[TORONTO STAR] Orion losing TTC, one of its best customers [long]
Michael Seaton
Rocky road for a bus maker
Orion losing TTC, one of its best customers
By Gail Swainson
Toronto Star Metro Hall Bureau
Terrence E. Peabody Jr. is a most unhappy man.
Peabody is chief operating officer for Mississauga's Orion Bus
Industries, which builds buses for public transit authorities all
over North America, and he is under the gun. Really under the gun.
The Toronto Transit Commission, one of Orion's best customers, is
buying buses from another company, a move Orion officials fear
could eventually cost about $200 million in lost revenue.
Worse, TTC officials have been publicly airing a growing list of
beefs over a host of deficiencies in some of Orion's buses. A
frustrated Peabody fears all the bad ink will drive other
customers away.
"They're forcing us to defend our professional integrity," a
steamed Peabody said in an interview. "I really don't like that."
But TTC officials say they have had too many problems with
Peabody's buses to ignore. Furthermore, the public
has a right to know how their money is being spent, they say.
The litany of TTC complaints about the two-year-old Orion buses is
a long one - 91 shortcomings taking up more than three closely
typed pages in a staff report.
They include power-steering failures, dragging mufflers, premature
brake wear, malfunctioning wheelchair lifts, loosened roofs,
faulty air compressors and air conditioners, and loose seats.
Then in August, more trouble, after 50 buses were parked amid
fears their natural gas tanks would leak and cause fires.
In September, transit commissioners voted to spend $1 million to
lease a fleet of buses until new tanks can be installed.
Despite authorization from the provincial Technical Standards and
Safety Authority to put the buses back into service, TTC chief
general manager David Gunn said he isn't willing to play fast and
loose with public safety.
----------------------------
`In a word, no, this number of
complaints is not normal'
----------------------------
He insisted the buses would not go back on the road until he had a
"definitive statement that they were safe," something he says he
has not been able to get.
Orion officials are absolutely fuming over Gunn's refusal to play
along with the provincial safety agency's ruling.
They accuse Metro's transit boss of exaggerating the problems so
the TTC can buy a type of stainless steel bus that Gunn prefers,
manufactured by an American firm in New Mexico.
Gunn just rolled his eyes in disbelief.
"Believe me, it's just been a constant dispute with them, one
thing after another," he said. "And you know who's paying for all
this? The taxpayer. That's who's getting it in the neck."
Gunn said the TTC had to do its own repairs because Orion was not
responding to warranty repair requests in a timely fashion. This
meant TTC garages were behind on their own maintenance work. "It
was costing us a lot of grief," he said.
Orion also delivered buses that had a potential problem in the
power-steering mechanism and failed to give warning of the
difficulties, Gunn said.
"In this business when you have a safety problem, it's up to the
manufacturer to tell us. The stuff we made public are safety items,
and you bet the public has a right to know,'' he said.
Gunn said the number of problems is highly unusual, a claim Orion
officials dispute.
"In a word, no, this number of complaints is not normal," Gunn
said. "I've never seen a roof come off a bus before in the first
year of service."
He's mystified by Orion's reluctance to make repairs quickly,
something the bus company officials categorically deny.
Peabody calls the deficiencies normal wear and tear, pledging that
Orion will make good on the warranty work.
"I admit we've had some teething problems, but I'm sure we're over
them," Peabody said in an interview at Orion's gleaming new $11
million plant in Mississauga. "We have a very good product."
Relations between Orion and the TTC recently went from bad to
worse when the TTC was hit with a $25.5 million lawsuit as part of
a long-simmering dispute over 50 natural gas-powered buses Orion
is building for the agency.
TTC officials were withholding part of a $10 million payment in
retaliation for deficiencies on the other buses.
So Orion officials threatened to sell the 50 buses to New York
City.
In an effort to settle one aspect of the complex dispute, TTC
officials recently sent Orion an $8.2 million cheque, but Orion
said the lawsuit is still outstanding because TTC officials
badmouthed their buses to New York transit officials.
And recently, commissioners voted to purchase 50 stainless steel
lift-equipped buses from the American-based Nova Bus Corp. and an
additional 50 tubular steel, low-floor buses from western-Canada
based New Flyer at a total cost of $42.3 million.
Gunn says Nova's New Mexico-built buses are structurally superior
to the tubular steel buses built by Orion and have an 18-year
warranty on the frame, almost three times Orion's seven-year
warranty.
Orion director Lou Parsons sneers that "not one bolt" of the Nova
buses is torqued by an Ontario worker.
Parsons said the TTC is "morally obligated" to purchase buses that
are locally made.
But not even Orion's buses are all-Canadian. The frames are
assembled in Canada and the remaining 60 per cent of the bus - the
engine, power train, transmission, axles, windows and seats - are
assembled at the firm's New York state plant.
Doing business with Orion is a $110 million legacy the province's
former NDP government left the TTC when it forced Metro's publicly
owned transit system to buy buses to prop up the ailing
Mississauga manufacturer, which the province bought for just $1 in
1993.
But the province wanted to unload the financially troubled firm.
So less than 24 hours before the 1995 election that swept the NDP
out of power, then-economic development minister Frances Lankin
turned the remains of what was then called Ontario Bus Industries
over to Western Star Truck Holdings Ltd., a British Columbia truck
manufacturer.
But the province had decreed that as a condition of receiving a 75
per cent subsidy on the cost of bus purchases, public transit
authorities, including the TTC, had to buy from Ontario Bus
Industries.
Last year, the TTC was given an exemption from the province to
purchase buses from another manufacturer.
However, earlier this month, then-transportation minister Al
Palladini said he wanted assurances from the TTC that buying the
stainless steel lift-equipped buses from Nova would not affect the
disabled, who prefer low-floor models like those built by Orion
and New Flyer.
Gunn said the TTC is urgently in need of buses right now and that
the Nova buses are his preferred choice.
Peabody, a transplanted Australian with a perpetually worried
look, seems exasperated when recalling the problems he has had
with TTC management.
Peabody is especially angered that the TTC withheld the $10
million payment, which forced him, he says, to threaten the sale
to New York city unless the money was paid immediately.
"As a customer, we would love to deal with the TTC, but we can't
if they're not going to pay. It's a showstopper," he said,
agitatedly popping up and down in a chair in Parsons' office.
-----------------------------------
`I think this company would be better
off not dealing with the TTC'
-----------------------------------
Parsons said Orion, which builds about 1,000 buses a year and has
550 employees, has dozens of satisfied customers stretching from
Washington, D.C. to New York.
The only customer who has given Orion any serious trouble is the
TTC, Parsons said.
Peabody added: "They're not our customer any longer. I think this
company would be better off not dealing with the TTC."
"We ordered 60 1992 Orion buses and we are satisfied with the
order," said Cheryl Johnson, a spokesperson for Washington's Metro
Area Transit Authority. She would not elaborate.
A spokesperson for New York's transit authority refused comment.
Orion officials also are worried their customers will wonder why
the TTC refuses to buy from a manufacturer parked right in its own
backyard.
"Our reputation in the U.S. is on the line," Parsons said. "If we
lose the TTC business, the first thing they will say is, `How come
you can't sell buses in your own hometown?'"
Contents copyright © 1996, 1997, The Toronto Star.
Michael D. Porter
Colin R. Leech wrote:
>
> > Worse, TTC officials have been publicly airing a growing list of
> > beefs over a host of deficiencies in some of Orion's buses. A
> > frustrated Peabody fears all the bad ink will drive other
> > customers away.
>
I hear that most of the buses in question have been parked... partially
due to an impending lawsuit. True?
> > And recently, commissioners voted to purchase 50 stainless steel
> > lift-equipped buses from the American-based Nova Bus Corp.
>
> Nova's parent is Canadian, but AFAIK these are the American RTS model
> rather than the Canadian models.
This is quite true. What I find interesting is an article from the
Toronto Star perhaps two or three weeks ago, which (intentionally or
accidentally) confused some older TTC buses equipped with old platform
wheelchair lifts with those to be ordered from Nova BUS, which are
Lift-U IIs. There was some suggestion in the report that a Toronto-area
disabilities group were grumbling about the TTC ordering buses with the
older Lift-U design. Any articles in the meantime clarifying that issue?
> > Orion director Lou Parsons sneers that "not one bolt" of the Nova
> > buses is torqued by an Ontario worker.
>
> So?
Orion has stooped to similar tactics in the American market in support
of its American subsidiary, BIA.
> > Parsons said the TTC is "morally obligated" to purchase buses that
> > are locally made.
>
> No, the TTC has an obligation to spend the money of its taxpayers wisely.
> Why should they pay more for an inferior product?
Well, I wouldn't dare say in this forum that the Orion is an inferior
product (after all, they continue to sell to many authorities, some of
which, admittedly, adhere to low-bid, rather than negotiated,
contracts), but they do seem less inclined to resolve outstanding
service problems than other manufacturers.
> > Last year, the TTC was given an exemption from the province to
> > purchase buses from another manufacturer.
>
> Another perk to the TTC that the rest of the province didn't get ...
>
> > Peabody added: "They're not our customer any longer. I think this
> > company would be better off not dealing with the TTC."
My guess that anyone saying this to the local Toronto press is probably
guaranteeing that they will never sell to TTC again.... Any manufacturer
these days willing to burn bridges had better resign themselves to much
harder times ten years from now. Has Western Star had any comment on the
proceedings?
> > "Our reputation in the U.S. is on the line," Parsons said. "If we
> > lose the TTC business, the first thing they will say is, `How come
> > you can't sell buses in your own hometown?'"
> >...
> > A spokesperson for New York's transit authority refused comment.
New York would not be inclined to comment on a domestic Canadian
squabble, but they also would not be inclined to mention that warranty
meetings with Orion regarding their own purchases are quite
interesting....
Cheers.
--
My other Triumph runs, but....
Chris Farrar
stephen allcroft wrote:
> > No, the TTC has an obligation to spend the money of its taxpayers wisely.
> > Why should they pay more for an inferior product?
> Because it provides employment for the local taxpayers; this was a common
> argument used by british municipal operators in, for example, Birmingham
However, Orion's plant isn't in Toronto, so "local" taxpayers would be
few. As well, the battle between 416 and 905 (phone area codes, Toronto
is 416, the suburbs around it are in 905) residents regarding
subsidizing each other are enough to make Toronto politicians (and TTC
managers) not want to share the cash with the 905 crowd.
--
Chris Farrar | cfa...@sympatico.ca | Amateur Radio, a
VE3CFX | fax +1-905-457-8236 | national resource
PGPkey Fingerprint = 3B 64 28 7A 8C F8 4E 71 AE E8 85 31 35 B9 44 B2
E. McDermott
ag...@FreeNet.Carleton.CA (Colin R. Leech) wrote:
>stephen allcroft (ste...@congress.demon.carrot.uk) wrote:
>> ag...@FreeNet.Carleton.CA "Colin R. Leech" writes:
>>
>>> > Parsons said the TTC is "morally obligated" to purchase buses that
>>> > are locally made.
>>>
>>> No, the TTC has an obligation to spend the money of its taxpayers wisely.
>>> Why should they pay more for an inferior product?
>>
>> Because it provides employment for the local taxpayers;
>If governments wish to pursue such policies, that's fine. However, such
>mandates should not be forced onto others (such as transit agencies)
>unless the financial resources are put into place to accommodate such
>policies. The TTC is not responsible for providing jobs to the Toronto
>workforce.
If you really want to pursue this issue, please review the comparison
between Toronto and Vancouver in the cost of wheel chair service.
Vancouver couldn't afford the Orion, so they outfitte normal vans with
lifts.
Cost? About a quarter of teh Orion. Furthermore those van could be
serviced in any gast station.
W5 gave the entire story last year.
removed the * at the start of my ID, if you want to send me mail. Since I started do this two weeks ago, I haven't received one offer to make me rich in 90 days.