[IMAGE]soubry.jpg[/IMAGE]Although Paul Soubry Jr. only took the reins as president/CEO of New Flyer Industries in late January, he's already off to a running start by implementing his "participatory" management style that includes communicating across the company, which he "enjoys" and says is critical for business success. He is also looking to draw from his experience as the CEO of aerospace company, StandardAero.

Janna Starcic: What strengths or past experiences do you draw from to be successful?

Paul Soubry Jr.: The things I think I can bring to New Flyer and our subsidiary companies are all in the area of facility optimization and control systems. Our company has grown quite dramatically over the last couple of years in terms of the sheer output, so there's a need to make our facilities and our cross control systems robust. We're investing in efficiency optimization.

What would you say your management style is?

I define it as very participative. To give you an example, what was [originally] referred to as 'corporate or executives,' I've re-branded as the executive leadership team - the ELT. There is far more involvement and accountability as a group as opposed to accountability to just one function and one department.

I do a lot of communicating, which I enjoy, and think is critical for business success. For example, we do a communication plan, and we've promoted a new company intranet for access to information. I'm also doing a weekly blog for employees.

Tell me about the company's operational excellence initiative?

I think when New Flyer started and what I continue to promote and be involved in are a number of initiatives that make it much more of a robust company. The primary focus up to this point has been on supply chain; everything from how we buy, how we manage and how we bring the material to New Flyer. The second area is customer program management; how we finalize work specs, how we conduct the work in the facilities, how we manage the programs and contracts, and so forth. Then we went after manufacturing and engineering; how that whole group of support engineers communicates in the shop.

The last area we are going after is the manufacturing facility, so the process of actually building, the efficiency, the tooling and the training. We're about a third of the way into the program, there's a macro time line of about 15 months.

How are you taking the company to the "next level"?

The next chapter is about making sure we deliver on our promises. So if that's the quality, if it's the styling that you need to enhance the bus, if that's delivering on schedule, if that's price performance, to be able to compete for different types of customers and so forth, I think there's far more profitability and return for our shareholders by focusing on how we do things rather than focusing on ridiculous amounts of volume and ramming it through the same 'machine.'

Discuss the company's environmental efforts and vision for sustainability?

Two aspects, one is clearly green propulsion and green technologies. Those kinds of things are a bigger and bigger offering for our customers. We're dealing with public agencies that are under tremendous government pressure to reduce greenhouse emissions, so we will continue to invest and collaborate with suppliers, partners and customers on how to [implement] the latest fuel-efficient green technology.

The other side of sustainability is something that we really just launched, and that's the whole internal piece. How we operate our facilities, how much energy we use to run them, the recycling of material, looking for sources of material that comes from recycled resources and so forth. We just branded and launched a whole new sustainability campaign internally that is an all encompassing thing. The purpose of the campaign was to get people to understand that every time we do something, it has an impact.

You've been quoted as saying your job is to make the company safer, more efficient and a great workplace. Explain how you intend to do this.

At the end of the day, you really have three constituents; employees, customers and shareholders. If we don't have happy, safe, well-trained employees, we're not going to make great products for our customer, and if you don't have happy customers, no one is going to invest in our business, so we won't have shareholders. My view is you have to almost think of it as a pie with three equal parts; you have to keep all three of those things in balance for the long term...I want the team to make decisions based on balancing employees, customers and shareholders and, so, any one decision may be a little bit rated to one or another of those elements. But it's long-term sustainability that counts. Long-term profitability, long-term career and job satisfaction comes from taking that holistic approach.

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What would you say you are most focused on right now?

Unequivocally, it surrounds the whole company. I've been here about five months now, and I have had the benefit of meeting about 40 customers. I've also been involved with two of the major associations, I've gone to a couple of conferences and I've talked to about a dozen suppliers. The vast majority of my time is making sure that we've got the right methodology and the right resources deployed inside our company to really make the products deliver.

What would you say your company's biggest strength is?

I would say resilience. New Flyer's roots date back to 1930. The company has had some great times, some challenging years and some huge volume. We've got a culture of resiliency, of people finding a way to give back and make things happen...There's a lot of history here and a lot of people that really enjoy being a part of [the company]. I talked with customers who've operated New Flyers for many, many years; we're planning on being around to serve those customers in the future.

What is your biggest challenge as CEO/President?

I can tell you that it's the public company stuff. I was the COO of an aerospace company, which was privately held. The whole public company thing adds a tremendous amount of complexity and oversight into the job - a lot of communicating with investors and so forth. That's a challenge added to what you do all day long; build buses, work with employees and satisfy customers.

What keeps you awake at night with regard to the company?

I'd have to say the speed at which technology is changing our industry. I come from another industry altogether, and naively I thought a bus is a bus is a bus. The amount of technology that is now being embedded in a bus and the whole process of taking that technology and using the data constructively is a challenge. It takes real insight to make better management operating decisions. I think for our future, how do we embrace that technology, how do we be a part of that as opposed to just the builder of a box? You also think about transit authorities who have a certain skill set in technology around mechanical devices and having to change the way they think about maintenance, and life-cycle management and all these other things. I think that's something we're going to have to embrace.

What would you say is the bus industry's greatest challenge in the future?

It would be along the same lines of technology, but I'll add another element...let's be honest, transit is a subsidized industry...there's tremendous pressure on operating budgets and the lack of state budgets. They're either going to have to cut service, they're going to have to rethink the way they offer the service and they're going to have to get more efficient in how they operate. I think the opportunity for us as a bus builder is to try and work with those operators to figure out how to make them self-sufficient and make the life-cycle cost and not just the capital cost and the operating cost, cheaper for them.

What are your thoughts on the ARRA funding for transportation and what kind of impact do you see it having on business?

The impact so far has been minimal, as far as pointing to this order or that purchase with respect to being directly tied to stimulus funding. Having said that, we now have the very unique, maybe once-in-a-lifetime opportunity where the federal government will help transit rejuvenate states with capital money to match the FTA funding. I think we're seeing some flexibility where they'll be able to use some of those funds for operating costs, fleet rejuvenation, upgrades and so forth. I think it's going to have an effect, how big I don't know.

The FTA has been very helpful, in terms of trying to get operators to get their applications in...when we were visited by Vice President Biden and Secretary LaHood, the conversations that we were very privileged to have with them were on sustainability, which was as much about job retention as it was about job creation. The last thing we wanted to do was create a whole bunch of activity in a short window of time and have that burst or crumble. What we want to do with them is figure out how to make stimulus investment a longer term cycle. And, maybe make commitments that allow for investments over multiple years that see people work for a longer period of time.

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You spoke about the tremendous growth that the company is experiencing. What do you attribute it to, and do you see challenges to filling the orders?

No, I think our currently facilities are sized for the pipeline we have. Some extra stimulus orders may put some pressure on that, but for the most part, I think we're sized to serve the capacity that's right for us. The challenge for us over the next year, year-and-a-half, is far more around execution, efficiency and performance of execution than it is chasing another order, or trying to fill our slot.

What trends are you seeing in the industry?

It's hard for me to answer; I'm five months into the chair. I'll tell you the one thing that is a blessing, but also a curse; the level of customization of the buses. Each transit authority wanting different systems, different subsystems, seating, mirrors, cameras and so forth adds tremendous complexity to the build process and also our price because more than current engineering happens on a regular basis. So, the level of customization over the last couple of years continues to proliferate. At the end of the day, it's hard to argue with that; each transit authority has different needs, different types of issues in their community, and they want what's right for their operation. We understand that it would require that complexity.

You recently hosted U.S. Vice President Biden and the White House Middle Class Task Force. How meaningful was it hosting him and how did the meeting come about?

As I understand, Vice President Biden's task force for the middle class was looking for a representative community business industry in the States to talk about the need to make sure the middle class is at work and focused for the long term on careers.

They approached us for a number of reasons, one obviously because we are based in Minnesota; in the middle of America geographically, but also culturally. You have green technology that we are embedding in our buses; more than half of our buses built this year are either hybrids or compressed natural gas. And then, you have an industry getting stimulus that is focused on public transportation services, so we kind of met all those criteria.

The vice president's office contacted us to see if we were willing to host, and of course, absolutely! We've had tremendous support from the state of Minnesota. Our employees were really excited, of course they are proud of their facility and they're proud of their company. It was an absolute thrill to participate in. I was really taken aback by Vice President Biden and U.S. DOT Secretary LaHood.

Meeting them was a thrill, but the one-on-one time we had to talk about stimulus and about technology and job creation was fantastic, specifically, talking to Secretary LaHood about creating a legacy, creating infrastructure, eliminating congested cities, fuel efficiency and eliminating reliance on fossil fuels. Incidentally, Vice President Biden was a bus driver in college and he was really jazzed-up about the technologies that are in buses right now, which made it that much more special.

Tell me about some projects you are excited about.

We've just started the creation of a training institute here at New Flyer. There's a lot of training available in different [formats]; some we do internally, some we do with partners externally. What we have today is a framework for training and development, where you do it haphazardly or opportunistically. We've engaged a partner to help us scope out training and development. We're going to call it the New Flyer Training Institute and it will have elements of basic skills, professional skills training, like project management.

We'll also have leadership training and, obviously, technical training. We're really excited about creating and partnering with the educational institution to make that come true inside our business.

 I should also tell you that we've started looking at a whole technology road map, which will allow us to stay tuned and help manage the technology on the buses. We're more aggressive about investigating technologies rather than being responsive.

Can you comment on the hydrogen bus fleet that will debut at the 2010 Winter Olympics?

We are the prime contractor with BC Transit. The key partnerships we have are with ISE Corp., who is doing the systems integration, and Ballard Power Systems out of Vancouver. We just completed the cold weather testing in Ottawa in a cold weather chamber to test the systems. There's still work to be done, but the tests were very positive. The first production bus is now in the process of getting finalized, and then we'll head toward the final testing and commissioning process. All the buses need to be in Vancouver by December. A lot of people are focused on it and there's a tremendous amount of excitement to ensure we deliver for BC Transit.

What stands out in your mind of what your customers are asking for?

 My initial thought would be comments around technologies, fuel efficiencies or new propulsion systems, but when you sit around with the guys and gals I've had the opportunity to meet, at the end of the day what they really want is to build the bus with the specs they ask for-schedule compliance and adherence. And, what they really want is a quality build.

Looking back at your time at StandardAero and seeing that it was an MRO business, did you bring a new philosophy to New Flyer with regard to maintenance?

We build the bus and we deliver the bus to the customer ...I think there's more that we can do, and this goes back to our customers having to find a way to reduce their operating costs. I think there is an opportunity to think about the life cycle of the bus and not only deliver the best bus, but the best bus for life.

What is the company doing to set itself apart from other bus manufacturers, and how are you making the company more competitive?

New Flyer's got a great history; if you do the due diligence on where the company has come from, it is a very special company and has been introducing new technologies to transit. I think that's what we have to keep doing, is creating and embedding the new technology that is ours and others to keep us in front.         

 

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