November/December 2007

Elite In Financial Trouble As Huge Contract Is Terminated

By Ed Ballam

Elite Fire Apparatus has fallen on troubled times with the termination an apparatus contract, worth more than $16 million, and some large liens placed on the business. In November, a court-appointed receiver was named protect the bank holding $5.55 million in loans to the business.

The company, however, vows to dig itself out, restructure and continue building high-quality apparatus for which it is known.

Milwaukee-attorney Michael S. Polsky was appointed by Shawano (Wis.) County Circuit Judge Thomas Grover, to act as a receiver on behalf of Associated Bank, a Green Bay, Wis., lending institution that, according to court records has loaned Elite $5,559,498.70.

Companies in receivership have their assets managed by a representative of the court to protect assets while legal disputes are settled. It does not mean the company is out of business, or has declared bankruptcy.

Elite’s trouble became public when the Montgomery County (Md.) Fire and Rescue Service (MCFRS) terminated a two-year contract it entered to have Elite Fire Apparatus, Tilleda, Wis., for 37 identical pumpers, each priced at approximately $435,000.

In late October, after taking delivery of one unit, MCFRS made a decision to terminate the contract “due to unresolved business issues within Elite Fire Apparatus,” according to a news release issued by the service.

“The decision to terminate the contract was made only after careful consideration of all potential options,” Chief Tom Carr wrote in the release. “Although difficult, this decision was necessary to ensure all of you will have pumpers in a timely manner that meets the performance goals I have established.”

Also in October the Wisconsin Department of Workforce Development filed the wage lien against Elite after investigating complaints from seven Elite employees who said they were owed four months pay, according to Jessica Erickson, the department’s communications director.

66 Eligible For Back Pay

“We estimate there are 66 employees who are eligible for that two months back pay,” she said, and the $1,626,952 lien covers all those employees.

In addition, Erickson said state officials determined Elite violated a Wisconsin state law by not giving employees 60 days notice before closing the plant, as is required for companies with 50 or more people on the payroll.

Whether the plant is open or closed, however, is a point of contention.

Elite Vice President Len Heling said the company is going through some “restructuring,” and he vowed to continue building apparatus.

“We’re having some trouble right now, but we’re going to get through this and we’re going to continue building high quality trucks and move forward with a focus on our customers,” Heling said in an early November telephone interview from the company’s headquarters.

Elite President Dave Moser said the company is reserving comment on the state’s wage lien, the termination of the MCFRS contract and other court cases.

Pending Court Cases

According to court records, a total of eight cases are pending that seek money judgments against Elite and its principals. All were filed in 2007 except one – a lawsuit last year by the Consolidated Construction Company of Appleton, Wis., seeking payment for work on a significant plant expansion.

Among the other court actions is a civil case filed by Wisconsin Kenworth, Green Bay, seeking a judgment in a contract dispute with Elite. Others include an action by a Wausau, Wis., accounting firm and another by a printing company, also in Wausau.

Elite Fire Apparatus was founded in 2003 by Heling and was comprised of several employees and officers of the former 3D Manufacturing company, which was based in Shawano, Wis.

3D was sold to a reconstituted American LaFrance in 1999 and was subsequently closed during a plant consolidation effort. The displaced workers decided to start building trucks again in a nearby facility. Heling was president of Elite until 2006, when he turned the reigns over to Moser.

Quality Apparatus

Between 2003 and 2007, the plant blossomed from a modest 9,800-square-foot facility to more than 70,000 square feet at a cost of over $1.3 million. Some industry insiders have suggested that Elite’s meteoric growth contributed to its financial woes.

Nevertheless, Elite quickly became known for building high-quality apparatus, selling units nationwide.

Elite’s Web site features more than 100 deliveries the company has made, ranging from Class A pumpers to large tankers to small attack apparatus, including nearly 20 to New Jersey.

In September, Hundt Fire & Rescue, an apparatus dealer in Mauricetown, N.J., announced it had stopped representing Elite “to better serve our past, present and future customers.” The announcement said the dealership was representing Crimson Fire, PL Custom/Rescue 1 and SEMO Tankers.

Elite Fire Apparatus pulled off a coup of sorts last year when it landed a contract to build apparatus for Appleton, Wis., the hometown of fire truck powerhouse Pierce Manufacturing.

Even Montgomery County recognized the quality of Elite apparatus. In the memo announcing termination of the contract, Chief Carr said his department formally accepted an Elite prototype pumper, the first of the 37 called for in the contract, and commented that “the delivered unit was found to be a well-constructed, high-quality vehicle that was manufactured to MCFRS specifications.”

Elite VP Heling would not comment on whether his company would try again for the Montgomery County contract, which called for the delivery of six units every four months with the contract to be completed within two years.

“I can tell you this,” Heling said, “we will get out of this, and we will continue to build trucks and focus on our loyal customers.”