School Bus Transportation News at STN Media

Collins CEO Discusses Industry Trends

Donald Lynn Collins is President and CEO of Collins Industries. In addition to being North America's largest manufacturer of small, Type-A school buses, Collins Industries is also the world's largest manufacturer of ambulances, the nation's second largest manufacturer of terminal trucks, and the leader in the combined road construction sweeper and industrial sweeper markets. Since 1971, Collins Industries has grown to more than 1,000 employees in six plants comprising over 1 million combined square feet of manufacturing space in Kansas, Florida, Ohio, Oklahoma, and Texas.

School Transportation News: In your view what are some of the important challenges facing the school bus industry in 2006?

Don Collins: One of the greatest challenges is that school district budgets are still under pressure. Most states continue to have difficulty figuring out the right distribution formula for funding school districts. For example, in Texas , they have a Robin Hood situation where some school districts have a greater local tax base than other, lower social economic school districts or districts with declining population. They're having a difficult time equalizing funding since property taxes are a significant part of the way districts are funded.

On the economic front we have had commodity price increases in steel and specialty medals with the majority of those increases 12-18 months ago. We've passed some of those costs on to customers but not all of them. That has certainly put more pressure on the cost of new vehicles. Recently we've seen steel prices begin to moderate. Overall, in all of the major commodity areas, we've seen prices begin to stabilize and moderate.

STN: Is your company experiencing any difficulty receiving chassis from either Ford or GM/Chev?

Don Collins: We have not had any difficulties in the past or at this time. The reason is that the chassis we utilize for our Type A school buses are a very small part of all chassis manufactured by Ford or GM.

STN: Collins describes its markets for small buses as school bus, child care bus, activity bus and church bus. Can you give me an idea of what percent of your sales each of these represent?

Don Collins: We don't disclose percentages. Overall we can say the yellow school bus market has been in a decline over the last several years, and has bottomed out. We're starting to see the yellow school bus product rebound in '06. I think it's due basically to fleet replacement. Regarding the white bus or activity bus products, we continue to see increases in activity primarily because we still are converting the nation's fleet from vans to certified school activity buses. I think that will go on for sometime. And then we will go into replacement cycle in about five to six years. I think you could put the child care and church bus in the same class as the activity buses.

STN: From what you've seen, what has been the effect of the decision by Guide One Insurance to no longer provide coverage to clients operating large passenger vans? Has this resulted in a measurable increase in the sale of school buses or multifunction school activity buses to churches and non-profits?

Don Collins: I think what we should do is look at the compilation of measures and standards that have been established. It is very difficult to dissect what effect the legislation of passing laws vs. insurance companies raising premiums for liability purposes has on these issues. But if you take all of these together, the federal and state mandates as well as the risk management issues for liability, (insurance) is definitely having a significant impact on the number of activity buses vs. 15 passenger vans that are being utilized. There is no doubt in anyone's mind that certified school buses offer the safest form of transportation. I think people are surprised at how little (additional) money it takes to buy a certified school bus. But the fact is for a little bit more money, you have a measurable increase in the safety of the children being transported. I don't know why anybody wouldn't want to transport students in a school bus vs. a van anyway.

The general public sees students being transported, but they don't inherently understand the differences between a 15-passenger van and the safety factors of a certified school bus. We need to make sure the general public is educated about this issue.

STN: How is the market reacting to the new DuraStraint 3-point Harness Seat that Collins and Midbus began offering at last fall's NAPT trade show?

Don Collins: This is an interesting issue for us. We knew that this was going to be the future of school bus seating. Initially I could see that school bus seats, especially the child restraint seat as well as the 3-point harness seat, was going to come about. We saw that movement in legislative realms. We got busy very early, and that's the reason we have these seats available today. We did quite a bit of research and testing to develop the DuraStraint system. The system encompasses a child restraint seat, a 3-point harness seat, and a 3-point harness seat with the built in child restraint seat. Those are the three products in the system.

The product is being received very well. We have somewhat of an advantage over other seat manufacturers in that the dimensions of our seat are the same as a standard school bus seat. That's really helpful when contractors or school districts are, for example, doing retrofits to change the seating requirements or floor plan for the seating in their buses; they can do that with our seats without changing the area and space they're utilizing. Of course, retrofitting is by customer preference. It's done through our distributor network because our company does not do retrofits. Obviously, a seat pull test is required to establish the appropriate installation of seats. We also see more vehicles now used in Head Start and child care application.

STN: Collins Bus is now ISO 9001 certified. Is Midbus ISO certified? What benefits has the ISO certification brought to your company?

Don Collins: Collins is ISO 9001 certified. MidBus will be later in '06, and we are in that process right now. The main benefit that ISO 9001 brings us is that we get consistency of product in a measurable way. It increases the quality of the product and increases plant efficiency. Most of all it ensures that every unit that we put on the street conforms to the design and engineering standards we set out to build that vehicle with.

STN: In addition to school buses your company manufactures ambulances and terminal trucks. How are those business fairing in today's economic climate?

Don Collins : The ambulance business is increasing due to the nation's fleet replacement cycle that is now underway, so the ambulance business is in very good shape. In fact we are world's largest producer of ambulances. In the terminal truck business, we supply ports in China , Taiwan , Korea , and Malaysia as well as here in the United States . Plus we are the largest small school bus manufacturer and possess the largest dealer network.

STN: Thank you.