ROUSH CleanTech unveiled the next-generation, propane Vision that promises increased fuel economy, horsepower and torque. “We have pretty strong contracts with all of our suppliers — I


mean, very solid,” said Phil Horlock, president and CEO of Blue Bird. “We make sure we do so that we can have uninterrupted supply. I would say that even though we recognize that things are tighter than they certainly were a good six, nine months ago, certainly a year ago, we’ve got those agreements with our suppliers.” Te large bus manufacturers generally look for long-term


supply partners and tend to hand-pick vendors closer to home. In fact, many suppliers locate their own manufacturing facili- ties or main distribution hubs near an OEM’s plant. Platt said Tomas has identified suppliers that historically have had dif- ficulty in meeting parts orders and has made arrangements to ensure component availability will not affect on-time delivery of buses. But those efforts could be undermined if rising costs continue to shrink the number of supplier options. “A shrinking market will affect everyone in the school bus


supply chain. It could severely slow the development of new designs, components and technologies,” she added. “Without a certain market volume, some component suppliers may not remain in the school bus market. Reduced competition could eventually increase component prices.” “Historical highs” in commodity costs are the last thing manufac-


turers or customers need in this economic environment. Starting Sept. 15, IC Bus will add a surcharge of up to $1,495 per bus to ad- dress current market conditions and increasing global demand. For example, IC Bus said steel and its derivatives account for more than 41 percent of the material value of the company’s buses, and those prices have increased between 60 percent and 116 percent since 2009. Platinum, which makes up almost 11 percent of a bus’s mate- rial value, has gone up 46 percent in that same period. Meanwhile, the cost of rubber, which accounts for 5 percent of the material value of a bus, has increased by 183 percent. Also, the cost of lead is 64 percent higher than it was two years ago. “Our efforts to mitigate price increases through manufacturing


down invariably include utilization of a wide network of partners and increased purchasing power. As a subsidiary of Navistar, IC Bus can rely on economies of scale fostered by the International Truck and Parts groups as well as the company’s own line of die- sel engines, the MaxxForce. Similarly, Tomas Built Buses utilizes large supply chains tied to the global family of parent Daimler Trucks North America. Additionally, Blue Bird Corporation has the Cerberus Capital Management network of approximately 40 different portfolio companies on which to fall back. Tese relationships can allow large bus OEMs to make the nec-


essary arrangements to ensure component availability will not affect on-time delivery of bus orders. “Tomas Built Buses has access to the resources, support and


staying power of its global parent company. With the investments in efficiency made in recent years, leveraging Daimler’s global purchas- ing strength, and the outstanding efforts made by our employees and dealers, Tomas’ customers can expect continued leadership from the company despite economic pressures,” said Platt. Just as important is the strength of contracts with those suppliers, especially for Blue Bird, which last month with partners Ford and


efficiencies have allowed for us to absorb some of the increases, but we could not absorb them all,” said John McKinney, president of IC Bus. “Global commodity increases are affecting all manufac- turing, and unfortunately, they are beyond our control, leaving us no choice but to share those additional costs with the customer.” Tis entails keeping an eye on any anticipated supply short-


ages and seeking additional, alternative sources around the world. Blue Bird’s Horlock has already made two trips this year to China to investigate potential opportunities with vendors there. He added that Blue Bird expects to begin importing steel wheels from a Chinese vendor by later this year. “It’s a long validation process. You have to make sure the quality is


where you want it to be,” he added. “We’ve got a company out there that we’ve found; we validated the supply. Tey have exceptional quality; we’re seeing to that. We’ll move slowly and progressively, but we’re always looking at alternative sources all around the world.” But securing global partners can further lengthen the already frag-


ile supply chain, as parts can take several additional weeks to get to the manufacturing plant. In Blue Bird’s case, the company is enter- ing into a partnership with a third-party logistics center located near


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