Blue Bird says it recent small innovations are making its models more appealing to buyers, particularly school districts.

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As fuel prices continue to rise, school districts across the country are more hesitant to tie up their money in new school buses. Fortunately for Blue Bird Corp. , one of the nation’s largest manufacturers of school buses, the company has a number of selling points that, according to Director of Sales Bill Danner, make a compelling argument. In addition to new financing options, improved safety and lower emissions, Danner says Blue Bird also has the best selling point of all – a superior product.

Although school buses haven’t changed much over the years, Danner says Blue Bird’s recent small innovations are making its models more appealing to buyers. The company’s recent acquisition by Cerberus Capital Management has provided the muscle for Blue Bird to make many of these adaptations, Danner says.

Blue Bird Corp. built its first bus in 1927, at the request of a friend of founder Albert L. Luce.  In time, Blue Bird became one of the leading forces in the school bus industry, and soon branched out into motor coaches and commercial buses.

On the occasion of the company’s 80th anniversary, Blue Bird can look back and see a market that has shifted and changed over the years but still includes it as one of its leaders. Danner says Blue Bird manufactures nearly 25 percent of the nation’s school buses.

That’s a smaller number than in years past, but Danner says the company’s focus on quality hasn’t changed. “We still feel [we] produce the most premium product on the market.”

‘Category By Itself’
The main advantage for Blue Bird is the quality of its buses. Danner says the company is “in a category by itself” when it comes to the quality of the materials that go into each Blue Bird bus. He says things as basic as the gauge of steel and the use of rivets in the construction of the bus ensure greater longevity for the bus.

However, it isn’t always easy to guarantee such a level of quality, given the cost of many essential components.

“As far as materials, it’s an ongoing challenge to keep up with the volatility of some of the materials that go into a bus,” Danner says. For example, he says, more than 100 pounds of copper go into the construction of one bus.

One area where Blue Bird isn’t experiencing any shortages is labor, Danner says. While other industries are struggling to find good, skilled workers, Blue Bird has many workers for its plants in Fort Valley and Lafayette, Ga. “Blue Bird is a good employer and workers find the opportunities to be among the best in northern and middle Georgia,” he says.

Tighter Budgets
Many school districts are tightening their belts and trimming their transportation budgets in response to the rising cost of fuel. This means many of them are sticking with old and outmoded buses in the name of saving money that would be spent buying new models.

“The biggest challenge that Blue Bird faces as well as the industry is the tightening of budgets within school systems across the country,” Danner says. “As fuel goes up, budgets are consumed more and more by those needs.

“The challenge is trying to show the school systems ways they can afford new buses and the reasons why they should invest in new buses,” Danner continues. Blue Bird doesn’t have to rely on the hard-sell approach, however, thanks to some help from the company’s new owners.

With the company's recent acquisition by Cerberus, Blue Bird has benefited from the financial resources of one of the nation's largest private equity investment firms. "One of the larger illustrations of that is the creation of Traxis Financial Services, the organization within the bus group at Cerberus that provides flooring and other financial services, including leasing to our dealer body," Danner says.

For many school districts, leasing eases the burden because they don't have to put up the full capital at once.

Driving Safer
Even though school buses are some of the safest vehicles on the road, Danner says, Blue Bird is always working to make them safer. “In recent years, a lot of the focus [in school districts] has been on improving safety, even if it’s in very small amounts,” he says. “Blue Bird excels at that. One of our buses, the type C, is called the Vision and it’s called that because it has windows all around so that the driver can see in a way that’s unique for the industry.”

Clearing the Air
One area in which state specifications are leading to innovation is the environmental impact of school buses. Federal standards that are set to go into place in 2010 will require even tighter restrictions on diesel emissions, so Blue Bird is working on alternative fuel vehicles that will meet the demand. The company has already experienced success with alternative fuel vehicles in California and Texas, and other states are beginning to pick up on the trend.

“We’ve got a [compressed natural gas] bus that has been selling very well throughout the states right now,” Danner says. A propane bus launched this year has also been well-received so far, he adds. “We’re expecting those to be growth areas for us. [Because] we’ve been out there on alternative fuels for some time, we have hundreds and hundreds of units out there, and that gives us a leg up on some folks.”