News story

Lilly sells Nashville operations to KMH

Thursday, 24 January 2008 ( #344 ) - NASHVILLE, TN, United States
KMH System Inc has completed its acquisition of Lilly Co's Nashville forklift operations following a period of wrangled Mid-South relationships and more than four years of litigation. Terms of the purchase were not disclosed. In mid-2003, Yale Materials Handling Corp (YMHC) sued Toyota Material Handling USA Inc (TMHU) and Lilly, claiming that Toyota had interfered in Yale's long-time dealer relationship with Lilly ( News #121). The litigation stemmed from Lilly acquiring the rights to the Toyota forklift franchise in western Tennessee and Mississippi and sought to terminate Lilly's Yale rights in the Nashville and Memphis, Tennessee markets. A Lilly spokesman said: "While this did not affect the Yale market share, Nacco, the parent company of Yale and Hyster, vowed that a Yale dealer could not represent a similar brand even though many Yale dealers represent brands such as Crown, Linde and Taylor." Other suits and counter-suits followed including one for trademark infringement, and observers indicate there were legal winners and losers on both sides. Lilly, owned by Thomas J Clark III, began looking in June for a buyer for its Nashville operations and negotiated over several months prior to completion of the January 2 transaction with Dayton, Ohio-based KMH. Lilly managers perceived the Nashville sale as being in the best interest of its employees. Now, Memphis-based Lilly employs 258 and, in various markets, represents the Toyota, Clark, Linde and Doosan forklift brands. A legal milestone in the case occurred in August. In a 40-page opinion, a United States Court of Appeals in Cincinnati, Ohio affirmed the trial court's granting of a November 2004 preliminary injunction to Lilly and remanded unresolved issues to the trial court. From KMH's point of view, that presented the company with a window of opportunity. The litigants have agreed that the sale by Lilly of the Nashville facilities resolves all issues. Lawyers are proceeding to seek dismissal of the pending law suits with prejudice, meaning they cannot be retried. None of the suits reached the trial stage. Lilly became associated with Yale in 1954 and was believed to be the world's oldest Yale dealership. Lilly had won top awards for elite Yale dealers. YMHC did not renew Lilly's franchise in Memphis and, in October 2006, Black Equipment Co Inc of Evansville, Indiana picked up that Yale territory. Now, Black's Memphis-based southern division represents the Yale brand in 20 counties in Tennessee, 25 counties in Mississippi, 10 in Arkansas and two in Missouri. KMH's full-service Yale forklift operation in middle Tennessee complements existing KMH operations in Indiana, Michigan and Ohio. "By expanding our presence in a growing market like Nashville, we have the opportunity to add new customers and gain the economies of scale necessary to better serve our existing clients," Michael Guenin, KMH president, says in a statement. KMH is retaining all Lilly employees including operational managers and 30 technicians and will use the KMH identity instead of Lilly for the Nashville operations. KMH was founded in 1976, employs 150 persons in eight locations, now manages more than 2,000 units and received Yale dealer of excellence recognition in 1998, 1999 and 2000. While a single-source forklift supplier with the Yale line, KMH also represents Hytrol Conveyors and lines of integrated storage systems, personnel carriers, batteries and chargers, ergonomic and lifting equipment and overhead handling equipment.