New Flyer bus maker in St. Cloud, Crookston keeps U.S. transit system rolling

ST. CLOUD – Flanked by a bare patch of prairie just outside of town sits a nondescript factory that churns out 23 transit buses a week, providing the foundation for the nation's transportation infrastructure.

Winnipeg-based New Flyer Industries Inc. is North America's largest manufacturer of heavy-duty transit buses — those beastly vehicles that brave cold and heat, some working up to 22 hours a day, to transport thousands of commuters between home and work, and beyond.

"It is very demanding duty," said Wayne Joseph, executive vice president of New Flyer's Bus Business.

With some 750 employees, New Flyer is one of St. Cloud's top private employers. Another 325 people work at the company's Crookston plant.

"Who would have thought they would be right here in the heart of Minnesota?" said St. Cloud Mayor Dave Kleis. "They're a nice little gem."

All told, New Flyer Industries Inc. produces an average of 50 buses a week at manufacturing facilities in St. Cloud, Crookston, Winnipeg, Indiana and Alabama. A tour of the shop floor reveals that many of the buses represent the civic personalities of their future locales.

New York City buses? They're no-nonsense, painted white, with plastic seats.

Las Vegas buses? Positively glitzy, with smoky tinted windows, and a wide gold exterior midsection.

Suburban California — well, they're green, of course, in fuel source (natural gas) and in color.

"Every city has its own specifications, based on what they think is important," Joseph said. "So standardization would be hard."

Details vary widely, such as fabric vs. plastic seating, the way seats are arranged, whether the driver's area is encased with protective glass, and differences in fare boxes, surveillance equipment and GPS systems. Buses headed to Los Angeles, for example, are delivered without seat pads — workers assemble them locally to create jobs in California.

"The only thing that's the same on these buses is that the tires are black," Joseph said, in all seriousness.

Yet there are some standard features. Buses range in size from 30 feet (think: airport shuttle) to 60 feet, and include bus-rapid transit vehicles and trolleys, as well. There are different energy options — ranging from diesel, natural gas, electric and hybrids.

Unlike many corporate executives who talk endlessly about growth opportunities in places like China and India, the low-key Joseph says the bus market is largely a function of replacing existing vehicles. Buses tend to be used for 12 years, depending on wear and tear.

Buses in the United States are funded mostly with transportation dollars derived from the federal gas tax. Municipal and local transit authorities — such as Metro Transit in the Twin Cities — receive up to 80 percent of the funding for a new bus, which, on average, costs about $468,000.

A recent report by the U.S. General Accountability Office suggested that it could be easier and cheaper for the nation's 2,200 transit agencies to make their purchases through the General Services Administration. However, that would require legislative action.

Interestingly, New Flyer doesn't do a huge amount of business with Metro Transit, but does provide buses in St. Cloud and Maple Grove. "We're working hard to get more of their business," Joseph said of Metro Transit.

And, despite evidence that the millennial generation prefers public transit to cars, Joseph doesn't foresee a surge in new bus orders. "I don't see a lot of new cities suddenly starting" new transit authorities, he said.

During the Great Recession, many U.S. transit agencies reduced bus service, increased fares and shed employees. Because bus purchases have such a long lead time, New Flyer experienced the slowdown and subsequent recovery later than many manufacturers. The company has been able to grow because it has added new kinds of products to the mix.

Two years ago, New Flyer embarked on a $5 million expansion in St. Cloud that included $3.2 million in new machinery and equipment and about 130 additional jobs. The expansion, which included a $375,000 training grant from the state, was spurred by a joint venture with Alexander Dennis Ltd. of Scotland that involves production of the Midi, smaller, 30- to 35-foot buses.

And last month, New Flyer reached an agreement to buy Winnipeg-based Motor Coach Industries International Inc. for $455 million — a transaction the Canadian business press called a "blockbuster deal." The acquisition, expected to close by the end of this year, gives New Flyer entry into the motor coach business — vehicles designed for longer trips.

Joseph said it's too early to say how the acquisition will affect St. Cloud operations. "But it won't be negative," he noted.

Janet Moore • 612-673-7752