> Sensing an opportunity, a private equity group called American Industrial Partners (AIP) began to roll up the industry.
As usual, things are the way they are because of unchecked capitalism and private equity being allowed to do whatever they hell they want.
> As usual, things are the way they are because of unregulated capitalism and private equity being allowed to do whatever they hell they want.
This is exactly what happened - and why. Capitalism is a healthy system where it is a healthy system. Beyond that, capitalism is either: Beneficial thru flexible, effective governance. Or not beneficial. That's every possibility.
Exploitive manipulation of the firetruck market lies outside of the healthy-by-default area of capitalism.
I guess that’s socialism though, so not gonna happen.
Comparable vehicles cost ~500k Euro (~600k USD) in Germany for instance. Update regulations to allow imported vehicles, get popcorn, and laugh as they wail and cry foul play.
And immediately get 100% tarrifs :)
The consolidation of suppliers for all of this is also a contributor to cost and delivery time. That problem is endemic throughout Western economies.
> Fast forward 60 years, and those businesses were contending with aging founders, depleted municipal budgets, and declining fire-truck orders. Sensing an opportunity, a private equity group called American Industrial Partners (AIP) began to roll up the industry.... the REV Group, now one of the three leading manufacturers of fire trucks in the U.S. REV captures about a third of the country’s $3B in annual fire truck sales ...
This is all demand-side inflation: For any number of better and worse reasons (mostly worse), as building codes have gotten stricter and fires have become rarer, municipal spending on fire departments has exploded. Well-funded fire departments buy more expensive trucks than they probably need, just like well-funded police departments buy military-class SWAT equipment they probably don’t need.
Do you have evidence for your claim about well funded fire departments splurging on unneeded equipment? Police departments buy military surplus through federal programs that specifically encourage it [1]. It has nothing to do with how well funded they are, which is why you see that equipment show up even in smaller and poorer areas that don't have particularly well-funded police or the need for a Bradley fighting vehicle.
[1] https://www.marketplace.org/story/2020/06/12/police-departme...
Point is, what's to stop that from happening? In that business or any other, it's bad for many, good for a very few.
In one side-effect, the wait time for a new truck has reached up to 4 years. And the contracts are being written so that the cost can go up during that wait.
> botched COVID response
Businesses will try and trick people into thinking $250 is an acceptable price to charge to visit a swimming pool. They'll do the same shit with firetrucks if nobody is paying attention.
Excellent article, and great to see someone pointing this out. Prices will climb out of control if people are suckers and believe the lie of "you get what you pay for." It's more like businesses will keep ratcheting up prices indefinitely as long as there are suckers around who are easily parted with their money.
Extended rant... my ex once wanted to pay $500 for a f*cking vacuum cleaner. People are stupid. Had we listened to Henry Ford they'd still be making some version of the Model T and you could buy a new car for $6,008.85 (inflation adjusted price of a Model T).
Who wouldn’t? Aren’t people usually proud of minimizing their work to pay ratio, whether it’s earning more and more to sit at a desk and browse HN or selling a firetruck for a new high price.
But when it is government bureaucrats spending public money procuring multi million dollar equipment, the problem is more likely to be government corruption or at best incompetence.
I came to this realization when learning about someone driving a car into a building to do damage and thinking "wow, that's an expensive round", then looking it up and realizing, it's not actually that expensive compared to how much military projectiles really do cost.
I've found it somewhat interesting that we'll be shocked at a fire truck, which gets a life time of 15-25 years and works in the service exclusively of saving lives, costs around $2 million, but not be shocked that we effectively use something as expensive as a fire truck as a single round in a gigantic gun.
Not to say that fire trucks don't potentially cost too much, nor that military weapons aren't worth it. More that I don't think most people are really aware of the obscene costs of military conflicts.
Your numbers are a mess and jump wildly between scales.
US government literally get the IRAQY oil, stop acting like you get to have moral high ground, literally almost 50% people in earth hate US interventionist
US literally controlling the baghdad directly, they just force puppet government to lease the oil field
https://fiscaldata.treasury.gov/americas-finance-guide/feder...
The US doesn't deny local citizens healthcare so that some people far away can be blown up. If anything, it limits its ability to blow people up far away with all the extra money it is spending locally to prevent people from getting healthcare.
But the US has lots of money, so it still finds quite a bit for blowing people up far away.
“ Each Javelin round costs $80,000, and the idea that it's fired by a guy who doesn't make that in a year at a guy who doesn't make that in a lifetime is somehow so outrageous it almost makes the war seem winnable.”
Would those costs still be obscene if you were in a conflict where you’d want to use a significant number of them? Right now they’re expensive because they’re essentially just sitting around.
Why do you think that’s the reason for these high prices rather than, say, lack of competition?
If the U.S. still had it's own (gov't-owned, gov't-operated) production facilities - as, historically, every A List nation has had - to provide honest competition? Hell, no.
History: The not-even-yet-the-U.S.A. set up the https://en.wikipedia.org/wiki/Springfield_Armory in 1777, to manufacture military ammumition. And the https://en.wikipedia.org/wiki/Washington_Naval_Yard in 1799.
In other terms, Protoss-type technology works well when you have a large advantage and need to deal a decisive blow; an example would be B-2s bombing the Iran nuclear facilities. But when you're in a protracted conflict against a capable adversary, Zerg-type technology, cheap, flimsy, and truly massively produced, seems to be indispensable.
When it comes to government work, the biggest cost savings always come from questioning the necessity of requirements.
People point the fingers at defence contractors, but their net margins are typically only around 10%.
Isn't military spending and the corruption of the government military industrial complex one of the oldest gripes in the American public forum? People sure are outraged about it, or were[1] -- has that become passe now?
[1] "The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement." -- Eisenhower 1953
There was no real standing Army until WW2 since it's against the Constitution. That's why the Marines (part of the Navy) were all over the place supporting US business interests, but not draining the public purse too heavily (look up Smedly Butler for a good read)
1. You can only use one missile to hit a target. In pre-gps era we would would dozens or hundreds of rounds to ensure one of them destroys the target.
2. You can fire from a safe distance. Using artillery or dropping bombs from an airplane involves physically getting closer to the target. This introduces much more complexity that adds to the overall cost.
3. There is significantly less collateral damage when using a single missile for a target compared to bombing the general direction of the target.
4. We take significantly less risk of casualties when using these missiles.
The comparison is not between "do it without smart bombs and drones" vs "do it with smart bombs and drones" and the former costing more.
The comparison is between "if we didn't have the smart bombs and drones, we wouldn't have done anything because whatever it was wouldn't have been worth the cost in money and American lives" versus "we spent a million dollars blowing up some stuff because we could do it on the cheap and with no risk."
On a broader scale the US's involvemnt in the foreign affairs of other nations skyrocketed when we went from having volunteer armed forces to a "professional" armed forces. Ike predicted as much in his rant about the military-industrial complex.
The only place in the entire world where fire trucks cost that much is North America, and it’s not because there’s anything inherently special about trucks made there.
The companies that make the parts for those missiles (not just the mega corp whose badge is on it) are likely only in business because they make the parts for it, and employ 20-200 people with decent pay and full benefits in Corn County, Midwest to do it.
On the surface it looks like enormous waste, it still might be, but understand that the defense budget is primarily a jobs program and basically only thing propping up Americans manufacturing.
This is why it never gets cut, but anyone red or blue. It employs way to many people and in way to many places without much good work. Republicans especially hate welfare, but if you can get people to show up and turn screws, they'll happily "waste" money on them.
But yes, that's a big source of the expense. Even on the IT side of things, the government (especially the military) pays sometimes up to 50% more for FedRAMP versions of SaaS products that have their servers based in the US and which are only administered by US citizens.
Length of time from the end of WWII (ending with two ideological opponents, victors who saw the fruits of victory, a ramped up industrial base focused on armaments and a devastated landscape of Europe and Asia to fight on) to WWIII is 79 years, 10 months and counting. No one reading this site has experienced a World War (and if you did, I’d like to shake your hand). Whatever keeps that counter ticking over have been, and are, dollars well-spent.
A bit like keeping your hand raised to keep elephants away from your US house (well, it’s worked so far). But the alternative is just…unacceptable.
What is happening now in the Ukraine is a result of a gross miscalculation without any grounding in reality (no, NATO was not going to attack Russia). The war in the Ukraine is not a leftover from WW2.
But that couldn't happen again.
We taught them a lesson in 1918,
And they've hardly bothered us since then."
You can get Siennas for $1-2k under MSRP. Shop around.
Another good point called out in the article are the floating costs. The manufactures do in fact increase the costs after the fact so not only do you need to order a truck years ahead of time with a budget you don’t have (borrow money) but then you have to cough up an indeterminate amount of money years later. A real sad time for first responders.
In my Australian State, South Australia, this a huge contrast with police who buy new from the manufacturer, get a three or maybe five year service contract from the manufacturer and then sell them when the warranty expires and they've done around 100,000 km (60,000 miles). So no servicing worries and they get some tax benefits so it works for them.
Ambulances have less mileage and my guess is retire after 10 years. Ambulances are very standardised so can swap metro and country vehicles to get value from the asset. There was a "twin life" ambulance (http://www.old-ambulance.com/Twin-Life.htm) that had a long life rear bit on a light truck chassis so swap out the motor bit two or three times every 200,000kms, but these days vans are used. There was much sadness in the ambulance fleet buying community when Ford discontinued the F150 type chassis in Australia.
But your average (fire/rescue) appliance in the city or country has low mileage. In the city plenty of use but never have to drive far. In the country not much use but do drive further but end up the same a very old vehicle without much mileage on the clock. Trailers can be even older 50 or 60 years before retirement. Another issue with a fire appliance is they carry water which is heavy, three tonnes is a pretty common load. And have other readers have mentioned a monopoly on manufacture wouldn't help.
Somebody will go buy a standard commercial truck with a flat bed and put a pump and hose on the back of it.
>“If you’re hanging out the window on the fifth floor, we can’t get you on a ground ladder,” he says. “You’re jumping.”
The cost quickly adds up once you start adding features, and they have a lot to choose from.
https://www.rosenbauer.com/en/au/rosenbauer-world/vehicles/m...
My department is very well funded compared to the rest of our county. Compared to cities, it is laughably underfunded. We are 90 percent volunteer. We have zero paramedics, only EMTs (about 4).
An Engine not only has to run but has to pump. An engine may drive 3 miles but then run for 20 hours without moving but pumping water the entire time (using the transmission to do so). If the pump is not up to standards, FFs do not enter a building. No water, no entry. If the pump isn't compliant then it is not longer an "engine". Mileage is irrelevant. A low mileage engine (10k) might have a million other problems after 100k hours. Who fixes that in a volunteer department?
Ambulances are the same. The drive may be short but the engine never stops idling or charging the equipment on board. In the city the answer is always transport. If you have 1 ambulance and 6 hours round trip, you may stay on scene for a while to avoid a transport (assuming you don't risk the patient's life).
Most volunteer departments have 1-2 engines, and those are aging. If an engine goes out of service without a replacement, we stop responding.
This is not a city/rural problem. If you have ever taken a road trip, gone camping, visited relatives in "the country", then then you are relying on, and praying they have the equipment and staff to respond. Go outside the city for a rafting trip- swiftwater, rope rescue, EMS, traffic... all in the hands of volunteers with no resources.
Back to the article- we have one engine out of service. We can't buy 20x our tax revenue. Yes, everything has gone up in price. When EMS and Fire becomes unpurchaseable, there are (dire) consequences.
Another way to think about it: Are other highly developed nations seeing the same "crisis(es)" that you mention? (Think G-7 and close friends.) Hint: They do not.
The idea that everything is so complex that only a small number of suppliers are capable of building any machine is preposterous.
I bet you with a budget of $50 million, I could design and build a Firetruck from scratch as well as the entire production line and I could produce each subsequent truck for $200k max, made in America. I could probably have the whole thing almost fully automated with robots in 5 years with a bit of additional funding.
And I know nothing about mechanical or electrical engineering. I just know I could do it. I would find the right people. There doesn't need to be that many components to bloat up the cost/complexity to $2 million, that's ridiculous. I'm no Elon Musk. I just think many people with a little bit of brain could do it if given the opportunity.
The problem is lack of opportunity. I will not be given this opportunity because it works against established financial interests. The economy is a zero-sum game, that's a fact. Everybody knows this because nobody would even give me the opportunity to prove it even though $50 million would be chump change for big finance.
Why would anyone fund a venture which involves work and risk, when they can already extract the same nominal profits without any additional risk or work? Nobody is thinking about 'real value'; everyone is chasing nominal gains in a race to the bottom; whipping up the entire economy into a giant souffle full of air.
Caring about nominal gains is like caring only about volume and ignoring the weight... If the economy was a cooking competition, everyone would end up baking souffle, chocolate mousse and meringue. Nobody would be baking pound cake.
lukebechtel•4h ago