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September 27, 2012  |   Comments (2)   |   Post a comment

Thomas Built CEO sees permanent shifts in school bus market

Kelley Platt, the company's president and CEO, says that transportation changes many districts are making — from running buses longer to increasing walking distances — have reduced the need for new buses and aren’t likely to be reversed. In turn, the OEM is focused on becoming more cost-effective in its manufacturing while maintaining quality. Platt discusses the market shifts, cost of ownership and product developments with SBF.

by Thomas McMahon - Also by this author

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Platt (second from left) says that the company is committed to manufacturing smartly to provide a more cost-effective bus to customers. She is pictured here with a team in the fabrication department.
<p>Platt (second from left) says that the company is committed to manufacturing smartly to provide a more cost-effective bus to customers. She is pictured here with a team in the fabrication department.</p>

Are there any product developments on the horizon that you can talk about?

As you know, we’ve recently redesigned the EFX, our front-engine product, to provide an array of upgrades that make the Type D bus even more appealing to value-conscious customers. One of the benefits of doing that and getting the family look out there with our HDX, our rear-engine transit product, is that it gives you commonality of parts between the two buses. That commonality means that we can be more cost-effective and provide better content and better quality, because we’re building something that’s consistent across multiple product lines. It makes it easier for service. It makes it easier for our dealers, having one set of parts instead of two sets of parts.

In the future, I think you’re going to see us make some upgrades to the HDX product to even further that commonality and to really bring those product lines in sync with each other.

Twice a year, we hold customer focus groups. The interesting thing that we’ve heard very consistently since I’ve been here, no matter what OEM product people are currently using, is that corrosion is becoming more and more of an issue. It’s something that’s relatively new, and it’s driven by the chemicals that are put on the roads in the northern climates for de-icing — particularly magnesium chloride, which is four to five times more aggressive than regular sodium chloride. So you’re seeing a bus age in one year the equivalent of what it used to age in four or five years.

What we’ve done is put together a cross-functional anti-corrosion team, and they’ve been out visiting customers and trying to figure out, regardless of whose bus it is, where the most problematic areas are and what we can do about it. We’re going to have some options available for customers later in the year to address some of those specific problem spots. One of the things that we’ll have out there is a flexible, high-performance coating that can be used in particular areas that are susceptible to chipping or corrosion. We think that this is going to really provide an extra layer of protection to vehicles to help them fight this.

In terms of new engine products, we’ve already announced that we’re adding a propane Minotour [Type A bus]. The first ones were delivered in August. We’re really excited about being able to expand into the propane market.

How big of a role does total cost of ownership play in school bus purchasing decisions?   

Historically, the total cost of ownership has not played a role in the bid process. The reason it hasn’t is that in most school districts, the money for buying buses comes out of a separate budget than the money for operating the bus. And there’s often a third budget for fuel. So you have three different pockets of money, and in a lot of cases, they haven’t previously been evaluated together. Procurement hasn’t been looking at the total picture.

That’s changing as school districts have to get smarter and smarter about how they use their money. They’re starting to look across lines, and they’re starting to think about how they can make better decisions that will decrease the cost of ownership over the life of the vehicle.

From our perspective, what we have to do is understand what those operational costs are and show our customers how they can look at their buses to be better stewards of their tax dollars. We show them how to find fuel economy, to look at maintenance intervals, parts durability, replacement costs and reparability so they can factor all of that into their purchasing decisions.

Fuel economy in particular plays a major role in that decision, and we feel like we’ve provided a real service to school districts in terms of offering our fuel-efficient SCR [selective catalytic reduction] technology. The buses we’ve built since 2010 get better fuel economy than the ones we built prior to that.

And finally, if we manufacture smartly, then we can provide a more cost-effective bus to our customers. Not only do we not send any waste to the landfill, so we don’t have to pay any garbage dumping fees anymore, but we’re also keeping our manufacturing costs low as we find more efficiencies and we eliminate the waste in our production process.

We’re really trying to look at all different aspects of the total cost of ownership and provide people with the most cost-effective solution that we can.

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Read more about: alternative fuels, cutting costs, propane, Thomas Built Buses, Type A/small buses

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Hi Kelly, I would like to take the time to thank you for a great visit.During the plant tour; one suggestion; please have the breifer talk more about the partnership between the Army, Navy, Air Force and Marine Corps that Thomas has formed. As a 25 year Veteran, this is a great iniative and it should be highlighted. Thanks for everything E W Green, Sr MBA 804 739 6262

E W Green, Sr    |    Mar 07, 2013 06:58 AM

As advanced as vehicles have become, I see no reason to replace buses every 15-20 years. I see buses being sold because of age, with extremely low mileage. Seems like a total waste to me. Even the old Fords and Chevrolets from the 1990s with the old 8.2L Detroit diesels could very well provide service over 400K miles. Tractor-trailers typically run over a million miles before being retired. I see no reason school buses can't be run 500-600K miles, as long as they're maintained and inspected regularly. Just my thoughts on the issue.

Clint Lowe    |    Sep 27, 2012 08:27 PM

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