You’ve made changes to your dealer network over the past year. How is that transition coming along?
It has been both a tough and beneficial process for us. The dealers that left us in the Midwest and Arizona at the beginning of 2005 represented about 12 percent of our 2004 sales. As we put new distribution in place, we found significant opportunities in those areas to improve customer service and support. We got much closer to our end-users. We also developed a much greater level of appreciation for our loyal Blue Bird distributors.
The Blue Bird Distributor Advisory Council has been re-energized, and I have visited a good number of dealers throughout the year. While the first part of the year was challenging, Blue Bird is a much better company now than before the distributor network changes we experienced in 2005. Our sales volumes will be more than 10 percent higher in 2005 than they were in 2004, and I am looking forward to 2006.
Last year at the National Association of State Directors of Pupil Transportation Services’ annual meeting, you discussed Project Victory. What is the status of that initiative?
Project Victory has moved smoothly into the prototype testing phase. It has not only been a successful project, but one of those efforts that improves teamwork and brings organizations together. We have driven ourselves hard to stay on schedule and not take any shortcuts. The Victory design is being rigorously tested. We are aiming for a flawless introduction. At the moment, we are completing shaker testing, durability testing, roof crush testing, side intrusion testing and the Colorado racking test. Later this year we will have sales demo units on the road. We not only want those units to be completely wrung out design-wise, we want to have the service and parts manuals sitting on the seats. When we put a Blue Bird logo on it, we have to know it’s right.
Beyond Project Victory, are you planning any changes to the product line?
Blue Bird is making significant design improvements to our small bus line (Type A). We will show many of these changes during the National Association for Pupil Transportation trade show in Austin, Texas. Some of the design improvements we have developed in Project Victory are also being migrated into our Vision and All American products. Working with Cummins, we are also getting a big jump on installing 2007 EPA compliant engine packages.
What prompted Blue Bird to enter into the deal with Cummins to supply its ISB engine? Will that have any impact on customers who might prefer the Caterpillar engine?
Cummins has always been a supplier to Blue Bird. In the past few years, we have only offered Cummins in the rear-engine models. Our agreement with Cummins will broaden Cummins engine availability to all our large school bus models. I believe Cummins is a better fit for many of our school bus customers, but Caterpillar makes more sense for some. I think the right thing to do is give our customers a choice.
How do you see the market in 2006 for school bus manufacturers?
I think it will be another good year. School bus volumes will be up slightly. Customer expectations will continue to increase. Quality, consistency and doing what you said you would do will be even more important for manufacturers.
What do you see as the biggest challenges facing school bus manufacturers?
Product quality, service and parts support must get better. School bus customers have greater expectations every year.
If someone asked you why they should buy a Blue Bird instead of one of the other manufacturers’ products, how would you answer them?
I would first want to know about their application and requirements. Of course, I believe Blue Bird builds a better bus, but that only means something to a customer if I can put it in terms of value to that specific requirement. If I am so busy telling someone why a Blue Bird bus is better, I am probably not listening to what they need in their application. If they have any doubts about the difference between a Blue Bird product and someone else’s bus, I would ask them to contact a Blue Bird distributor and make arrangements to drive a Blue Bird bus and compare. Then I would ask them to visit our facilities. They would get a chance to meet the Blue Bird team, see consistent, well organized production processes, and understand the advantages of working with a supplier that listens and performs.