New York Times: Senators Investigate Private Equity Role in Soaring Fire-Truck Costs
As fire departments around the country report soaring prices and waiting times for new fire engines, two United States Senators are investigating the effect on public safety and the role that private equity investment has played in disrupting the firefighting equipment industry.
The senators — Elizabeth Warren, Democrat of Massachusetts, and Jim Banks, Republican of Indiana — reported on Tuesday that they had heard from dozens of fire departments about delayed deliveries, defective parts and escalating prices. In a letter to the International Association of Fire Fighters, they said they were concerned that “private equity is padding shareholders’ wallets at the expense of public safety” and that they were seeking to learn more about the situation.
Over the past two decades, the private equity firm American Industrial Partners has acquired a number of specialty vehicle companies, including fire truck manufacturers, and has combined them into a single company called Rev Group. Company executives told analysts that they would substantially raise profit margins and that other companies were doing the same. Rev Group closed two manufacturing plants to streamline its operations.
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By: Mike Baker
Source: New York Times
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