Arrow confirms restructuring and has filed for Chapter 11 reorgranization

Wow,I must've had Arrow confused with another company.I could've sworn that they were in the plastic parts supply business as well.:(

Hopefully they'll end up back in black,to once again dominate the roller coaster world.:)

Kinda an off the arrow topic question, but who fabricates Intamin's steel?
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Gemini 100

Intamin's steel? That's anybody's guess. Apparently a lot of Intamin's fabrication is done by companies whose names have a whole lot of hard consonants in them. :)

Right now, the companies that are in the best shape are the companies that do product development and leave the fabrication to others. Because a manufacturing facility is very high overhead, and if it isn't busy, it's financial dead weight. The company ends up taking on unrelated work to keep the fabrication operation busy and it detracts from core product development.

Arrow has been in this position before, more than once. Huss bought them from Rio Grande, then promptly went bankrupt because they couldn't afford the acquisition. Arrow's staff bought the company out, a move that left them successful but under-capitalized which hurt R&D while they were cranking out lots and lots of coasters.
More recently they were bought out by their own European office, then bought back their manufacturing operation; now they're backing off. The company keeps changing its organization and focus with the times.

I think a big problem for these companies has to be the nature of short-term cash flow in a business where a single sale brings in several million dollars, but sales may only happen every couple of years. There's plenty of cash, but most of the time it's tied up in production instead of available to cover expenses...

--Dave Althoff, Jr.

Think of it this way... X has twice the steel (at least) that Goliath does. Since the ride isn't open, I'm going to take a stab and say that Arrow hasn't yet been paid, which means they're not only living with the cost of R&D but also the manufacturing. That's not the kind of cash flow I'd want.

But still, outsourcing is hardly a bad thing. You do what you're good at. Arrow is good at engineering and design. That's their core business. I brought up the magazine analogy because the company I used to work for sold their press for just that reason... they didn't want to be in the printing business.

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Jeff - Webmaster/Admin - CoasterBuzz.com
"As far as I can tell it doesn't matter who you are. If you can believe, there's something worth fighting for..." - Garbage, "Parade"

'Out-sourcing' is the present mantra in most industries.  I think these management models go in cycles.  At various points in history much of the merger and acquisition activity was aimed at achieving 'vertical integration'.  The usual justifications of 'controlling your own destiny', 'controlling your product quality', 'achieving economies of scale', etc. will follow ...

And another point, let's just admit that manufacturing anything isn't nearly as fun or profitable as design.  Manufacturing is hard work, low margin, and low glamour.  Remember that it's the designer's name that goes on the coaster, not the fabricator. 

The margin thing... there's something to talk about. While the fabricator in Ohio that does much of the B&M work does their work and more, how much does Arrow do outside of their own rides? Do they spend time idle? If so, it makes even more sense to ditch the division.

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Jeff - Webmaster/Admin - CoasterBuzz.com
"As far as I can tell it doesn't matter who you are. If you can believe, there's something worth fighting for..." - Garbage, "Parade"

While it is sad that they do have to file for Chapter 11, I think that there are positives and negatives.  Obviously they made a business decision in which the posisitives of ditching the production end of the business outweighed the negatives by a large enough margin to warrant this kind of action.  I would have to guess that once they refocus life at Arrow will regain normalcy.  Once X does open I would have to assume that they will be paid for that.  Since it is not turned over to the park yet I assume Six Flags does not have to pay for X.  Would you pay for something that does not work?  I bet that the chapter 11 will last only long enough for them to finish off X and get paid for it.  Chapter 11 allows a company protection from creditors while they restructure.  Depending on how long and how severe the restructuring takes (usually 6 months to a year), X should be working and they should have the money for it. 

At first I was saddened by the news, then in thinking about it they are taking the only logical step that they can at this point in time.  Also if the production end of the business is slow and no other companies (non-amusement related) were coming to the with orders (or not enough orders), there is no sense in keeping it at this time.  There are plenty of solid production companies that could do what they did and probably cheaper.  Although they may not have the control that they once did.

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It's not a bad thing....it's a good thing.

One question to ask is if there are any penalties that Arrow might be paying for the delayed release of X.  SFMM pretty much promised this coaster a while back, but technical glitches pushed the date back further and further.  Arrow may end up not getting much for the construction of X. 

Kinda like Deva Vu?

Cheers,

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Bob Hansen

"Excuse me while I kick the sky!"
kickthesky@hotmail.com

Like I said, outsourcing probably is a smart move in the coaster building business. I was just passing along my personal experiences from where I am employed.

We used to build our own P.C. boards and cables in-house. Ever since they outsourced this material, we have had nothing but problems. Its starting to smooth out now, but for about 4 years it was a big headache.

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"The Peoples Elbow" or "The Spinaroonie?. Cant decide which is the most electrifying move in sports entertainment!!! LOL

I work for a printing company, the Dispatch Printing Company to be exact, and we of course print the daily paper in house.

We also print the (Columbus) TV guide and Some Coupon books out of house at another division owned by us. In recent years, we have sold one of our magazines and we have closed down a division that realy wasen't putting out as much work, and was too costly to upgrade.

So, this move by Arrow doesn't shock me at all, since I expected it, but I feel horrible for those filks who lost their fabrication jobs....

Also, back on the Ohio steel fabricator who makes the B&M parts, I also have heard that the steel structures for the CCI's are done there as well. Since CCI's headquarters are nearby, it makes perfect sense.
*** This post was edited by john peck on 12/12/2001. ***

I want to visit that steel plant :)
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CP! Still the coaster capital of the world in 2002!
My fellow Americans; Let's Roll!
WoodenCoaster.com

Let's not forget that Walt Disney outsourced some of the ride development and manufacture for Disneyland to Arrow back in the 1950s (Matterhorn, Pirates of the Caribbean, Autotopia). Arrow was originally a small machine shop before Disney paid a visit.

Someone has been reading Coasters, Flumes and UFOs. Interesting book about Arrow's history, a good read if I do say so myself

:-D

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S W :) :) S H
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GO HUSKERS!

Here's a thought.  Every park that purchases a coaster from a manufacturer is outsourcing.  They are not building their own coaster.  The only exception at all in recent years that comes to mind is King's Island with SOB where they partially insourced by being their own prome contractor.  Of course this ended with lots of problems and lawsuits.

SFGAm built Viper inhouse and Knoebels built Twister inhouse as well...of course I get your point :)
jeremy
--just being a butt-nugget again

Your Steel Fabricator in Ohio is about 95% shut down right now.... LTV Steel - bankrupt - They were loosing money when companies just had their steel fabricated overseas, which is much cheaper.
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"Past this point of no return your only choice is freeze or burn." -Merlin