In a sprawling, 350,000 square-foot, manufacturing unit on the japanese fringe of Winnipeg, lots of of staff are main the general public transit revolution. Manufacturing within the lengthy, slender New Flyer Industries plant is shifting like clockwork, as workers remodel piles of metal body elements into huge, vibrant transit bus shells for cities all throughout Canada and america. It begins within the weld store, the place it takes about 20,000 welds to rework slabs of metal into huge bus frames. A protracted observe runs the size of the manufacturing unit flooring, permitting one body at a time to be carted by way of a collection of workstations, the place workers apply corrosion safety, match fibreglass panels, caulk joints, set up electrical elements, paint, and connect ending touches like home windows and lights. On the finish of the road, completed bus shells are lifted — with out doorways, wheels, batteries or engines — onto flatbed trailers, and trucked out to a facility in Minnesota for the ultimate meeting.
Most of the buses will later be fitted with battery-powered propulsion techniques, serving to fill a rising share of orders for brand new, zero-emission transit know-how. With practically 100 years of historical past within the bus-making trade — electrical buses at the moment are what New Flyer does finest.
However over the pandemic, New Flyer has struggled, dropping tens of millions of {dollars} and shedding lots of of jobs. The corporate has additionally quickly shut down operations at instances attributable to provide chain disruptions — together with a short lived manufacturing unit shut down this month — and is delivering far fewer buses than it did in years previous. As well as, American laws has hampered the corporate’s means to arrange full-scale manufacturing amenities at house in Canada, and just like the buses themselves, lots of the firm’s inexperienced jobs have been despatched south of the border.
With Canada making main investments to hurry up electrical transit adoption from coast to coast, the chance for a made-in-Canada inexperienced transit trade seems to be shiny. However the firm is not sure Canada’s workforce will be capable of sustain.
This uncertainty highlights how the Trudeau authorities has did not introduce a plan to guard clear tech jobs for bus manufacturing in Canada, even because it seeks to deal with carbon air pollution from the transportation trade — which is liable for virtually 1 / 4 of the nation’s annual greenhouse gasoline emissions.
Business consultants warn the federal authorities might want to focus efforts on creating sturdy coverage incentives to construct and retain a strong electrical transit workforce — or danger shuttling its transit investments exterior its borders.
Main the electrical bus revolution, from Manitoba
Lengthy earlier than New Flyer started making a reputation for itself because the go-to store for electrical buses, a Winnipeg man named Jon Coval based Western Auto and Truck Physique Works Ltd. With a workforce of 5 workers, Coval constructed truck and bus shells within the early Nineteen Thirties, promoting their first full bus builds to Gray Goose Bus Strains in 1937. By the Forties, Western Auto had designed the Western Flyer — a coach-style bus set to take over inter-city transportation in Western Canada. The Western Flyer rapidly grew to become the corporate’s star providing, prompting the corporate to alter its identify to Western Flyer Coach. The corporate hit bumpy monetary roads by way of the Fifties and 60s, prompting the provincial authorities to step in and take over operations below the identify Flyer Industries Ltd. in 1971. Throughout these early a long time, the corporate tried its hand at transit buses and trolleys, slowly constructing a buyer base throughout Canada and america.
“It’s a Manitoba success story,” Stephen King, New Flyer’s vice chairman of technique and investor relations, tells the Narwhal and the Free Press in an interview. “Winnipeg is on the centre of the nation and actually intently positioned to america. Strong manufacturing historical past, rail-line entry and all these forms of issues made it a sexy place to start out the enterprise.”
In 1986, the corporate’s imaginative and prescient modified. Jan Den Oudsten, a descendant of coachbuilders from the Netherlands, purchased the corporate and ushered in an period of technological innovation. Underneath the identify New Flyer, Den Oudsten’s imaginative and prescient noticed the corporate develop a number of ‘firsts’ in North American public transit. There was the primary low-floor bus, already successful in Europe, that eradicated the necessity for stairs on the bus entrance, then the primary low-floor articulated bus, which may seat additional passengers because of a versatile extender in the midst of the bus. Within the Nineties, New Flyer took bus know-how to new heights because it labored to develop the world’s first hydrogen gas cell powered buses, and in 1998 the corporate delivered the primary ever diesel-electric hybrid bus, making an indelible mark on the way forward for public transit.
“I believe we noticed the writing on the wall, that the longer term was going to be electrical,” says King.
New Flyer Industries went public on the Toronto Inventory Alternate as NFI Group in 2005, and within the years since has collected a number of accolades as a North American chief in zero-emission bus know-how. They provided the primary fleet of hydrogen gas cell electrical buses to B.C. transit for the 2010 Vancouver Olympics; they unveiled the primary all-electric bus prototype in 2012, with orders secured for Chicago’s transit fleet the identical yr; and introduced each a zero-emission Xcelsior mannequin and plans to develop the primary North American-built 60-foot gas cell bus in 2014. Alongside the best way they’ve acquired a number of opponents and elements producers, established worldwide places of work, and developed a wing particularly aimed toward serving to cities plan the infrastructure wanted to implement electric-transit applied sciences.
“I don’t know if I’d name us the ‘Tesla’ of buses,” King laughs, reflecting on the corporate’s historical past within the trade. “However our view is that we’re the chief of electrification within the transit area.”
Right now, New Flyer Industries provides what King estimates is the widest vary of transit buses in North America. The corporate is “propulsion-agnostic,” he explains, promoting every thing from old-school diesel buses, to hybrids, to battery and hydrogen gas cell-powered buses.
The “secret sauce,” King says, is that the corporate is ready to customise every bus to its prospects wants — from engine to color colors — bringing a number of applied sciences collectively in a single machine.
“We name ourselves ‘mobility options suppliers,’ ” King says. On high of bus manufacturing, the corporate makes a number of of its personal elements, and provides upkeep, coaching and repair for its buses.
“When you want something bus-related, exterior of working the autos, we do every thing else.”
The now-international NFI Group employs greater than 7,500 individuals at dozens of amenities throughout the globe. About 2,500 workers members are employed on the firm’s “flagship” facility — the worldwide headquarters in Winnipeg. King says about half of these workers work in bus manufacturing and manufacturing, whereas the opposite half assist steer the company.
Regardless of touting itself as a pacesetter in Canada’s zero-emission bus market, New Flyer solely will get a fraction of its enterprise from Canadian transit businesses. About 90 p.c of the corporate’s enterprise is pushed by prospects in america.
A Canadian zero-emission legacy, an American market
Since 2020, the corporate has been reporting vital declines in income, deliveries and income, owing largely to provide chain disruptions, the corporate says, and this quarter was no exception. Income reportedly dropped 32 per cent in comparison with 2021, bus deliveries had been down 43 per cent, and the corporate reported internet losses of US$57 million — however the government workforce stated it stays optimistic.
Paul Soubry, president and CEO of NFI Group, advised analysts on a quarterly outcomes name in early August “there have been some optimistic indicators that the worst is now over,” citing “document demand” and a backlog of bus orders that will assist fill the corporate’s coffers within the coming quarters. Most of that demand, Soubry highlighted, is for zero-emission buses, which make up a rising share of present orders and backlog, in addition to greater than 50 per cent of the corporate’s potential bids for the subsequent 5 years. Within the second quarter, zero-emission buses made up 11 per cent of the greater than 500 items the corporate delivered. Articulated buses — longer fashions linked by a central accordion piece — are counted as two items.
A few of New Flyer’s opponents additionally seem like saying a flurry of latest offers.
In June, NOVA bus, a Quebec producer owned by Volvo, introduced separate offers to provide electrical and clear diesel buses to transit businesses in Halifax and Huntsville, Alabama. Quebec-based Lion Electrical, which has cornered the marketplace for electrical faculty buses in Canada, reported a 72 per cent uptick in bus deliveries in comparison with 2021 and a subsequent 76 per cent bump in income in its second quarter outcomes.
In Canada and america, Soubry stated the “main driver” of bus orders is authorities funding. Although funding applications for transit buses fluctuate broadly from market to market, america leads with “well-established federal funding applications for transit fleet replacements,” based on NFI Group’s annual filings. Within the U.S., federal funds usually cowl about 80 per cent of the bus prices, whereas the remaining 20 per cent come from native funding.
Since 2016, New Flyer has benefited from a devoted funding program for low or zero-emission transit in america. The Low-No grant program, because it’s referred to as, provides aggressive grants to transit businesses to help a transition to scrub tech. In June 2020, New Flyer was named a “associate of alternative” by 12 main U.S. transit businesses, giving them choice for tasks awarded below the grant program. 9 transit businesses named New Flyer as a associate of alternative once more in 2021, and that yr, the corporate acquired over US$40 million in Low-No grants. In 2022, the U.S. authorities made greater than US$1.6 billion out there to transit businesses by way of the Low-No program, and New Flyer expects to proceed benefitting from the fund as tasks are introduced within the coming weeks.
NFI Group is fast to level out that zero-emission buses — which price twice as a lot as diesel buses — herald higher revenue margins for the corporate.
In consequence, the corporate’s enterprise has been centered south of the border. Of its 25 North American amenities, only a handful are sprinkled all through Manitoba and Ontario. Exterior of the Winnipeg HQ, most manufacturing takes place at amenities in Minnesota and Alabama. Even the corporate’s ‘Car Innovation Centre,’ the place prospects can get a really feel for the corporate’s choices, is positioned at New Flyer’s Alabama plant.
In Canada, in contrast, NFI Group notes there has traditionally not been a devoted supply of funding for transit buses. As a substitute, funding usually got here from “a patchwork of provincial funding, municipal funding, fare field income, varied federal applications, and different smaller sources,” which means funding ranges may fluctuate broadly from province to province, and even metropolis to metropolis. Till not too long ago, zero-emission bus adoption in Canada has moved at a trickle, with cities hesitant to put money into big-ticket purchases with out federal funds.
However there’s excellent news. In February 2021, the Canadian authorities introduced a $14.9 billion-investment in public transit, with $2.75 billion put aside for zero-emission transit and faculty bus planning and procurement. That zero-emission transit fund, paired with a direct mortgage financing program by way of the Canadian Infrastructure Financial institution, has each New Flyer and trade consultants feeling eager for Canada’s future.
“The Canadian market really has fairly an encouraging outlook over the subsequent short while when it comes to the fleet rejuvenation in Canada with a severe dedication by the federal authorities on serving to the provinces within the cities to make that occur,” Soubry stated in the course of the quarterly outcomes assembly.
King says the “actually massive steps” the Canadian authorities has taken during the last couple years are anticipated to drive “massive orders and large demand” within the Canadian market — and that demand is already underway. In April, New Flyer inked a contract with the Toronto Transit Fee to supply greater than 200 hybrid-electric buses within the subsequent 4 years, with the choice to supply one other 360 buses within the years to return.
It’s NFI Group’s “first main win in that market in over a decade,” Brian Dewsnup, president of subsidiary NFI Components stated in the course of the quarterly outcomes name. And the corporate hopes that’s just the start.
Consortium: ‘Kill automobiles’ and ‘put steroids’ into transit
The federal authorities has set an formidable goal of 5,000 zero-emission buses operating on Canadian streets by 2026 as a part of a plan to deal with greenhouse gasoline emissions within the transportation sector. Because the transportation sector produced 24 per cent of the nation’s annual emissions in 2020, the federal authorities has famous zero-emission autos might help the nation meet its worldwide commitments below the 2015 Paris Local weather Settlement, and attain net-zero emissions by 2050. However as of now, there are simply 208 electrical buses on the highway, most of which hit the streets within the final 16 months, and are concentrated in bigger city centres like Toronto, Edmonton, Montreal and Vancouver, says Josipa Petrunic, president of the Canadian City Transit Analysis and Innovation Consortium (CUTRIC).
“My solely job is de facto to do away with automobiles by making transit sooner, sexier, cooler, greener, cheaper,” Petrunic says in an interview.
Since 2015, the consortium has been working as a know-how innovation non-profit, providing demonstrations, market analysis, and different undertaking help for the transit trade throughout Canada. Over the past seven years, the consortium has spent vital time lobbying the federal authorities to financially help the analysis and improvement wanted to convey electrical buses on-line.
“There is no such thing as a doubt that if we wish to get to our local weather motion targets for Paris, we’re going to should kill automobiles and actually ramp up and put steroids into the transit trade,” Petrunic says.
Thus far, a handful of mid-to-large cities have pledged to convey electrical autos into their fleet by 2026, however these guarantees solely signify about 2,000 buses in whole, Petrunic says. Since procuring an electrical bus can take about three years from order to supply, Petrunic estimates it is going to take till 2030 to fulfill the nationwide goal of 5,000 on the present tempo.
There are two main hurdles between cities and electrical transit fleets: infrastructure and price. Whereas a regular diesel bus could be purchased for about $600,000, a battery-electric bus prices round $1.1 million, and hydrogen gas cell bus can run upwards of $1.4 million — and that’s not counting the price of charging infrastructure.
Transit businesses want one charger for each 12 buses and people chargers can simply price $1 million every, Petrunic explains. For a fleet like Toronto’s, which boasts greater than 2,000 buses, which means lots of of chargers, and lots of of tens of millions of {dollars} on high of the worth of the bus. These chargers additionally must be housed in new garages that may accommodate the buses’ new tech, including considerably to the price of adoption.
Picture: Jimmy Jeong / The Narwhal
Picture: Tony Dejak / Related Press
However Canada’s new funding package deal has eased among the monetary burden, prompting cities to beef up their fleet-replacement guarantees. Marco D’Angelo, president of the Canadian City Transit Affiliation, says cities like Ottawa, Toronto, Vancouver, Edmonton, and even Winnipeg have began to guide the cost towards fully-electric fleets.
Winnipeg has promised to have about 15 per cent of its fleet electrical by 2027; Edmonton already operates 40 electrical buses, with 20 extra anticipated this yr; Toronto, which already has dozens of electrical buses on the highway, plans to be totally electrical by 2040; Ottawa has promised a zero-emission fleet by 2036; Vancouver, which already operates a strong trolley bus system, plans to be totally electrical as quickly as it might, D’Angelo explains.
The boon in demand for electrical autos is sweet information for Canadian firms invested in zero-emission bus manufacturing. New Flyer and its opponents, together with Volvo-owned Nova Bus, and faculty bus maker Lion Electrical, each headquartered in Quebec, have began to see a possibility to ramp up manufacturing within the native market.
However there’s a hitch, one that would see Canadian taxpayers supporting inexperienced jobs south of the border as an alternative of nearer to house: the Purchase America guidelines.
Manitoba manufacturing unit misplaced lots of of jobs, says Unifor
As soon as upon a time, buses constructed on the Winnipeg facility may drive proper out of the plant — in actual fact NFI Group nonetheless makes a handful of coach-style buses solely in Winnipeg — however the rising strain of American content material laws have put a cease to the corporate’s all-Canadian transit manufacturing.
Since 1982, america has required publicly funded transportation infrastructure like highways, bridges and public transit should be made in America, with American supplies. Over time, particulars of this ‘Purchase America’ laws have modified, however the finish outcome has handcuffed Canada’s transit manufacturing trade. Proper now, Purchase America guidelines for transit mandate that any undertaking receiving greater than $150,000 in federal funding should include a minimum of 70 per cent American-made elements (calculated by price), and full last meeting in america.
These guidelines have had a serious impression on New Flyer’s operations, says Clint Seys, president of Unifor native 3003, the union representing New Flyer’s Winnipeg workers.
Seys, who’s been on the plant for practically 30 years, says his union as soon as represented greater than 1,600 Winnipeg workers, however the 2008 monetary disaster set off a sequence response that noticed U.S. content material guidelines get extra stringent and the Winnipeg workforce whittle away.
“They only hold rising the quantity of the coach that must be finished within the U.S. for American jobs,” Seys explains. “It’s actually simply chipping away on the quantity of labor that’s being finished right here in Canada.”
In late 2018, for instance, New Flyer introduced it will be transferring about 90 jobs from its Winnipeg plant to a facility in Shepherdsville, Kentucky with a purpose to keep consistent with U.S. content material necessities — which jumped to the 70 per cent mark in 2019. These job transfers, Seys says, minimize a complete division manufacturing electrical elements. {The electrical} element workstation was changed with a socially distant cafeteria in the course of the COVID-19 pandemic.
Seys now represents simply 600 members within the Winnipeg plant, in addition to a couple of hundred at an NFI Group-owned fiberglass producer within the metropolis. The Winnipeg plant has stopped finishing full builds and now sends all its buses — even those slated for Canadian transit businesses — to america for completion. The content material guidelines have had “grievous results” on New Flyer’s jobs, he says.
“It’s a disgrace as a result of if Canadian taxpayer {dollars} are being spent to purchase buses and infrastructure right here, they need to have a optimistic impression on employment right here,” says Seys. “We now have good-paying jobs, hard-working individuals, we have now the abilities, we have now the flexibility and we have now the area to do it.”
Seys doesn’t blame the corporate for the losses — their fingers are tied, he says — it’s the federal authorities that has dropped the ball for Canadian staff.
“It hurts me to a core as a result of New Flyer has at all times touted the Winnipeg plant because the flagship when it comes to high quality, when it comes to security, when it comes to productiveness,” he says. “They need they may convey extra [jobs] again right here. It’s the American legal guidelines which can be inflicting this downside.”
Seys has been working with Unifor members throughout the trade to succeed in out to “anybody that may pay attention” and foyer for “a agency dedication to convey jobs again to Canada.” The federal government, he says, has a accountability to both enact content material guidelines of its personal, or strain the U.S. to stage the taking part in discipline.
“I wish to see the transit trade taken care of,” Seys says. “I wish to see guidelines round holding job retention right here and holding offshore merchandise out of right here; I might additionally prefer to see them put strain on the U.S. to perhaps stage this off and share within the sandbox, so to talk.”
Thus far, solely the Ontario and Quebec provincial governments have tried their hand at native content material guidelines. Any transit bus procured with public funds for an Ontario or Quebec metropolis — together with the lots of of hybrid buses New Flyer has been contracted to construct for the TTC — should include a minimum of 25 per cent Canadian content material.
“I don’t suppose at our authorities ranges federally or provincially, that we’ve pushed the Can-Con problem,” says Petrunic. “However in transit, we have now loads of jobs to lose if we don’t.”
In current months, Canada has locked horns with america over content material guidelines for electrical passenger autos — and gained. An early draft of America’s Inflation Discount Act would have mandated any electrical autos eligible for U.S. shopper tax credit be made with predominantly U.S. content material, however Canadian Finance Minister Chrystia Freeland and commerce minister Mary Ng fought again, arguing such guidelines would violate the Canada-U.S. Mexico Settlement (CUSMA), and in the end decimate the auto manufacturing trade in Canada. After greater than 1,000 interactions with American officers, the invoice was amended to widen the eligibility to North American-made autos.
“Industrial coverage in Canada has simply missed taking a look at transit manufacturing as an attractive massive job employer, however it’s, and it must be revered as such.”
Josipa Petrunic, Canadian City Transit Analysis and Innovation Consortium
Whereas Canada has celebrated the advocacy for auto-sector jobs, the transit trade has felt sorely left behind.
“It’s an enormous downside proper now,” Petrunic says. “No one is advocating for the transit manufacturing sector to be included.”
The auto trade in Canada boasts between 400,000 and 500,000 manufacturing jobs, primarily in Ontario. However in 2020, Petrunic and the workforce on the consortium assessed the variety of jobs produced by the transit manufacturing and electrification sector — from manufacturing to energy era — and located about 300,000 jobs within the trade, together with 100,000 manufacturing jobs.
“Industrial coverage in Canada has simply missed taking a look at transit manufacturing as an attractive massive job employer, however it’s, and it must be revered as such,” Petrunic says. “Us not respecting it implies that it’s stagnated and hasn’t grown to make use of individuals on the stage it may — these are good paying jobs, and so they’re extremely expert jobs.”
Methods to shield Canada’s inexperienced jobs
Sitting exterior at The Forks Market in Winnipeg earlier this week following a funding announcement to develop girls entrepreneurship in Canada, commerce minister Ng makes one level clear: “I don’t like American protectionism.”
However countering with Canadian protectionism — within the type of stringent Canadian content material laws — isn’t so simple as it appears. Canada is sure by commerce agreements with a number of main markets, and imposing extra aggressive content material guidelines may put Canada in violation of these agreements. In different phrases, the identical argument that gained safety for Canadian gamers within the auto trade is also used to argue in opposition to Canadian content material guidelines.
Within the newest federal funds, Ng and Freeland as an alternative put ahead the concept of consulting with Canadian industries a few reciprocal procurement program.
“Reciprocal procurement means that we are going to purchase from you as a lot as you purchase from us,” Ng says.
What precisely such a reciprocity settlement may seem like remains to be to be decided. Ng says the federal government is within the means of chatting with enterprise leaders about how such a program may work, however confused such a deal may put Canada — which is the most important buyer to industries in over 30 U.S. states — “in an excellent place.”
Again at New Flyer, King says Canadian content material guidelines like Ontario’s wouldn’t get in the best way of the corporate’s workflow. In truth, he says, extra Canadian content material guidelines may assist stimulate work on this facet of the border.
“To drive extra Canadian exercise, there’s at all times content material guidelines, which is able to simply naturally drive a few of these choices as a result of producers and transit businesses should be certain that procurements meet these guidelines,” King says.
Through the quarterly outcomes name, CEO Paul Soubry even teased the opportunity of all-Canadian builds within the coming years.
“With out letting too many cats out of the bag,” Soubry stated. “(The corporate) is taking a look at situations of all-Canadian builds going ahead — and people sorts of issues to permit us to fulfill what we expect to be a fairly encouraging Canadian market.”
However earlier than New Flyer can tackle the workload of all-Canadian bus manufacturing, King says the nation must bolster its workforce. Most transit businesses have been engaged on diesel and pure gasoline buses for many years, he explains, so shifting these jobs to the clear vitality sector, with all new infrastructure and elements, could be sophisticated. The answer, he says, is a devoted federal funding in workforce improvement.
“Something round that concentrate on workforce improvement — investing in individuals, investing in coaching — is de facto going to go a great distance,” King says.
However creating extra job availability on this facet of the border goes past college coaching applications. Petrunic suggests incentive applications, reminiscent of grants or scholarships tied to staying in Canada to work, may assist with expertise retention, as may devoted promoting and advertising for the sector’s clear vitality jobs. King provides that grants for firms seeking to supply on-the-job reskilling applications may additionally help job safety in a altering financial system.
Talking for the Unifor members, Seys provides the office is a superb place for commerce staff to be taught new, transferable expertise, however that type of coaching requires an inflow of money.
“They’re at all times making an attempt to get extra individuals into the trades, nicely put your cash the place your mouth is,” he says. “We have to have funding and training and locations to go.”
Thus far, the federal authorities has made no guarantees round workforce improvement. Ng says she acknowledges there’s “extra work to do” in leveling the taking part in discipline between Canada and america, however stopped in need of hinting at any particular federal efforts aimed toward strengthening the transit sector.
Requested in regards to the job losses at New Flyer because of American content material guidelines, Ng solely provided common feedback, saying the federal government “will hold working with Canadian industries … specifically these which can be constructing a inexperienced financial system” with a purpose to “help their progress.”
Ng pointed to the federal authorities’s current investments in transit infrastructure — together with the zero-emission transit fund — as proof of a brand new federal dedication to assembly local weather targets and creating habitable cities, whereas noting the federal government plans to work with provinces and the non-public sector to “be sure that the abilities of the longer term … encourages and allows extra staff in what’s going to be the inexperienced financial system.”
However on the ground in Winnipeg’s bus plant, New Flyer is taking issues one step at a time. The corporate remains to be struggling to work its manner by way of the provision chain disruptions which have marked the final two years, however there’s gentle on the finish of the tunnel.
