Management & Operations

CompoBus: Reviving a Radical Idea

Posted on September 23, 2008 by Cliff Henke

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 [IMAGE]MET9compo-flatbed.jpg[/IMAGE]As reported in the previous two articles in this series, which appeared more than two years ago [May/June 2005], the apparent post-mortem of the CompoBus had this ambitious bus development project dying because it was just too expensive to produce, while its revised price could not be justified in the marketplace. This past spring, however, the Los Angeles County Metropolitan Transportation Authority (L.A. Metro) firmly disagreed when it announced it may purchase up to 1,000 45-foot CompoBuses over the next five years.

“The cost issues have not gone away, and we are addressing them,” says Bill Coryell, vice president of western region sales for NABI. “We have received a great deal of interest from other transit agencies.”

Back from the graveyard
The CompoBus had become a name synonymous with new hope for achieving passenger appeal and more cost-effective operations, a vindication of an expensive federal research program. However, it was also considered the latest symbol of what ails the transit vehicle manufacturing industry, raising serious questions about whether procurement policies and manufacturing practices are stifling the very innovation that agencies and the Federal Transit Administration (FTA) say the industry needs.

After the $60 million FTA-funded Advanced Technology Transit Bus Project (ATTB) was concluded, NABI was the only manufacturer to step forward with an advanced composite structure, which was considered key to the major ATTB project objective of significantly lowering bus weight, which had climbed in some cases well past 30,000 pounds with lifts or ramps for wheelchair passengers, alternative fuel systems, such as compressed natural gas, and the growing variety of advanced electronic components being specified by transit agencies.

Company officials initially believed that despite the federal program’s assertions of even more, composite technology could take as many as 7,000 pounds out of the curb weight of a transit bus. NABI licensed the same technology used for the ATTB, called Seaman Composite Resin Infused Molding Process (SCRIMP), a patented technology developed by TPI Composites of Warren, R.I., which has since been acquired by Martin Marietta Composites. NABI will continue to use the SCRIMP technology in its restart of the CompoBus.

Only one platform will be available, with two models featuring different lengths. The Model 45C-LFW is the one just ordered by Los Angeles, which accommodates 20 percent more passengers than a traditional 40-footer. The extra capacity is also well-suited for bus rapid transit, which typically involves higher-capacity vehicles with rail-like styling to overcome the stigma of traditional bus service.

Meanwhile, in early 2002, the company applied to the FTA for a waiver of Buy America regulations for content and final assembly for 10 years in order to develop the technology. The company argued that such a waiver would achieve public interest goals, namely increased ridership and other goals of the ATTB program, as well as supporting foreign trade policy goals in Eastern Europe. The FTA approved the waiver in March of that year, but for only two years, subject to renewal and review. In July 2001, even before the FTA waivers were under consideration, NABI broke ground on a new $10 million manufacturing facility in Kaposvar, Hungary, southwest of
Budapest; purpose-built for composite bus fabrication and final assembly.

These developments, combined with similar waivers granted to foreign suppliers entering other segments of the U.S. transit market, set off a firestorm of protest in the industry. Rep. Carolyn Cheeks Kirkpatrick (D-Mich.) took up the coalition’s cause and introduced legislation to subject waivers to more formal notice-and-comment rulemaking required of revised or new regulations.

Meanwhile, unforeseen manufacturing problems compounded by the slide of the U.S. dollar in Europe began to adversely impact costs of CompoBus production. While other NABI buses only begin production in Hungary, with more than 60 percent of the component value sourced in the U.S. for compliance with Buy America regulations, the original manufacturing of the CompoBus had virtually everything installed in Kaposvar, including all components from American suppliers except seats and the powertrain. Moreover, the inherent time fabrication of advanced composites added nearly 50 percent to the production time of these buses.

To reflect true costs, NABI management was forced to raise CompoBus prices by as much as 30 percent over what it originally quoted. The decision severely undermined the economic rationale for the 40-foot “shoebox” CompoBus design, because its business case was purely based on weight-related fuel and other operational savings. For the 45-footer, the only documented productivity gain was its 20 percent additional capacity, which could not justify a 30 percent premium purely based on costs per passenger. NABI began to reconsider alternative strategies, including discontinuance of the product line.

Meanwhile, in December 2005, the FTA denied NABI’s extension of its waivers, which expired in March 2004. Based on its inability to commercialize the technology at a price that the industry was willing to pay and in a manner compliant with federal law, NABI announced that it would cease production in Kaposvar after it completed existing contracts.


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