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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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Have you found that there are many districts that may be interested in alternative fuel buses, but they’re reluctant or unable to take the initial step? And if so, what are their challenges?

There really are a growing number of districts that are interested in alternative fuel buses of all types. Part of it is because of the cost of ownership, part of it is because it’s a domestic sourced fuel, and part of it is the reduction in greenhouse gas emissions. They’ve got all the right reasons for wanting to do it.

There are a couple of major challenges that we hear about. The first is infrastructure: “How am I going to get it?” That’s true whether you’re talking about natural gas or propane. Secondly, they say, “OK, if I can get it, do I have to maintain multiple fuels at my fleet, or am I going to change the whole fleet over? Am I going to make a short-term decision for one type of fuel, then move to a different one?”

It’s also about what you do with price fluctuations in the future, and you particularly see this when people are trying to make a decision between propane and natural gas. Propane adds a lower upfront cost for infrastructure, but it’s got a much higher per-gallon equivalent cost than natural gas. In some cases, people are finding ways to get over the initial infrastructure cost for natural gas because they want the lower, more stable long-term price of the natural gas fuel. In other cases, they’re saying, “I don’t think I can deal with that hurdle. Give me the propane because I’ll get a little bit of benefit on fuel cost now, but I’ve got almost no infrastructure.” It’s a real challenge for them to decide what the right option is.

As of the 2011 sales year, school bus sales had declined for five years in a row. Do you expect that to turn around anytime in the near future?

We started talking about some of the challenges that I’ve seen and the changes in the business, and I honestly think that because of that, we’re not going to see an increase. I think the best we can hope for is that it levels off. But will it level off at the current level or somewhere a little lower than that? I don’t know. I’m certainly hopeful that it doesn’t get any worse than it is. Only time will tell, because we know that transportation departments have made changes in the way they purchase buses and how they operate them.

Is there anything else you want to discuss?

I mentioned before that we’re focusing on smart business practices so that we can deliver a lower total cost of ownership, and I just want to emphasize that we want to do that, but we still want to deliver reliability, durability and quality. We don’t want to take anything out of what we’re building — we just want to do it better. And that comes from our commitment to continuous improvement and really believing that we have a part to play in shaping the future of transportation.

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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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