» Family-owned Volvo truck company acquires three Louisiana Mack dealerships
By TED CARTER
Richland-based Old River Trucks, one of Mississippi and the nation’s top selling Volvo tractor-trailer dealers and servicers, doubled its size June 1 with acquisition of a trio of Mack truck dealerships in south Louisiana.
Company founder Lee White says he saw acquisition of the Mack dealerships in New Orleans, Lafayette and Lake Charles “as an opportunity that probably will never come again.”
It also preempted a large Texas Mack dealer from moving into Louisiana and setting up shop a state away from Mississippi. The Texans would have grabbed the dealerships right up, said White, who put the value of the acquisitions in the “tens of millions.”
White, who has had the Volvo truck dealership since 2000, had been inquiring about the Louisiana Mack truck sales and service centers for several years. So when owner Parish Truck Sales decided to sell, the company came to White first.
Parish had challenges with everything from effective management to cost control to inventory but still made money, White said. The acquisition represented an opportunity to fix things and grow profits, he added.
“Due diligence told us we knew we could take some costs out,” White said. And, besides, he added, “I felt like this is what I’ve always done. You’ve got to put the capital back at risk.”
White got rid of the top management, elevated some lower-level managers to higher positions and brought in some of his Mississippi managers.
“This needed to be a statement that things were going to change,” he said.
The acquisitions added 90 workers to Old River’s 104-person workforce.
Adding the former Parish Co. Mack dealerships and service centers to its Richland, Laurel and Baton Rouge Volvo truck operations gives Old River both a wider market and wider product mix, White noted. “This diversifies us from Volvo to Mack. We’re going after two markets.”
With two markets, if one slumps the other may rally, he said, and added he is counting on an eventual rebound of the oil and gas market that propels this region of Louisiana’s economy.
“I think we are sitting in the right spot in south Louisiana,” White said.
The product diversity goes beyond the Volvo and Mack brands. Both are Class 8 trucks, meaning they have the heaviest commercial truck weights on the road, but typically fulfill different functions.
The Volvo truck is more likely to be used for long hauls of container freight while the Mack is more location focused and serves industries such as logging and oil and gas tanker transport, Old River says. Mack is owned by Volvo.
More immediately, White sees the acquisitions giving Old River increased buying power that will benefit each location.
White said he received lending support for the acquisitions from Volvo Financial Services and Louisiana-based Origin Bank.
Have wire rope, will travel
White grew up on a farm in southwest Mississippi about 20 miles from Woodville. He lost his father to electrocution at age 14 and later had to leave Ole Miss after a year and a half, having run out of money.
White took a relative up on a suggestion he check into selling wire rope to loggers. In 1981, he converted a barn on the family farm to an office and warehouse. Soon after that, White went mobile in an old Dodge pickup truck he drove to logging camps across the region, selling tree harvesting products out of the back of the truck.
By 1983 he had enough capital to buy a building in tiny Crosby, Miss., though he recalled, “I wasn’t old enough to buy a building.”
He sold fuel all day as well as the wire rope, chains and other logging products. Soon after, he added tires, brakes and other mechanical equipment for logging trucks.
The late 1980s marked a full entry into selling truck parts under the Mack name. “I became a sub-dealer for Mack,” White said. “We were authorized to sell parts and service to Mack trucks.”
He continued to sell logging products. Georgia-Pacific, International Paper and other timber companies were aggressively harvesting. “We were right in the center of it,” White said.
Soon he expanded the Mack parts and service to the Pine Belt with a store in Columbia and Waynesboro.
And by then he had bought out the wire rope supplier in Mobile.
White’s opportunity to actually sell tractor trailers came in 2000 when Volvo agreed to let him take over a failed Volvo truck franchise. At first the Swedish vehicle manufacturer wanted to limit White to parts and service. “I said I want the whole dealership,” he said.
Volvo declined but a month later “came back with hat in hand and said, ‘What would it take for you to take over the whole dealership?’” White said.
He established Old River Trucks in an old building equipped with six work bays and a “mud hole” for a parking lot on the north side of I-20.
A big strike came early on with a contract to sell 180 trucks over a three-year period. By 2004, Old River had achieved enough success to buy five acres directly across the interstate and build a 20,000 square-foot building. Today, that building is the parts and service outlet on Old River’s 18-acre complex.
“We steadily grew and were tops in sales nationally (for Volvo trucks) by 2006,” White said, adding Old River had added leasing and rentals of Volvo trucks to its product offerings.
A second big strike came with a sales contract with Richland refrigerated trucking company KLLM Transportation for 200 trucks annually.
Also added in recent years are major truck buyers Phoenix Transportation of Forest and Jordan Carriers of Natchez, according to White.
Also, today Old River has a fleet of 300 trucks for leasing and rentals after starting out with four of them, White said.
That business took off with the economic downturn of 2007-08, he said. “In 2009, we did not have a record year in sales but we had a record year in profits.”
Old River made its first venture into Louisiana with the purchase of a struggling Baton Rouge Volvo truck dealership. “It has been a difficult market down there,” White said. “We’ve invested a lot of time and money in making sure we keep the customers satisfied.”
The end of last year brought Old River’s latest expansion with the addition of a 30,000-square-foot building on the company grounds.
Trucking sector transformed
The Great Recession in the last decade brought lasting change to commercial trucking, with Class 8 tractor-trailer rigs on North American highways declining from 306,000 in 2006 to fewer than 250,000 today.
“Trucking has never gotten back to where it was 2006,” White said.
One result of the shrunken fleet nationally is that trucks stay busier and need more parts and servicing, according to White.
Some softness on the sales side has set in for Old River in 2016, a circumstance White attributes to declining oil and gas activity. But on the whole, said White, “Our business has been good across the board.”
The company declined to reveal its annual revenues.
White and wife Dee have full ownership of Old River. “We’re not through,” he said, alluding to possible new markets and acquisitions.
Whatever Old River does, White said, starts with satisfied customers “going out the back door and coming through the front door.”