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New Flyer: The poster child for stimulus Add to ...

In Manitoba, New Flyer Industries Inc. is a Canadian success story chaired by a well-known former politician. In Minnesota, where it is known as New Flyer of America, the bus maker is the pride of the U.S. government.

At the company's plant in St. Cloud, Minn., U.S. Vice-President Joe Biden, a defender of "Buy American" policies, hosted a town hall yesterday to take questions from people across the country about the government's recovery plan. New Flyer was held up as an American success story, a creator of jobs, and an example of a company that could benefit from the new funding for public transportation.

Less than 24 hours earlier, the Canadian government's export credit agency chose New Flyer as the first recipient of financing under its new powers to support Canadian companies and boost the flow of credit.

Export Development Canada (EDC) committed up to $40-million (U.S.) to the refinancing of New Flyer's $180-million loan facility, stepping in to fill a void that existed as a result of the credit crunch.

But "the grand slam of the week" was when U.S. President Barack Obama hopped on to a New Flyer bus in California yesterday, company chairman Brian Tobin said excitedly, roughly nine hours after Mr. Tobin boarded a plane in Winnipeg to head to St. Cloud.

New Flyer is being held up by governments on both sides of the border as a poster company for stimulus spending because it has many of the qualities that policy makers are looking for as they seek out projects that will spur growth.

It's expanding, hiring, innovative and green. Most of all, money that's put into the company will flow through to the economy quickly, criteria that economists say is key to making stimulus measures work. Otherwise, the massive stimulus plans that the G20 countries have adopted may stimulate economies after they've started to recover.

New Flyer fits the mould because it's bucking the pink slip trend, and investing in future-friendly, environmental technologies. "We're probably the healthiest vehicle manufacturer in North America today," said Mr. Tobin, who is a former federal industry minister and former premier of Newfoundland and Labrador.

"In 2008, New Flyer hired more than 90 people at its St. Cloud plant and has operated around the clock to fulfill a two-year backlog of orders," a press release from Mr. Biden's office said.

It's been a hectic week for Mr. Tobin and New Flyer's executives. On Wednesday, the company secured the commitments for its credit facility. EDC's participation "is exactly what our new domestic powers were intended to accomplish," said the Crown corporation's chief executive officer Eric Siegel. Ottawa has temporarily expanded EDC's mandate so that it can help Canadian companies that are having trouble accessing credit, even if the financing isn't directly tied to exports or trade.

Later Wednesday, New Flyer released its 2008 financial results, with profit of $87.6-million, compared with a loss of $130.7-million in 2007. But adjusted for one-time items, earnings from its bus manufacturing operations dropped, partly because the company was investing in its next-generation product and expanding a distribution centre in Kentucky.

Upon learning of Mr. Biden's decision to hold the town hall at the St. Cloud plant, the company delayed a conference call to discuss its results so that Mr. Tobin and New Flyer's new CEO, Paul Soubry, could fly to Minnesota for the event.

In its press release, Mr. Biden's office said the event was being held "at the New Flyer of America Bus Company in St. Cloud" because it's a leader in transit innovation and low-emission, alternative-fuelled vehicles.

The company's work force of roughly 2,300 people is spread across locations in both countries, largely concentrated in Winnipeg as well as St. Cloud and Crookston, Minn.

 
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