American LaFrance blames IBM for bankruptcy
Big Blue silences sirens
Emergency vehicle maker American LaFrance (ALF) has claimed that a bungled implementation of IBM software contributed to the demise of its business.
The firm voluntarily filed for bankruptcy protection in the US district court of Delaware in Wilmington yesterday, in which it said that the installation of a new ERP system had caused significant disruptions to production, and given execs a massive $100m debt headache.
Privately-held ALF said in its Chapter 11 filing with the court that it had encountered significant operational difficulties after it was separated from parent company Freightliner LLC in 2005.
For 18 months after the spin-off, Freightliner provided accounting, purchasing, inventory, production, pay-roll and finance services for ALF while it worked on setting up a new computer system.
However, ALF said that when it switched to its ERP software last June, "serious deficiencies" threw its operations into chaos.
It said: "These problems have resulted in slowed production, a large unfulfilled backlog, and a lack of sufficient funds to continue operating."
But the firm, which manufactures fire trucks, ambulances and other emergency vehicles in the US, only mentions the software vendor once.
It said it was considering taking action "based upon services provided by IBM in connection with the problem-riddled transition to the ERP system".
IBM confirmed to The Register that its systems had been used by ALF but would not be drawn on any specifics.
A Big Blue spokesman said: "We are reviewing the documents filed with the court and have no further comment to make at this time." ®
Freightliner bought up the ALF brand which had been defunct since the early 70's, resurrected it, then went on a rampage to buy out the competition. Closed the newly aquired buyouts, moved all of their production to the Carolina's, then sold it when it started to go downhill because of shoddy quality, a mistreated dealer network, and little to no factory support of the final product.
The investment firm who purchased ALF had little knowledge of this industry, overspent on speculation, and ultimately choked itself to death. They never stood a chance at success.
The Big Blue angle is a diversion.
BTW, the man in charge during the Freightliner downward spiral is the same guy who found investors to purchase another well known fire apparatus builder, Seagrave. He ran this one into the ground as well. No hard feelings, though, he once bought me a drink.
From the company website:"The Company is filing this petition" Chapter 11 of the U.S. bankruptcy code "in part due to circumstances which resulted from inventory not properly disclosed as obsolete when ALF acquired its business in December 2005."
BTW the market for emergency vehicles is down as a whole.
IBM is pretty good...
If you have to go back to the 60ies to find a parallel example.