Winnipeg bus maker New Flyer Industries now has a firm contract in its hands for a mammoth order of 550 buses from the Los Angeles County Metropolitan Transportation Authority (LA Metro) and an option for another 350.
The five-year contract for up to 900 Xcelsior 40-foot heavy-duty compressed natural gas (CNG) buses could be worth as much as $500 million in revenue for the largest bus maker in North America over the next few years.
The LA Metro order is anticipated to begin production in the fourth quarter of 2013 and will be completely made and assembled at New Flyer of America's St. Cloud, Minn., manufacturing facility.
The news was part of a significant few weeks for the company.
Last month, it landed a $116-million investment for 20 per cent of the company from Brazilian bus maker Marcopolo S.A.
Between 1998 and 2001, New Flyer manufactured 466 CNG buses for LA Metro. It will be the first time New Flyer has built for Metro in more than 10 years and the first time the New Flyer Xcelsior model will be included in LA Metro's active transit fleet of more than 2,200 buses.
"We are thrilled to be awarded the Metro contract," said Paul Soubry, president and CEO of New Flyer. "With our last Metro build more than 10 years ago, we're excited to have this opportunity to once again build, deliver our best-in-class Xcelsior and provide service and support for the life of Metro's buses."
On Jan. 8, 2013, LA Metro issued New Flyer a notice of intent to award this contract but advised that its safety committee and board of directors approvals had to be achieved before a contact could be issued.
At the end of the third quarter of 2012, New Flyer's backlog totalled 6,206 equivalent units (EQs) with a total value of $2.64 billion. An equivalent unit gives an approximate measure of the size of a bus, and a longer-than-typical 40-foot bus represents two units.
Since then, the company has announced new orders and options totalling about 1,500 EQs.
That includes a contract to build up to 90 heavy-duty diesel buses for the Milwaukee County transit system, also announced Thursday.
That order calls for New Flyer to provide 55 of the Xcelsior buses this year.
There's an option for Milwaukee to purchase another 35.
New Flyer has provided almost 700 buses to the county in the last 16 years.