We recently caught up with Blue Bird President and CEO Phil Horlock in between a fall vacation and the school bus OEM's annual dealer meeting to talk about the company's latest product launches and its corporate, publicly traded direction headed into 2017.
School Transportation News: Blue Bird has introduced a number of new powertrain options in the last year. Can you tell us about the new offerings?
Phil Horlock: One of the many great things about Blue Bird is our singular focus on school buses and how that translates into unique products and features that our customers want and value. By working with our suppliers, we are pleased to offer the broadest range of powertrain options in the industry! Many of these are exclusive to Blue Bird. Products like the new Cummins V5.0 engine and the Ford/ROUSH CleanTech powertrains are examples of the options that only Blue Bird is able to offer to customers. We love being different!
Our gasoline-powered Blue Bird Vision is one of our newest products and we just started shipping them to customers in September. It features a Ford/ROUSH CleanTech powertrain – the same reliable and modern powertrain deployed in our Vision Propane bus – and shares many of the same benefits and features. The Vision Gasoline starts easily in cold climates, operates quietly and requires simple maintenance. It also has the lowest acquisition cost of any of our other Type-C product offerings. Customer interest and feedback have been outstanding!
We recently began production of our all-new CNG-powered Blue Bird Vision, which also runs on the reliable Ford/ROUSH CleanTech powertrain. In addition to the proven benefits of this bus being a Blue Bird product, this Type C bus costs substantially less than the traditional Type D rear engine CNG product; that’s great news for school districts.
So, with our propane, gasoline and CNG-powered Type C buses all using the same Ford/ROUSH Clean Tech engine and transmission, this means simpler maintenance and less complexity for mechanics and technicians. All these offerings are backed by the industry’s best warranty at 5 years, unlimited mileage, and are exclusive to Blue Bird’s customers.
We also launched an all-new diesel engine offering this year. The Cummins V5.0 engine in our Blue Bird Vision provides multiple benefits including easier maintenance, weight and fuel cost savings, and a quieter ride – all at a lower price. That’s three brand new engines launched in 2016 and only available from Blue Bird!
We also introduced the Eaton Procision Transmission to the market in 2016. This transmission has unique car-like features including “creep mode”, “hill helper” and “tap down shifting”. All of these features make this transmission produce less engine noise and deliver great fuel economy, as well as safety and peace-of-mind.
STN: What factors should drive a school district’s decision when choosing between CNG and propane, or even gasoline, as an alternative to diesel?
Horlock: When a school district considers their fuel options, we encourage them to look at the Total Cost of Ownership (or TCO) for the various fuel types over the lifetime of operation. TCO comprises of the upfront cost of the product, as well as the fuel, infrastructure costs and maintenance costs. For instance, propane fueling infrastructure is extremely affordable and convenient, enabling school districts to install a dedicated fueling facility at the same location where the buses are parked. On the other hand, CNG fueling stations typically cost in excess of $1 million to install, so most school districts rely on CNG infrastructure already in place in their municipality, together with grants, to justify a CNG bus purchase. Gasoline is a terrific new alternative for a school district looking to reduce its upfront acquisition costs, while benefiting from lower maintenance costs and simpler service. What’s great is that we make this complex purchase decision easy by offering a TCO calculator through our dealers. We ask our customers to simply contact their dealer, and they will give them a TCO cost for a single unit, or an entire fleet. Incidentally, our customers consistently tell us that Blue Bird’s propane-powered buses have the lowest TCO of any bus, typically saving up to 50 percent of the original acquisition cost through lower fuel and maintenance costs over the lifetime of the bus.
STN: Speaking of diesel, Cummins has already announced its engine line is ready to meet the new federal GHG Phase 2 rules that start next year. What can Blue Bird share in regard to its own technological response?
Horlock: Blue Bird has always strived to be on the leading edge when it comes to being prepared for new emissions regulations. We work closely on emissions technologies with Cummins and all of our engine and fuel system providers to meet the new federal GHG Phase 2 standards by the implementation dates specified by the EPA.
STN: Earlier this year Cerberus Capital Management divested itself of Blue Bird shares by selling to American Securities LLC, which just last month proposed a purchase of all remaining shares to take the company private again. What is the direction of Blue Bird as a publicly traded company as it heads into 2017?
Horlock: It’s certainly been a busy time since we went public in February 2015 and our share price is up about 50 percent since then. As we head into 2017 it’s “business as usual” at Blue Bird – we are remaining a public company, trading on Nasdaq as “BLBD” – and are focused on exceeding our customers’ and shareholders’ expectations by delivering great school buses and strong results.
STN: What are your thoughts on your competitors aligning themselves with larger domestic or international partners? Any comments on Blue Bird’s current partnerships or its own history of entering similar partnerships?
Horlock: Like you, I’ve read with interest about the alliances that our competitors have made and look forward to seeing how they develop. Beyond wishing them every success, I really cannot comment further. I can tell you, we have a team that wakes up every day thinking about one thing – how to design, build, sell and service the best school bus in the industry. No one else in our industry has this sole focus! We value our strong partnerships with our suppliers and we challenge each other to develop and offer products and features that differentiate us from the pack. Notably, our exclusive partnerships with both Ford and ROUSH CleanTech enable Blue Bird to offer the best alternative fuel-powered buses in the industry. The market proves it – we have 10 times more propane buses on the road today than all of our competitors combined, and we have the only gasoline Type-C bus available! As I mentioned earlier, we strive to be different!
STN: Thank you.