The recently announced merger of MCI and New Flyer into one business is expected to save $75 million over the next two years and is necessary to ensure MCI’s future, the top official of parent company NFI Group Inc. says.
Paul Soubry, NFI’s president and CEO, said the combined company will be named New Flyer but the MCI brand will remain intact and it will be business as usual for customers.
“We are going to do everything we can to make sure MCI customers don’t feel any difference,” Soubry said. “We are integrating MCI into a broader business that has the financial wherewithal to survive this and support our customers as they recover. We aren’t abandoning our brand or our customers. We are doubling down on making sure we are still going to be around.”
The near shutdown of the industry because of the coronavirus pandemic was the catalyst for combining New Flyer, which manufactures transit buses for the public sector, and MCI, which makes motorcoaches for the private and public markets.
Purchased in 2015
NFI’s transportation subsidiaries also include ARBOC, which makes low-floor, body-on-chassis (cutaway) buses, and Alexander Dennis, the world’s top producer of double-deck buses, mostly for the European market.
NFI purchased MCI in 2015 and announced in 2017 the merger of the New Flyer and MCI parts operations and support activities, such as technical publications and training. The original-equipment product lines of New Flyer and MCI were rebranded as NFI Parts, but the two companies otherwise remained separate.
Soubry said the outlook for the bus and motorcoach industry was positive at the beginning of 2020, but the pandemic forced NFI to shut down its factories in late March and to cut its worldwide workforce of 9,400 to about 1,000.
The company began restarting its factories in June, “and we are back up and running, but at a lower volume,” he said.
Transit bus business
So far, the transit side of the business is faring the best because the company has previous contracts with public-transit agencies to fulfill. The market for cutaways also is seeing some life.
“Transit is running at a pretty good clip,” Soubry said.
That has allowed NFI to bring back a large portion of its workforce, which now totals about 7,500 employees. However, Alexander Dennis announced last week that it was looking at cutting up to 650 jobs because of a decline in demand for buses in the United Kingdom.
The private sector has been hardest hit, with demand for new motorcoaches pretty much nonexistent since the pandemic and resulting stay-at-home orders halted group travel. That has forced operators to delay or cancel orders for new MCI coaches.
“It was like flipping a light switch for motorcoach operators,” Soubry said. “The private sector has been decimated.”
The bottom line, he added, is that, “MCI can’t survive in the current atmosphere. We’ve got to get on a diet, to get leaner. It’s awful. The pandemic has had a massive impact on our industry.”
Combining New Flyer and MCI has resulted in the elimination of 10 executive positions, which Soubry said was necessary but painful.
New Flyer President Chris Stoddart will remain president of the combined company. Ian Smart, who was president of MCI, will lead the effort to merge the companies as NFI’s executive vice president, business transformation.
Smart said the integration of MCI into New Flyer would result in a more efficient and cost-effective business. “Unfortunately, it also means the elimination of certain executive roles, and I want to recognize and thank those affected for all that they contributed to MCI and to our customers for so many years.”
Soubry said all of MCI’s sales and service centers are currently open, but they are under review as part of the transition.
Not going away
Soubry said, despite the current dire straits in the industry, he doesn’t expect bus and motorcoach travel to go away.
“The world can’t operate without buses. They are a critical part of the infrastructure — the spinal cord — of cities,” he said. “When the world starts back up, buses will again be moving people in cities and between cities. If Congress and the government want America moving again, buses have to be a big part of it.”
Bus and motorcoach manufacturers also will survive because they offer a product that the country depends on for transit, commuting, group travel and evacuations during emergencies, Soubry said.
“We’re not going away. It’s not like we are making typewriters.”