Blue Bird Restructures Financially

FORT VALLEY, Ga. - A senior Blue Bird spokesman said employees were slowly but surely returning to work after a more than two-week layoff while the company restructured under a 32-hour bankruptcy proceeding, which another company representative said was the shortest in U.S. history.

"We don't have our production employees back to work yet; we're working with our supplier base to get the product back into the facilities," said Mike McCurdy, director of human resources, on Jan. 31. "If I had my druthers I'd rather have them back today."

All employees were expected back by mid-February.

Jeffry Bust, Blue Bird president and CEO, said the restructuring was necessary to de-leverage the company's balance sheet and to provide additional liquidity. The school bus OEM received an infusion of cash on Jan. 27 to pay all general unsecured creditors at 100 percent.

"While Blue Bird unit deliveries have been flat to slightly down since 2003, our sales dollars have risen 27 percent because our Blue Bird 'Vision' has essentially replaced all other conventional products previously mounted on other manufacturer's chassis," Bust said. "The dollar value of a Blue Bird Vision is much higher per bus and thus sales in dollars have grown rapidly. Our balance sheet must be strong enough to sustain this growth."

He added that two miscalculations were made last year regarding the effect of increased steel costs on production and the under-pricing of the company's optional packages that were introduced in late 2004.

Despite the temporary layoff of approximately 1,800 employees at the company's two plants in Georgia and one in Brantford, Ontario, McCurdy added that the company ensured all employees would continue to receive benefits during the work stoppage. The company otherwise said it is continuing normal operations.

"Customers can rest assured the 'Bird' is still flying, said Tony Kerwin at the company's Brantford , Ontario plant, which manufacturers all Type A Micro Bird applications. Production also halted at Fort Valley, Ga., the company's headquarters and the manufacturing location for the Blue Bird All-American front- and rear-facing engine applications, as well as Lafayette, Ga., which manufactures the Type C Vision.

Both he and McCurdy added that production was already ramping up. There remained no definitive information as to how the stoppage might affect Blue Bird's annual school bus production numbers other than the company would add to its near-future schedule. McCurdy added that several previously scheduled slow production periods in February and March in production would be eliminated altogether.