Alloy Trailers assets expected to be sold
Alloys chairman says manufacturing operation here would remain intactJune 18th, 1998
J. Kingsley Novell, chairman of Spokanes financially troubled Alloy Trailers Inc., says he has agreed to sell the companys assets to Redwood Reliance Sales Co., of Santa Rosa, Calif.
Alloy filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code here on Tuesday.
Anticipating events, Novell said last week that he was confident the sale of the company would be approved by a Bankruptcy Court judge.
Under the terms of the transaction, Redwood Reliance would acquire all of Alloys assets, but none of its liabilities, Novell says. He says, however, that he expects the cash proceeds from the sale to be sufficient to cover all of Alloys outstanding debt.
Im kind of excited about it. I feel it was a very good sale. It should preserve everybodys jobs, he says, adding that Redwood Reliance has told him it doesnt plan to close the Spokane trailer-manufacturing operation here or move it out of town.
For me, its a sense of relief that Ive effected a sale that will protect the company and keep it in Spokane, Novell says. He says hes also pleased that the anticipated new owner is a privately owned concern that he is familiar with, rather than some publicly held company.
Redwood Reliance, which specializes in manufacturing heavy industrial trailers such as those used in the construction industry, is like a sister company to Alloy, Novell says. Weve had a relationship for over 30 years.
Alloy makes trailers that Redwood Reliance distributes, and vice versa, he says. He also notes that Redwood Reliances former owner, Don Ling, is a longtime friend and business associate. Lings son, Brian Ling, who now owns Redwood Reliance together with Duke Yolo, worked here for Alloy for several years, and Novells son, John, in turn worked for a time for Redwood Reliance in California, Novell says. He describes Brian Ling as being sort of like a son to me.
Novell says that Redwood Reliance may opt to move production of some of its trailers to Spokane because of a burdensome regulatory climate and high operating costs in California. If so, the change in Alloys ownership will probably be Californias loss and Washingtons gain, he asserts.
Alloy claims to be one of the two largest remaining full-line manufacturers of over-the-road truck trailers in the Western U.S. As reported earlier, the company recently discontinued about half of its trailer lines and consolidated all of its production into space it leases in the Spokane Business & Industrial Park, due to financial woes caused by a flat national market for trailers and other factors. It also cut its work force to about 175 people, down from nearly 450 three years ago.
Novell stepped down as the companys CEO in April and retired several weeks ago after completing a term as president of the national Truck Trailer Manufacturers Association. He has retained, however, a controlling interest in Alloy, which he owns with his brother, Kerry Novell, and Sales Manager Dick Peirone. Since his retirement, Kerry Novell has taken over as CEO.
Alloy hasnt been profitable for about 18 months, and last fall it brought in John Wiencken, an internationally known re-engineering consultant, to help revamp the company, Kingsley Novell says. That action led to Alloys recent decisions to slash costs and focus on its most profitable product lines.
Before he retired, Novell said he had grown particularly weary of Alloy being treated as a litigation target. The company has been sued more than 150 times, including 12 times in the last 12 months, he says.
Every time theres an accident out on the road and one of our trailers is involved, I get sued, he says.
Alloys administrative and sales offices and service shop are located in a 105,000-square-foot complex at 3025 S. Geiger Blvd. The company has consolidated a specialty-trailer manufacturing operation that also had been located there into its main facility in the big Spokane Valley industrial park, where it leases 168,000 square feet of floor space. That has allowed Alloy to double the size of its service shop at the Geiger facility.
Redwood Reliances web site says that company dates back to 1914 when a young man named Milton Konetsky, who made small trailers, began converting Model T Fords into pickup trucks. Reliance Trailers & Truck Co. was founded in 1918, and Konetsky was active with the company until his death in 1965.
One of the companys early products was a truck designed for pulling and placing railroad cars in rail yards. The company later made buses and van bodies, and claims to have been the largest van-body builder in northern California at one time.
Reliance Trailers assets were bought by Redwood Reliance Trailer Manufacturing in 1969. That company later became a subsidiary of Redwood Reliance Sales Co.