Fire in Rawdon

After a disaster, picking up the pieces and getting back to business fast

Fire in Rawdon: Modine and FM Global

Representatives from Modine and FM Global comment about the massive fire at the Leeds, U.K. facility of Airedale, a Modine subsidiary, and how the companies worked together to quickly restore operations.

The road between Rawdon and Leeds winds through English hay-colored villages and rolling hills dotted with sheep and old churchyards. At the right moment, it's easy to imagine how this region in northern England would have looked a hundred years ago. Today, though, diesel trucks and industrial vehicles battle it out for precious space on the narrow, stonewall-lined roads in and out of Leeds, the commercial epicenter of the region.

The Airedale factory is located just on the fringe of Rawdon, one of those pub-dotted villages. The site is tucked unnoticeably off the left bank of the roadway as you're leaving downtown. If you didn't know to look for it over the embankment, you'd never see it, hidden as it is, and as speedily as the traffic flows through town.

Of course, if the building happens to be on fire, like it was on the sixth of September, a Friday afternoon, back in 2013, it would be hard to miss.

Clive Parkman, managing director of Airedale International Air Conditioning with eight years at the company, remembers vividly what happened that day. "The conditions were ideal to spread a fire," he says. "The wind kept gusting back and forth in different directions, so the fire kept going in different ways, and just propagated throughout the roof. For the next three hours, everybody just watched with their mouths open as the whole factory burned down."

Tony Cole, the operations director for Airedale, also recalls that fateful Friday. "The fire just swept through the facility," he says. "And the wind seemed to change, at one point the fire jumped from our main building into an adjoining office space, and just took it out completely. We thought it would be under control no problem, and then it became something very serious."

The Airedale facility was the company's stand-alone site—250,000 square feet (23,225 square meters) of production space, 320 jobs, hundreds of years of collective tradition—all stolen from the community in a few windy afternoon hours in September.

Outside, as the fire burned, Parkman turned to his left and right and saw about 150 employees watching the fire. "I thought, 'I've got to say something to them. I've got to tell them what to do.' I'd never been in a situation like it, where I simply was at a loss for words."

It didn't take long for FM Global to assert its place in ensuring that happened. Parag Patel and Chris Pink, adjusters on the job, began the process of assisting Airedale operations in the act of getting going again. Patel picked up the phone to introduce himself.

When Patel first spoke with Parkman, before the fire was even extinguished, it proved to be a valuable touch point. Patel recalls: "I think one of the first things Clive Parkman said to me was, 'Who are you and what can you do to help?'

"I reassured him first off that it seemed like something that would most likely be covered under the policy," says Patel. "I told him, 'There's not much you can do right now. Why don't you get your teams together and book a conference room at a hotel and work out what you're going to do next.'"

None of the principals involved had been through a claim like this one, and that included Modine's Matt McBurney, vice president of the company's HVAC (heating, ventilation, air conditioning) division. "Actually, I was surprised by how smoothly it went right from the beginning. Whenever we needed some advance funding, it was provided to us. We'd taken a macro picture of what the claim might be, and in the beginning some of those claim payments were small relative to the size of the claim. But they came rapidly, and it was really helpful from a Modine/Airedale perspective to receive those funds so that we could put them back into the business and get it up and running quickly."

From an Airedale perspective, the claims discussion featured robust debate, not surprising, considering the topics concerned relocating, rebuilding, salvaging, scrapping, and a lot of people not working and very unsure of their future. "The talks were very intense at the time," says Airedale Finance Director Simon Thorburn. "Obviously, none of us had been through this before so it really taught us to think on our feet and make decisions very quickly for the good of the business."

Not long after the claims work had commenced, the collective focus turned to rebuilding. A segment of Airedale had discovered and fitted out an alternate, temporary manufacturing site to stay atop order fulfillment. The loss couldn't have come at a worse point. At the time of the fire, Airedale business had been booming and revenue was at an all-time high.

Tony Cole remembers the search for a temp facility. "We had a real rush of three or four days trying to find premises. If it had been a different time, if the economy had been better, it would have been far harder for us to find properties in an acceptable location close to our current address."

Because it took only a few days to find suitable premises, that meant Airedale could also secure its workforce. "A lot of our staff live locally and have skills that are suited to Airedale," says Cole. "It would be very hard to go any distance and try to get those people to move, or to find those skills somewhere else. So we were very fortunate to have found appropriate facilities, and that our staff stayed with us." When all was said and done, Airedale lost only two employees, both part-time, in the aftermath of the fire.

Peggy Kelsey is Modine's general counsel and maintains a close relationship with the insurance function. "One of the things that FM Global made clear to us right from the start," she says, "was that our number one priority now was not to worry about the pile of rubble that used to be our Airedale operations. It was to get up and running somewhere else. And, they said, you need to do it now and we will support you wholeheartedly."

Airedale also caught a break with its customer base. Largely because it makes customized, bespoke equipment, but also because it had developed real customer brand loyalty, their customers stayed put. "In those first three or four weeks," says Parkman, "when we were talking to our customers, it was inspiring to see how much they supported us, 'No, we want to stick with Airedale. We do not want the competition's product. Just tell me when we can have it and we will stay with you.' That gave us a lot of confidence as well."

The claims advance money inspired confidence, too. "I think it was within three weeks that we managed to get the first advance payment into the bank account here," says Chris Pink. "I believe it was five million pounds."

That's a big relief for Thorburn, who managed cash expenditures and the company's cash flow. "The payment from FM Global told us this was going to be OK; there was no going back. We knew then that we had a solid claim and the wheels were in motion to process it and get the business back up and running."

In the eye of the storm, Thorburn seemed pleased. What could have been combative, ended amicably and equitably. "I think FM Global has been very fair with us," he says. "They have always tried to see our side of the story, our side of the argument. And they were there with us to get us moving forward."

Peggy Kelsey looks at the situation not from the root cause, but from the result: "When a disaster happens," she says, "your hope is that at the end of it you come out better than you were before. I think that's always the goal. And it is very clear that is what's happening with Airedale. Thanks to an incredible amount of hard work by Airedale management, thanks to the great support we got from FM Global, they have moved into this incredible new facility, and they're going to be better than they were before. It's really remarkable. No one would wish a fire like this upon anybody. But the best thing that can happen is that you rise out of it, and you say, we're going to be better. And I know they will be."

Tony Cole is wistful looking back on the way it all played out. "I've been asked in the past, 'How would Airedale have survived if it weren't for Modine and FM Global supporting us?'" He pauses and stares away from the conversation, off into the distance. "I honestly think we would've gone under. I don't think we had that level of cover before being acquired, but I'm so glad it worked out the way it did or we wouldn't be here talking right now."


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