Just over four years ago, Trish Reed joined IC Bus, making the move from parent company Navistar. At that time, the school bus manufacturer was about to unveil its first propane school bus. Since then, IC Bus has seen sales of that bus grow and continued down the road of alternative fuels with the unveiling of an electric school bus, the ChargE, in 2017. Meanwhile, the manufacturer saw higher demand than expected for the gasoline-powered school bus it introduced in 2016, ramping up production last year. IC Bus also started offering a revamped Type D RE school bus in 2018.
Most recently, IC Bus made electronic stability control (ESC) and collision mitigation technology standard on all of its school buses. IC Bus’s collision mitigation technology is unique in that it includes active as well as passive safety features. The active safety features can help prevent or lessen the impact of a crash by taking an action such as de-throttling the engine and applying the brakes, Reed, the manufacturer’s vice president and general manager, explained in an interview with School Bus Fleet in July.
Reed views the school bus market as staying strong in 2019, with Volkswagen (VW) settlement funds potentially boosting bus sales, and more funding opportunities available in several states for electric buses. She also anticipates higher propane and gasoline bus sales this year.
Reed shares more details on IC Bus’ growth over the last few years, the increasing demand for safety technology, and other insights in this exclusive interview with SBF.
SBF: How would you assess school bus industry market conditions for 2019?
The school bus industry should remain constant in 2019 as the economy remains strong and the demand for housing remains steady. VW funding could possibly increase school bus sales in 2019 over what is expected, due to shifting school bus purchasing cycles for some customers who may choose to buy replacement buses earlier than they normally would. There are also several funding options in states other than California that may spark increased interest in electric school buses.
After working for IC Bus parent company Navistar for 25 years, you joined IC Bus in August 2014. At the time, the manufacturer was getting ready to unveil its first propane school bus. Have you seen propane buses grow more popular? What kinds of changes or new developments have you seen at IC Bus since you came aboard?
Propane is the most viable green, low-emission solution on the market today for school bus customers. Stable fuel prices and fewer infrastructure costs, especially compared to compressed natural gas (CNG) or electric, are some of the reasons customers choose propane as their alternative-fuel solution. Industrywide, propane sales have declined slightly from 2017 to 2018, which is likely due to the impact of gasoline engines entering the market. However, IC Bus has seen a significant increase in propane sales, most likely due to the addition of more fuel tank sizes, and the fact that our propane bus is purpose-built for a school bus application with a low engine-speed design that doesn’t compromise power.
Overall, we’ve had a busy four years. From a manufacturing standpoint, we continue to invest heavily in the Tulsa [Oklahoma] bus plant with over $17 million of capital investments since 2015. This has allowed us to revamp and improve our manufacturing strategy to focus on safety, people, quality, and delivery, with the goal of increasing customer satisfaction. We have also invested heavily in product, not only with propane, but offering gasoline, a revamped Type D RE school bus with the powerful and proven Cummins L9 engine, and offering a variety of technologies that include ESC and collision mitigation technology as standard.
Customers have really embraced the added safety technology, because it supports drivers with alerts, so they can sense situations quickly and completely.
What has the reception been to IC Bus’s decision to make ESC and collision mitigation technology standard on all of its school buses? Has this raised the price of the buses?
The reception to our decision to make ESC and collision mitigation standard on all school bus models has been extremely positive. Two years ago, we started talking about how we can make the safest form of transportation to and from school even better, and at the same time help our customers recruit and retain drivers. We thought about it carefully, but at the end of the day, we knew it was the right thing to do for the industry, for our customers, and for the students that ride our buses.
Customers have really embraced the added safety technology, because it supports drivers with alerts, so they can sense situations quickly and completely, and it also utilizes an active safety system that takes action to help mitigate a potential collision. Our collision mitigation technology is the only active system in the school bus market, and during the customer demonstrations we’ve hosted around the country, customers were amazed at how quickly the system responded, and that the bus stops without the driver hitting the brakes. We have also invested a lot of time with our dealers and early adopters to make sure the onboarding and training process goes well. By leveraging scale within Navistar, our goal was to minimize the overall price and impact to our customers’ budgets.
Is an increased cost for raw materials such as steel impacting prices on school buses in 2019?
There were significant increases [in 2018] on steel, but our team is working on mitigating the impact as much as possible.
In 2017, IC Bus held an event called The Next Stop Innovation Summit to look at market trends and challenges, and help shape the future of the school bus industry. There was a diverse array of speakers from various industries. What did IC Bus take away from that event, and what was some of the feedback?
The Innovation Summit was a great event that we saw as an overwhelming success. Attendees from school districts, contractors, suppliers, and other OEMs enjoyed the conversation and felt energized by the discussion.
The primary intent of the event was to drive conversations, so collectively as industry stakeholders we embrace innovation, versus allowing outside influencers to come and disrupt the school bus market. We purposely brought speakers in from outside the industry to discuss different perspectives, so we can think differently about the future.
We will look at holding this type of event again in the future when the time is right to focus on topics and trends that are shifting the industry, such as green technology, driver technology, and safety.
What kind of feedback has IC Bus received at demonstrations of its electric bus?
During our IC Electric Bus Road Show this past spring, we received great feedback from customers and industry stakeholders who were impressed by the power and driving experience of the ChargE electric bus. Our team did a great job of showcasing the new electric technology and we are committed to bringing the technology to market.
IC Bus believes that the school bus industry is an ideal application for electric power, and Navistar just announced that Gary Horvat will take on the role as vice president of eMobility for the company. Horvat most recently served as the chief technology officer of Proterra, where he was responsible for all engineering and technology development for the electric bus product line. As we continue into eMobility, it remains clear that battery technology continues to improve and change very quickly. Our goal is to ensure that we bring the best, most complete OE [original equipment] product to our customers, while ensuring that our customers receive the best experience possible from our dealer network when this technology is rolled out.
How are sales for the gasoline school bus? Have you seen a resurgence in the popularity of the fuel in school transportation?
At IC Bus, we believe in the power of choice and our goal is to help customers make decisions that best fit the needs of their operation. Our demand for gasoline was higher than expected in our first year of production and is a great alternative for customers who may be experiencing diesel fatigue, since gasoline is an easily adoptable option as customers transition from diesel. In 2018, we saw a total of approximately 3,000 gasoline buses registered, and we expect that number to grow in 2019. (The total number of gasoline buses that entered the market in 2016 is 4,400.)
What changes do you see in the coming years for the school bus industry?
There are several exciting things happening in the school bus industry, the growth of safety technology being one of them. Unfortunately, there have been several accidents that have taken place since late October that have happened on or around the school bus, and requests for technology to aid in pedestrian safety could rise. We are offering solutions such as the IC Bus Full-View Camera Technology that allows drivers to view tough-to-see areas around the bus that engage when students are getting on or off the school bus, when the bus is backing up, etc. We will continue to look into these safety technologies in the future.
There is also a demographic shift from Baby Boomers and Generation X to the Millennial generation taking place in both transportation personnel and parents, which we expect will shift expectations around more frequent use of technology.
Are there any new developments at IC Bus that you would like to share?
At IC Bus, we continue to take a leadership position with safety and technology with our DriverFirst philosophy in mind, which is focused on building buses that drivers love to drive. As part of this initiative, IC Bus continues to explore technologies that address the danger zone around a school bus. We are focused on making things easier for all stakeholders, drivers, transportation directors, students, and parents that interact with our product. We also aim to be one of the industry’s largest school bus ridership advocates by spreading the message that riding the school bus remains the safest form of transportation for students to travel to and from school.