School Transportation News 2010 Buyer's Guide : Page 13

www.stnonline.com Great Recession Spells Lean Times for School Bus Manufacturers By Ryan Gray The current economic recession has, at this writing anyway, lasted longer than experts originally forecasted a little more than a year ago. Its effects are evident in many areas throughout society, especially the school busmanufacturing segment. In one shape or another, all 50 states and the District of Columbia operate school buses, so on one hand the indus- try could be seen by some as recession proof. Of course, seasoned pupil trans- porters know full well that, in reality, the school bus industry historically lags about one year behind other economic mar- kets. While signs show that the housing market in some areas is starting to level off, unemployment remains high, affect- ing the property tax base that so many schools rely upon. As a result, 26 states and D.C. slashed K-12 budgets over the past year, and school transportation cof- fers definitely felt the pinch. Though, per- haps, things are not as bad as some might have originally thought. Economic strains that begin to rival those of the Great De- pression some 70 years ago did not quite cause the 20 percent decline in school bus production as some had warned last year. Still, production definitely was down dur- ing the manufacturing year of Nov. 1, 2008 through Oct. 31, 2009, but only to the tune of 4 percent. A total of 36,975 school buses of all types were produced, the lowest fig- ure since School Transportation News began compiling the total number of school buses produced in 1994, a sobering statistic alone. But, take into account that the seven school bus body manufactur- ers estimated that production during the 2009-2010 year will fall to anemic levels of a little more than 28,000 new school buses to be available. It reflects what one com- pany representative referred to the “very conservative” outlook of manufacturers and reflective of “the cautious economy.” Point blank, schools are being forced to get more mileage out of their existing buses. Not even the new 2010 EPA diesel engine regulations for lower NOx and par- ticulate matter emissions could muster a spike in “pre-buy” purchases ahead of ad- ditional costs anywhere from $6,000 to $10,000 for the new technology. The STN survey, conducted in November of the now seven school bus OEMs and small commercial chassis manufacturers Ford and GM, only measured the number of vehicles produced and did not delve into actual sales numbers. Still, times are tough for school bus operators and manufactur- Projected School Bus Orders* 2008-2009 School Year Type A Type B Type C Type D MFSAB 0 4,012 300 18,500 4,333 994 5,000 10,000 15,000 20,000 *Reported by OEM as of 12/02/2009 2009 2009 *Reported byOEMas of 12/02/2009 Type D 4,689 Type A 8,299 Type B 250 Type C 23,737 Total School Bus Bodies by Type* 2008-2009 Production Year ers alike, as the latter saw large layoffs this year, especially among the big three of Blue Bird, IC Bus and Thomas Built Buses. The one segment that saw a big jump, 35 percent from last year, was Type A small school buses at 8,299 total units. One reason is the addition of Starcraft Bus to the marketplace. Blue Bird and Girardin Minibus recently entered a joint venture to produce the new line of Micro Bird by Girardin vehicles in 2010 with former Girardin brands leaving the market. This year’s tally continues to separate the two companies’ independent school bus lines manufactured over the previous year. Meanwhile, the industry’s bread and butter, Type C conventionals, fell by about 2,500 units to 23,737. Type D transit-style buses came in at just 4,689 units down 30 percent. With regard to Type D chas- sis, 2,771 were manufactured for forward control engines and 1,918 chassis were produced for the rear position. Total chas- sis manufacturing plummeted to 36,801 from last year’s figure of 51,000. Type A chassis figures were incomplete due to no figures available fromFord. n 13

SCHOOL BUS OEM PRODUCTION SURVEY

RYAN GRAY

Great Recession Spells Lean Times for School Bus Manufacturers

The current economic recession has, at this writing anyway, lasted longer than experts originally forecasted a little more than a year ago. Its effects are evident in many areas throughout society, especially the school bus manufacturing segment.

In one shape or another, all 50 states and the District of Columbia operate school buses, so on one hand the industry could be seen by some as recession proof. Of course, seasoned pupil transporters know full well that, in reality, the school bus industry historically lags about one year behind other economic markets. While signs show that the housing market in some areas is starting to level off, unemployment remains high, affecting the property tax base that so many schools rely upon. As a result, 26 states and D.C. slashed K-12 budgets over the past year, and school transportation coffers definitely felt the pinch. Though, perhaps, things are not as bad as some might have originally thought. Economic strains that begin to rival those of the Great Depression some 70 years ago did not quite cause the 20 percent decline in school bus production as some had warned last year. Still, production definitely was down during the manufacturing year of Nov. 1, 2008 through Oct. 31, 2009, but only to the tune of 4 percent. A total of 36,975 school buses of all types were produced, the lowest figure since School Transportation News began compiling the total number of school buses produced in 1994, a sobering statistic alone. But, take into account that the seven school bus body manufacturers estimated that production during the 2009-2010 year will fall to anemic levels of a little more than 28,000 new school buses to be available. It reflects what one company representative referred to the “very conservative” outlook of manufacturers and reflective of “the cautious economy.”

Point blank, schools are being forced to get more mileage out of their existing buses. Not even the new 2010 EPA diesel engine regulations for lower Nox and particulate matter emissions could muster a spike in “pre-buy” purchases ahead of additional costs anywhere from $6,000 to $10,000 for the new technology. The STN survey, conducted in November of the now seven school bus OEMs and small commercial chassis manufacturers Ford and GM, only measured the number of vehicles produced and did not delve into actual sales numbers. Still, times are tough for school bus operators and manufacturers alike, as the latter saw large layoffs this year, especially among the big three of Blue Bird, IC Bus and Thomas Built Buses.

The one segment that saw a big jump, 35 percent from last year, was Type A small school buses at 8,299 total units. One reason is the addition of Starcraft Bus to the marketplace. Blue Bird and Girardin Minibus recently entered a joint venture to produce the new line of Micro Bird by Girardin vehicles in 2010 with former Girardin brands leaving the market. This year’s tally continues to separate the two companies’ independent school bus lines manufactured over the previous year.

Meanwhile, the industry’s bread and butter, Type C conventionals, fell by about 2,500 units to 23,737. Type D transit-style buses came in at just 4,689 units down 30 percent. With regard to Type D chassis, 2,771 were manufactured for forward control engines and 1,918 chassis were produced for the rear position. Total chassis manufacturing plummeted to 36,801 from last year’s figure of 51,000. Type A chassis figures were incomplete due to no figures available from Ford.

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