Good morning. My name is Chris Stoddart. I'm here representing New Flyer. Thank you for having me today.
To tell you a little about New Flyer, we are the leading heavy-duty transit bus manufacturer in Canada and the United States. We've delivered over 31,000 buses. We were founded in Winnipeg in 1930. We're still headquartered out of Winnipeg. We have manufacturing facilities in Winnipeg, and in Crookston and St. Cloud, Minnesota. We've a small fabrication plant in Elkhart, Indiana. We also have a parts distribution business, where, again, our largest facility's in Winnipeg, Manitoba, but we also have parts distribution centres in Brampton, Ontario; Erlanger, Kentucky; and Fresno, California. In the last couple of years we've recently started our own service centre, where we're trying to do commercial work on buses. That's located, actually, close by here in Arnprior, Ontario.
We're heavily focused on being the employer of choice. We've won many awards over the last half a dozen years. We have 2,200 employees and our revenues are, give or take, about $1 billion. We build maybe 2,000 buses, and our revenues are split, about $130 million of that billion is on the parts side.
The theme we're really trying to work towards is about life cycle value and providing the best bus value for life. I think that starts with making sure you offer the right product for the particular customer's needs. We build 35-foot buses and 40-foot buses. We build the 60-foot articulated buses. These are all heavy duty, which means that the bus is qualified for 12 years of life.
We have multiple types of propulsion systems. We have clean diesel. We have diesel electric hybrids, and we have those in a series. We have those in parallel. We offer electric trolleys, and we offer liquid natural gas, compressed natural gas, hydrogen fuel cells, all types of different buses. Last week, we unveiled our battery electric bus, the same as my competitors beside me, so that's very exciting stuff.
There's a picture on the notes here on the top left-hand corner. That is a medium-duty bus and that's market space that we don't play in today, but we've just had a partnership established with Alexander Dennis Limited out of the U.K. These buses are all over Europe. They've built more than 16,000 of these. Essentially, it's a smaller-scale bus, 30 feet, and a little narrower, much lighter bus.
This is an agreement we've just signed with them, and we're going to be producing these in North America. They've been introduced in North America before, but never really took off, so we think it's a great opportunity to have fit-for-use buses for smaller shuttle service or feeder routes for bus rapid transit or rail rapid transit. That's a new product we're getting into in the next year.
On a priority basis we're really focused on reducing, again, life cycle costs, on fuel consumption and emissions. The focus is on lightweight design.
We recently launched our latest platform, the Excelsior bus, and we went through great pains to ensure we reduced the weight as much as possible, because there's almost a direct correlation between weight and fuel economy. We've done a lot of cool stuff with our steel structure and composites to ensure we probably took about 10% of the weight out of our bus.
The other thing is that we see a big opportunity when you're again looking at life cycle costs and fuel economy for our customers. There's really neat stuff you can do on the technology side, but one thing that can swing fuel economy is just driver behaviour. So we've introduced something called New Flyer Connect. It's like on-board telematics. Selfishly, on our side, it collects all kinds of data for what's going on in the bus and tells us how the bus is performing. It helps to provide feedback so that we can design a better bus. We'll provide the same to our customers so that it can help optimize their maintenance frequency and reduce their costs.
The other thing it has is on-board driver monitoring. Most people, as they drive their cars and see the instantaneous fuel economy, will notice their driver behaviour and how gently they drive the vehicle. That probably has the most prominent influence on fuel economy. We want to be in a position to provide that to our customers so that drivers can get real-time feedback on how they're doing. Hopefully, that can make, sometimes, a 10% or 13% difference in fuel economy right there.
Again, one thing that is very important in our industry, which was touched on in the other presentation, is the EPA requirements. They change every three years: 2004, 2007, 2010, 2013. You won't be able to sell a bus in North America unless you meet these. They're very stringent requirements, so we have a lot of focus on getting prepared for 2013.
Again, it's a similar story here. In an effort to reduce fuel consumption, you'll see the electrification of accessories. Those are things such as power steering, air conditioning, and air compressors. You've seen that trend in automotive. Again, we're following suit. It's just a way to optimize fuel economy.
Finally, again, the all-electric bus is a similar story. We're very excited about that. We actually see that in the next decade really being commercially viable. I think we really believe in the payback for that in reduced costs for ridership. That's a pretty exciting program. We just finished building our first bus. It's being tested on the streets of Winnipeg right now. We're hopeful that we will be putting in some production orders, maybe as early as 2013.
I don't have any specific asks today. I just want to talk a bit about some of the stuff we struggle with, I guess, as a company.
When we talk about product configuration management, if you look at automotive, they're at one end of the spectrum. If you want to buy a car, you can go online and pick between five different colours, power windows, and air conditioning, and all that. You can select from a configurator, but you can't ask for anything custom. That's just the way that world works. That's at one end of the spectrum.
Our industry's pretty much at the other end of the spectrum. Our customers dictate to us exactly what they want, and every order has custom engineering. For some orders, maybe it's a couple of hundred hours of engineering. Some orders can be 10,000 hours of engineering.
While we understand that our customers might be spending millions and millions of dollars and want their thumbprint on it, we'll never get to automotive. If we could get to somewhere in the middle, where there could be a little bit tighter constraints on how much customization our customers could demand, I think there would be huge efficiencies and cost reductions from the OEMs overall, and there would probably be better performance. Every time you customize, you stand some risk of having something go wrong, which ends up costing money. It's a huge issue our industry deals with all the time.
One of the other challenges, as we sell both into Canada and the United States, is the Buy America requirement. Essentially, at a high level, they want about 60% content. There's talk of that content increasing. It presents a huge number of challenges, particularly for companies that are headquartered in Canada, as we are. That has a lot of challenges.
On the flip side, there are the “buy Canada” requirements. Although it's not as dominant as it is in the United States, it's certainly beginning to catch on in Canada, and more so in Ontario. It just presents challenges, as you have to source material to meet those requirements.
I talked about New Flyer Connect. We have this data available that we want to use to optimize the design of our buses, to help our customers properly maintain their buses, and to give real-time driver feedback. I guess the issue we'll have to deal with is how well that's accepted. How are drivers going to feel about having that performance criteria and having that published? I think it's a great opportunity, as long as it's embraced and rolled out the right way.
Finally, on the battery-electric bus, I think the bus itself is probably the lesser evil for commercialization. Don't get me wrong; it has plenty of challenges. But we think the secret sauce is more the charging. I think over the next 10 or 15 years, it's going to be about the best charging methodology—kind of like they had with that VHS and Beta. Do you do induction charging? Do you have stuff from overhead? Do you put a lot of batteries on the bus and just plug it in at night? Do you put few batteries on it?
I think the challenges there, maybe even over the next 20 years, are somewhat coming to a global point where there are universal types of standards for charging.
Obviously, on the battery technology, whatever can be embraced for improving battery technology just makes the viability from a cost and performance perspective that much more so on the battery buses. Those are the obstacles that we deal with every day, and we just wanted to present that and open it up for any questions.
Thank you very much.
