New Flyer to build $28M parts plant in Kentucky

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This article was published 17/11/2017 (2350 days ago), so information in it may no longer be current.

Winnipeg’s New Flyer Industries Inc. is investing US$28 million in a new parts-fabrication facility just outside Louisville, Ky. as part of an on-going effort to bring more parts production in-house.

The 300,000-square-foot operation will make a wide array of parts for New Flyer’s transit buses and Motor Coach Industries’ highway coaches. It is expected to be fully commissioned by the end of 2019 when it will employ about 550 people.

It is the largest new facility developed by the Winnipeg-based bus maker in many years.

The decision to build its largest-ever parts shop has been some time in coming. Over the past six to seven years, New Flyer has been making an increasing number of its components at its own manufacturing facilities and has also acquired some key suppliers.

“We figure we are much better off as a company if we control as much as possible the quality and even more importantly, the cost of the components that go on the bus,” said Wayne Joseph, president of New Flyer America. “It makes us much more competitive.”

He could not say how many different parts will be made at the new Kentucky operation, but over time it will include hoses, injection moulding and thermoforming of plastics, as well as metal fabrication and machining, powder coating, and electrical component manufacture.

Joseph said that unlike auto manufacturers, for instance, who can order exactly the same parts for several thousand vehicles on an assembly line, New Flyer’s buses are custom configured for every transit agency’s order. Sometimes it may only need a very short run of parts.

“We will build on average about 110 different contracts in the course of a year,” Joseph said. “And the only thing that stays consistent on all those buses is that all of them have black tires.”

Joseph said the new Kentucky plant may on occasion make parts that are currently made at other New Flyer productions facilities, but he said it will not impact employment elsewhere. The company has about 1,400 employees in Winnipeg.

Most of the parts that will be made there are currently being supplied by third party manufacturers.

The construction of the largest dedicated parts plant in New Flyer’s portfolio will have a significant impact on its supply chain, but over the past seven years the company has already brought an even larger volume of component manufacturing in house.

This June, it acquired Carlson Engineered Composites Inc., one of New Flyer’s largest suppliers, which had production shops in close proximity to New Flyer bus assembly plants in Winnipeg, St. Cloud, Minn. and Anniston, Ala. In September, it bought Sintex-Wausaukee Composites Inc. with two locations in Wisconsin.

In addition to its ownership of Frank Fair Industries Ltd., also located in Winnipeg, the bus maker now controls the vast majority of its glass-fibre reinforced polymer requirements. For instance, it now has about 700 workers and about 450,000 square feet of floor space dedicated to that kind of work in seven facilities.

Since the parts to be made in Kentucky are not high-value items, it will not have a meaningful impact on New Flyer’s Buy American obligations.

About 90 per cent of New Flyer’s revenue are from U.S. sales. In order for U.S. municipalities to access federal funds to buy buses, 60 per cent of the production must be in the U.S. That goes up to 65 per cent next year and to 70 per cent by the end of 2019.

The company already employs close to 200 people in Kentucky at a couple of parts distribution facilities.

martin.cash@freepress.mb.ca