City Bus Maker is a Retooled Continental Jewel
An $80 million Canadian buyout makes Anniston’s NABI Bus part of public company New Flyer Industries. The stock is at a five-year high, and a $20 million retooling of the Alabama plant makes it an industry leader in North America.
The New Flyer Industries plant in Anniston is one of the larger manufacturers in Alabama that most people in the state probably have never heard of. It has almost 700 employees, customers throughout the United States and is part of a company that boasts a 50 percent share of the heavy-duty bus market in North America.
The plant opened in 1992 under Hungarian ownership and was known as North American Bus Industries (NABI) when it was sold to a New York private equity firm in 2006. New Flyer Industries, based in Winnipeg, Canada, bought NABI in 2013 for $80 million. New Flyer is a publicly traded company (NFI) on the Toronto Stock Exchange. On July 2, the stock was trading at a price of $15.42, having steadily increased over five years by 170 percent.
New Flyer was three times larger than NABI at the time of the acquisition, so it was natural to wonder if workers in Anniston would be — as the saying goes — thrown under the bus. But instead of layoffs, budget cuts and other hard realities associated with many acquisitions, New Flyer made a $20 million commitment to completely refurbish the Anniston facility and make it part of the company’s future.
Older models were phased out in favor of the New Flyer Xcelsior low-floor bus and older methods with more efficient versions and more attention to quality assurance.
“All of those things, they brought to us and said, ‘Here it is,’” says Mary Litke, plant manager of the Anniston facility, who has worked there 14 years: “Literally, the only thing we had to bring was the people, and the work force was the best thing about NABI. It was a marriage of two great things.”
Employment at the plant is essentially where it was at the time of the acquisition. The refurbishing is nearly complete and should ensure production at the plant for the next 15 to 20 years. The plan is to be making 12 buses a week there by the end of the year, roughly 600 annually.
“If you were to interview management and employees here, they would all tell you that the acquisition has turned out to be exactly what was needed,” says Brian Dewsnup, vice president and general manager at New Flyer in Anniston.
“We (NABI) were a small player, with an old product and really trying hard to compete. We were good, but there is better. Now we’re the No. 1 player with the newest product, and I don’t worry about the order book as much as I used to. Now, our outlook on life is much brighter.”
The Anniston facility consists of 285,000 square feet of production space on 13 acres. New Flyer, which has more than 3,000 employees, has another plant in Winnipeg and two in Minnesota.
Customers are in major cities such as Dallas, Boston, Los Angeles, Miami and Milwaukee, as well as smaller locales like Fort Collins, Colorado. Closer to home, the company has sold a healthy number of buses to Birmingham, Nashville and Atlanta. Currently, more than 32,000 NABI and New Flyer buses are in operation.
Each bus made in Anniston begins as a frame made from square steel tubes. The various components — the chassis, wheels, floors, seats, windows, camera systems and body — are added in clockwork fashion. A 40-foot bus, on average, weighs between 32,000 and 34,000 pounds when completed and sells in a range from $450,000 to $550,000. The standard structural warranty runs for 12 years.
The New Flyer plant is divided into roughly 20 cells, or workstations, each of which assembles a different part of a bus according to a strict schedule. Parts are delivered on a just-in-time basis, organization in the plant is meticulous, and communication is open and ongoing.
Anything that interrupts the production schedule is addressed immediately, and the only person who can sign off on problem situations is the person who reported it to start with.
Says Dewsnup, “One of the disruption factors that we can have is not being able to do the work in the station where it’s supposed to be done. So, if you don’t install the floor, you can’t put in the floor covering, you can’t put in the seats. So one of our big goals is to really increase that percentage of work that’s done where and when it’s supposed to be done.”
On a recent tour of the plant, Litke and Dewsnup pointed out improvements: work platforms that have replaced ladders and scaffolding, allowing workers safer access to the bus, from top to bottom; a wheel well made from one piece of fiberglass instead of multiple parts that are screwed together, which used to leave room for error and debates with inspectors; a fuel tank now made from one piece of lighter thick plastic instead of two pieces of heavier metal, which helps make the final product lighter, and a robotic painting system — installed before the acquisition — that can paint a bus in 17 minutes with about half the amount of paint previously required. The Anniston facility is the only bus manufacturing plant in North America with robotic painting.
The big challenge for New Flyer is to continue making lighter, yet stronger, buses that also carry certain requests and expectations from customers — more fire suppression, better fuel performance, camera systems and other features. “(Customers) want more features, but they want the bus to weigh less,” Dewsnup says. “Those are engineering challenges that we like.”
Dewsnup is optimistic about the future of the Anniston facility and mass transportation in America. “We all know that we can’t just put larger and larger interstate systems in our cities,” he says. “That just won’t work, for a lot of reasons. We need something more efficient, more cost efficient. We are ready to play our role in public transportation needs of the U.S. and Canada. You look at the projected increase in fuel prices over the next 20 years, greenhouse emission issue, and you look at a 12-lane interstate system in Atlanta and what are you going to do? Make it 24 lanes? There’s simply not room to do that sort of stuff, and we will be forced to move to more public transportation to get people to where they need to go.”
Dewsnup says that transit bus systems also provide advantages compared with light rail options. “It’s easier to supply buses than to build light rail systems,” he says. “It’s easier to change routes if you have to, and the cost to get a bus route up and running is about 10 to 15 percent of what a light rail system would cost.”
Ten years ago, NABI was making buses from steel frames that were built in Hungary and imported to the United States. When it changed ownership in 2006, the Anniston facility started making the steel frames, as well as the rest of the bus.
The New Flyer acquisition really did take things from good to better, company officials say.
“New Flyer chose to invest a significant amount of money in the people of Alabama, and I think that speaks to the work force we have here and what (New Flyer) saw in the first year of ownership,” Dewsnup says. “In the past decade, we’ve gone from being half a bus company owned by the Hungarians to a full bus company owned by a private equity company to a full bus company that has all the latest tools and technology owned by the industry leader. There’s really no looking back.”
Charlie Ingram and Cary Norton are freelance contributors to Business Alabama. Both are based in Birmingham.