NFI finalizes sale of zero emission buses

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This article was published 04/01/2023 (720 days ago), so information in it may no longer be current.

After enduring relentless set-backs because of parts shortages, NFI (formerly New Flyer Industries) was able to start of the new year with the announced finalization of the sale of 16 zero emission buses to the Winnipeg Transit Authority.

Jennifer McNeill, NFI’s vice-president of sales and marketing for North American Bus and Coach, said the hometown sale of electric buses — a mix of battery-electric and hydrogen fuel cell-electric and 40 and 60-foot varieties — was fantastic.

“We’re absolutely thrilled to have been the successful bidder,” she said.

The city announced its purchase in November, but NFI needed to wait for written confirmation of funding from the tri-level Investing in Canada Infrastructure Program (ICIP) to officially acknowledge the sale.

Winnipeg Transit officials have been doing the work to allow for the transition of electric buses to the fleet for some time.

McNeill said Winnipeg Transit’s decision to start with a mix of zero emission bus configurations will allow it to make a thorough assessment of needs in the future.

“It is a really great opportunity for them to run the vehicles on a variety of routes and duty cycles to see how they will best fit in to their zero emission transition plan,” she said.

While NFI has sold more than 1,500 diesel buses to Winnipeg Transit since 1987, with the most recent delivery in 2021 of 32 buses, this is its first sale of zero emission buses.

Almost 10 years ago, NFI and Winnipeg Transit co-operated on an early pilot project testing NFI’s technology.

The contract with Winnipeg Transit included options for up to four years to purchase up to 150 additional 40-foot zero-emission buses.

In November Janet Lukes, chair of the city’s public works committee said more than $500 million has been targeted for Winnipeg from the federal government’s ICIP that would cover most of the cost for the additional 150 electric buses over the next few years, as well as investment for the required charging infrastructure, a new depot and other elements.

McNeill said NFI has a good track record of converting options into firm orders if funding is in place and if infrastructure is in place to handle the electric buses.

The hometown order provided an upbeat moment in the new year after NFI finished off a brutal 2022 marred by crushing supply chain problems that left semi-completed buses on the yards and sucking up working capital and preventing actual revenue for the buses from being booked.

But before the end of the year, the company received $150 million worth of loan support from the provincial and federal governments and new amendments to its credit facility forestalling a breach of its banking covenants that would have occurred on Jan.1, 2023.

Although the new banking terms required the company to suspend dividend payments — the company had already cut back dividends in the spring — company CEO Paul Soubry told the Free Press at the time that the support from the province and federal government was crucial.

“The future is bright, just in a challenging period right now,” Soubry said. “We’re looking forward to putting it behind us, but will see some continuing challenges in 2023, especially during the first half from supply disruption.”

The key to its ability to get that government support and the flexibility from its bankers likely lies in the fact that the company has about $5 billion worth of orders on its books and some of the strongest public sector funding opportunities for transit authorities in both Canada and the U.S. for decades.

McNeill said the outlook and order book is phenomenal even though the company is experiencing an “awful balance sheet moment.”

“We’re just having trouble delivering them and getting paid for vehicles right now largely because of the issue in obtaining parts,” she said. “We’re so grateful for the support of the province and the federal governments. It is so uplifting and a relief to all of us who see the really positive future. We just need to get over this moment to get there.”

martin.cash@freepress.mb.ca

Martin Cash
Reporter

Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.

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