|LACMTA Metro Local #8407 (Photo credit: L.A. Urban Soul)|
Today it was announced that North American Bus Industries better known as NABI has been purchased by New Flyer Industries of Winnipeg Canada for a grand total of $80 million dollars. Although the NABI factor in Alabama will continue to produce buses at this time (currently has 1500 buses on order), it bascially leaves to companies (New Flyer and Gillig) as the major suppliers of transit buses in the United States (plus a few niche players whose orders don't amount to much).
The biggest existing customer for NABI is currently the Los Angeles METRO who purchases most of their buses from the company, having had conflicts with several manufactures in the past although most of those such as Neoplan have already stopped producing buses or the US market.
It was not that long ago that there was a lot more interest in building transit buses for the United States market. For example you had General Motors with their RTS model which began production in 1977, GM eventually sold operations to TMC which is part of MCI which was owned by Greyhound and mainly built intercity buses with one aborted attempt at building their own bus based of the Orion I bus in Canada. TMC eventually sold out and NOVA built the buses for many years before introducing their low floor bus (another company has bought the rights to the RTS model and has built demontrators of both a high floor and low floor version). Nova still makes their low floor bus and has sold buses to such cities as Chicago, Charlotte and New York although I am not sure how aggressive they are being at bus orders here in the US.
|Nova Low Floor Bus in Chicago. I was my first opportunity to ride a Nova low floor bus.|
The aforementioned Neoplan which is a large European builder of both intercity and transit buses entered the US market in the late 70's with a couple of double decker buses for the RTD the predecessor of METRO in Los Angeles. Neoplan also created a joint venture with Gillig to create a transit bus for the US market but it turned out to Shortly after RTD purchased an addition 20 buses in the early 80's Neoplan built a factory here in the US and started building buses specific to the US market. After seeing dropping orders they pulled out of the US market a few years ago.
Ontario Bus Industries (Orion) entered the US market after TMC which had licensced the design of the Orion I to build at their New Mexico plant gave up and went back to building intercity buses (before purchasing GM bus). Like some of the other companies they did not build a lot of buses but they added competition to the marketplace. However, the parent company was eventually purchased by Daimler and after trying to unload the transit bus division for the a couple of years finally decided to just shut it down a few months ago.
|Pair of Orion V CNG fueled buses of Sound Transit pass King Street Station|
There was also Flxible which had been a bus manufacturer for many years and went through a series of owners including Rohr Industries, Grumman, and finally General Automotive Corporation. The company received a major black eye in the early 80's when their 870 model bus was found to have cracks in the frames. The problems were eventually fixed and the bus was replaced by a new model called the METRO which continued in production from 1983 till 1995. The company declared bankruptcy in 1996 and everything was sold off. Many point fingers to GAC for the problems in what was considered the profitable bus division. TriMET in Portland still has a large number of Metro's still in service although they will be gone soon.
|1992 Flxible Metro 30' model near the Portland Soccer Stadium|
North American Bus Industries started off with a joint venture between Crown Coach, considered to build school buses that were "too good" and what was then called Ikarus a Hungarian bus manufacturer. The joint venture produced buses for 6 years from 1980-1986 before shutting down production after many issues including a lawsuit filed by Tri-Met in Portland over the poor reliability of the buses. Ikarus then reentered the US market building their own buses with a new plant in Alabama. Eventually the named was changed to North American Bus Industries which was actually the corporate name which was also designed to show that it no longer had ties with its former parent company in Hungary. NABI mainly was purchased by such organizations as METRO in Los Angeles, Miami-Dade County, PACE in Chicago, and others.
|A pair of NABI buses of Miami-Dade County transit near downtown Miami.|
|New Flyer D40LF leaving downtown Las Vegas Transit Center|
Why do we face this situation today with only two companies dominating transit bus sales in the United States? One of the biggest problems facing the bus manufacturers is that they make very little per bus and have to make everything up on volume which doesn't always work. It is widely speculated that when Daimler saw how little per bus Orion made, they quickly made the decision they wanted nothing to do with the business in the US.
There is also the double edge sword. A new transit bus cost anywhere from $450,000 for a basic 40-foot model and not hybrid to more than a million for what Las Vegas purchased for their branded limited stop bus service. However, the quality of the interiors are still inferior as they often start to rattle the first time they hit the road and over time it gets worst (although I should mention the 2009 New Flyer model D40LFR's that Trimet purchased in 2009 seem to be better than previous editions).
That gets us back to the problem of the companies making so little per bus manufactured. Is the problem to be found at the Federal Funding level? Before the late 1970's the Fed's would fund operations of the transit operators who have to fund their own capital projects. Then came the ill fated Transbus project in the 70's where the Feds tried to create the perfect transit bus that they would then fund the transit operators to purchase.
Eventually the Fed's started paying for the purchased of new buses while the election of Ronald Reagan as President of the United States in 1980 eventually brought an end to operating subsidies to transit agencies except for specialty grants. The funding for bus purchases allowed transit buses to be replaced after 12 years for "state of good repair". Usually the Fed's pay 80% of the cost and the transit agencies pick up the rest.
What is hard to determine is what an appropriate solution would be taking into consideration the unintended consequences of the action. Many decry the requirement of the Buy American provisions. On one hand they say that if the bus did not have to built in the United States companies such as Neoplan may come back to the marketplace. On the other hand will that improve the return on investment that the bus manufacturers make? Also would it sacrifice the jobs we do have in the US (what few in number they are) and bring us no return on that loss?
Another possibility would be to increase the number of years before a bus can be replaced. While this may work in some areas such as in the sunbelt or the Pacific Northwest, it may not be a good option for cities that have a big snow problem that requires the use of salt to clear the roads which of course leads to rust. The question would also remain whether this would help or hurt the manufacturers and in fact make the situation worse. This would mean fewer orders for the bus manufacturers and if keeping the buses longer the transit agencies may demand improvements to the buses which will further reduce the profits made.
It will be interesting to see what New Flyer does with NABI in the long run. Right now they say they will continue to operate the factory as it is, but you have to figure changes will come in time. Does it truly make sense in the long run to keep to separate factories going, making two separate products?
While few worry about the state of the transit bus manufacturers, is it actually a sign about the overall health of the transit industry as a whole? Then again, if funding from the Fed's continues to decline, could we be facing a future where transit agencies have to go back to funding buses from their own budgets which will cause fewer buses to be ordered and for them to be kept for a much longer period of time?
Is there any easy answers?