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MailTribune.com
  • Medford trolley firm revives

    Hit hard by the U.S. recession, Classic Trolley rolls on with a key order from Dubai
  • Classic Trolley's latest order might be the most important one in the north Medford company's history.
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  • Classic Trolley's latest order might be the most important one in the north Medford company's history.
    The 27-year-old trolley maker's primary market is tour companies, many of whom suffered after the 9/11 attacks and then saw business decline again during the recession.
    Yet the stylized 1894 design of the Classic Trolley continues to find favor with private operators.
    More than 150 trolley units are on the roll from Tokyo to Zurich — 70 of them alone in Honolulu. After lengthy discussions the company has signed a deal this spring that could lead to the sale of as many as 10 trolleys to Emaar Properties of Dubai.
    "They want 10," says owner John Hagler. "But they want to see the first three before ordering seven more."
    Each unit sells for $294,000, while its double-decker models, first produced in 1999, are priced at $319,000.
    "They don't have enough public transit to get people moved from the transit station to the marina, Burj tower and the shopping center," Hagler said.
    It took seven months to finalize the deal initiated by Emaar Properties Chairman H. E. Mohamed Ali Alabbar, whose interest was piqued when he rode a Classic Trolley in Santa Barbara, Calif..
    "It wasn't money-related," Hagler said. "They just want what they want. They're great people to deal with, they are just dotting all the i's and crossing the t's."
    Getting the agreement done took patience, but the challenges were just beginning.
    "We can do the normal trolleys we've built for years in six weeks to two months," Hagler said. "Working with a (custom) design like this is a little crazy, but we'll have the first one done in four months."
    That might not have been such a big deal a few years ago, but in the past decade the trolley industry has dwindled from 13 manufacturers to five.
    "This is a tourism-based industry and there was no tourism for a while," Hagler said.
    When the year started, Classic Trolley was operating on impulse power. Even its secondary line — coffee stands for the likes of Dutch Bros, Human Bean and Black Rock — has taken a hit as growth in that industry has slowed in relation to tighter credit requirements.
    At its high-point, Classic Trolley had as many as 45 employees, cranking out 19 units in 1999, including eight for San Francisco and five double-deckers for Hawaii.
    Last year, the output dwindled to two 60-seat double-deckers for San Francisco, one for an Oregon City client and one for a start-up tour firm in Albuquerque, N.M.
    Most of the remaining employees were laid off last summer, Hagler said. "I had to lay off everyone, including my wife and me."
    Calling back 10 employees was one thing, but financing the relaunch was another.
    There was little cash to cover the $120,000 needed for chassis, materials and labor costs. Emaar has been burned by up-front payments in the past, Hagler said, and wanted 30 days' worth of work done before its first payment.
    Southern Oregon Regional Economic Development Inc. stepped in with a loan to cover start-up costs.
    The initial Dubai unit is due for completion Sept. 23, followed by a drive to Oakland, Calif., followed by a 28-day float to Dubai — which is across the Persian Gulf from Iran.
    "I will go over there and go through customs with it," Hagler said. "We're doing a lot of extra things for them, making sure it gets through customs."
    When trolleys are operated overseas normal warranties don't apply. So Hagler is setting up his own warranty shop in Dubai.
    "Right now I'm doing Internet interviews and finding companies that do large vehicle mechanical work," Hagler said. "When I go over there I will hand-pick the one that fits the niche best and make sure they can get parts."
    Reach reporter Greg Stiles at 541-776-4463 or e-mail business@mailtribune.com.
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