dramatically than in the past.

I bet you today, that if I asked a couple of our large customers -- “Do you know what your operating costs really are in your fleet? Do you know what your fuel mileage is per mile or per hour? Do you know what the costs are to operate specific pieces of equipment is? Do you know what the cost per mile is to operate a Seagrave versus an American LaFrance or Pierce?”-- not one of them would know.

If I look back, I could have said the same thing about the trucking business in the ‘60s and ‘70s. When money became an issue and deregulation hit, profits were squeezed, revenue became an issue for the truck customer. What did they do? They turned around immediately and said, ‘How do I take costs out of what I do today? How do I lean down and how do I get more out of a dollar of revenue from what I generate?

From their perspective, [the issue was] how to compete in a much more cost-conscious environment. They couldn’t raise their prices, so they had to lower their costs. Well, guess what? That’s where the fire service is today. They’re not going to be able to raise their revenue. They’re not going to be able to get more money. We’re going to have to take costs out and start talking about really tracking costs to a level that private enterprise tracks costs on the truck side.

FC: Will it matter if it’s small fire department or a metro department?

Hebe: To a great extent, at the end of the day all we operate is big truck fleets. The fire service is nothing more than a big truck fleet with drivers that do something more than just drive.

It’s a piece of the business that I think is being left neglected. I’m very careful when I say it, but it’s neglected to the extent that it’s watched in the private sector. I would dare say today that the majority of fire officers really don’t know what their operating costs of a vehicle are. Five years from now, they will. Five years from now, they’re going to be very astute as to what the actual operating costs are and very conscious of fuel costs. Gasoline hit record highs in the history of the country--$2.19 a gallon for middle fuel.

FC: While record keeping is necessary, there are already problems trying to get departments to report their incidents.

Hebe: The technology is there today that could provide a fire service officer with his cost per-unit-per-driver. You could go shift-to-shift and driver-to-driver and determine who is the most efficient driver in that fleet. Who gets the best fuel mileage? Which truck gets the best fuel mileage? They probably can’t even identify how many times they change tires on a specific truck. They don’t know what alternator is better than another because they’re not tracking a very controllable cost, which is a huge part of the budget.

For 30 years I’ve watched the best truck guys in the world, continually squeeze operating costs out of trucks to the extent that with fuel costs getting to where they are, truck fleets today are operating probably 30 to 40% lower cost of operation than they were 20 years ago. I think it’s a discipline that’s going to have to be brought to the fire service to deal with all the other issues without increasing the revenue base.

If not, the first thing that’s going to happen is money is not going to be available to replace apparatus at the cycles that we replace them today. We’re either going to be running at longer miles or longer time and probably both. When that happens and you start running trucks longer, you better know whose truck is going to operate longer and at what operating costs and what components they ought to be putting on that truck. If I’m going to be running more miles, then it better not wear out every six months. I better know whose alternator is going to run 100,000 miles. We better be able to track those operating costs and take a proactive stance, which is how am I going to reduce my costs? If my fuel costs are 20% higher on one shift to another shift or versus one guy running the same vehicle on the same shift, why? Why are my fuel costs higher? What’s my idle time?

FC: Idle? Fire trucks always idle.

Hebe: One of the things we found in the truck business, a long-haul truck runs 40,000 to 50,000 miles in a year, coast to coast. Forty percent of its time is spent idling. A gallon of fuel per hour doesn’t sound like much until you idle a truck several hundred hours a month. Now, when did you ever see anybody shut a fire truck off?

Letting an engine idle is probably the hardest, single thing to do to an engine. It doesn’t maintain temperature, it gets cold and when it gets cold it does funny things to the oil; oil hardens up the cylinders, and all of a sudden it has engine failure because it shouldn’t idle that much. As you look at controlling your costs, you have to have the record keeping and the metrics-capability. I’ll guarantee that fuel is a huge issue and no one ever thinks about it. Tires are a big issue. As we start running trucks longer, this is going to become more of an issue.

FC: Homeland Security is having quite an impact on fire departments.

Hebe: I think that you have to take a step back for the Department of Homeland Security and say, “How much, as a country, are we going to have to deal with and how is that money going to be allocated?” If things continue on the path they are right now, there’s going to be more and more money spent for homeland defense at the gross level -- which is war. We’re going to be constantly funding wars for the next several years, whether it’s Afghanistan, Iraq or Iran, wherever it’s going to be. In our lifetime, we’re never going to be out of this spiral again. We’re never not going to be funding military action of some kind, no matter where it is.

The money that’s going to be spent on post-terrorist activities, from my perspective, is not going to be [spent] on apparatus; it’s going to be spent on how you deal with the aftershock or the weapons of mass destruction. That’s going to be sophisticated technology, be it the firefighter level, the first responder level at terrorist activities, not how are they going to transport them there.

FC: You’re talking about quite an impact on manufacturing.

Hebe: I don’t think that we as manufacturers can look for some sort of a federal seal that says next year the federal government is going to spend blank dollars to buy fire trucks. They may give a billion for fire departments, but it’s not going to be for apparatus, it’s going to be for firefighters to fight some terrorist event. If the next one is a dirty bomb in New York, it’s going to be something that takes priority.

I don’t think we can look at the DHS and say our problem is going to be solved by federal funding; that’s not going to happen. If I read the tea leaves right politically, the money that is going come for fire trucks is going to come the old fashioned way and that’s [from] property taxes collected at the local level, cities are going to have to dole out and decide how big an issue is a fire truck? The DHS budget is not the way to get money for fire trucks.

I don’t want to paint a bleak picture, but the reality is we’ve got big fish to fry in this country. We have to accept the fact that we’re dealing in a world that we’ve never dealt with before and unless we as taxpayers are going to cough up a lot more money -- I don’t think we want to, and frankly I don’t think we can — there’s just not enough disposable income left for all middle class Americans and that’s where the money is. You can’t just ask middle-class Americans to make a 10% increase in their taxes; they just can’t do it.

The reality is our priorities changed on Sept. 11, 2001, and what I see is that nobody in Washington wants to stand up and say, “You know what, priorities changed on Sept. 11. Get real! Get with it! All the stuff we did before, we can’t do it because we’ve got another fight to fight.”

FC: So the bottom line is…

Hebe: The issue we have to deal with is one we dealt with in the truck business years ago; if you’re going to operate your vehicles in extended life cycles, you better know what is it that you’re going to buy up front. You better be darn sure you spec the truck right the first time because five years from now finding out that the component you put in there isn’t a serviceable, durable, reliable component, will be too late. We need to start creating metrics and discipline inside the industry that says we’re going to look at building trucks with tougher life cycles and extended operating cycles….

FC: You know what this technology today?

Hebe: We know what it is. There is component technology out there, but we need to sit down with our customers and level with our customers and be straight and up-front and have enough credibility and integrity that what we tell them is a fact. When a customer says to us something that we know is wrong, not going to work, and going to be a problem, we better have the discipline to say, “Wait a minute. This may not be what you want to do, and here’s why.”

FC: Then they’ll go to some manufacturer that will.

Hebe: Well, then at the end of the day, who pays? We may lose the deal, but in the end, who pays? It’s the guy that bought the truck and the taxpayers have to support it.

A couple other things are going to happen. As money becomes more of an issue, leasing and financing becomes more of an issue, used trucks are going to become much more of an issue, we’re going to have to have a way to transition a much more defined used truck network than we have today in the fire service. Used trucks are going to become more of an issue.

FC: We’ve been involved in promoting Annex D. Fifty-four percent of the fire trucks that are out there today are more than 15 years old and not compliant with NFPA 1901. What’s going to happen to those trucks?

Hebe: A lot of things have happened to fire trucks in the last 10 or 15 years. NFPA 1901 has had a tremendous impact on safety and operations. If you continue to perpetuate old equipment, it makes no sense. Technology has changed dramatically; configurations have changed. Frankly those trucks need to go away — off in the sunset.

To think that you’re going to economically refurbish a 15-year-old truck is crazy. We learned that a long time ago in the truck business. It was the old glider program where we thought we’d just put a new chassis, new drive train, when you got all done, you spent 70% of [the cost of] a new truck and you’ve just got an old truck. There’s no magic way to salvage an old truck. It doesn’t meet current safety standards, it has old technology, why would you spend money today to refurbish an old truck that doesn’t have anti-lock brakes or doesn’t meet current emission standards? They have to go away.

How do we continue to maintain new fleets and how do we deal with affordable, used high-reliability apparatus to communities that otherwise can’t afford new? How do we take a five-year-old truck, and respectfully transition it to a new owner and as part of the transition, you upgrade it, refurb it before it gets to be a major problem. How do you make a five-year-old truck and make it acceptable to a new owner?

FC: Last words?

Hebe: The chief officer in any size department is going to find himself taking a far greater role in the acquisition and operation of his apparatus than he does today. He has to. I go back to my experience with the guys that operate trucks for a living. Their game is won or lost on a hundredth or a thousandth of a cent per mile.

There’s some interesting technologies out there than can offer real, live interactive communication between whoever is operating and whoever is responsible for the truck, technology that will allow the truck to talk to whomever you want it to talk to, independent of if the driver knew it was doing it or not. If a truck is on scene and the pump’s getting hot, but the guy operating it isn’t paying attention, the truck can send a message back to dispatch and say it’s getting hot.

We’re working with a person in Southern California that monitors all the telephone booths in Caracas, Venezuela. The booth tells him how much money is in the boxes, how many times it was used during the day, and it has GPS to tell him where it is, because when a phone is full, they steal the booth!

We can do the same with a truck.