Winnipeg Is Making Main Native Transit Bus Agency New Flyer Extra Seemingly To Fail

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I’ve lots of sympathy for Winnipeg. I’ve been there for work many instances. I’ve been there of their frigid, tens of levels Celsius under zero winters. I’ve been there of their dusty summers. I’ve even tried to get throughout the principle intersection that pedestrians nonetheless aren’t allowed to cross at floor degree. I do know individuals who stay there who I respect lots. I even know individuals who stay there after they’ve retired with ample affluence to stay elsewhere. It’s not a straightforward place to stay, being within the geographical heart of North America, but being a comparatively slowly rising metropolis nonetheless far beneath one million inhabitants and having the well-deserved sobriquet Winterpeg.

Which is a part of why it’s unhappy for me that Winnipeg is complicit within the seemingly chapter of one of many area’s largest employers, New Flyer, North America’s largest bus producer. I’ve written about New Flyer’s strategic blunder just lately, the place it’s leaning into the seduction of upper particular person unit revenues for hydrogen gasoline cell buses paid 50% by the federal authorities’s Zero Emission Transit Fund.

The lure is that each hydrogen gasoline cell car cell bus they promote loses them within the vary of three gross sales of battery-electric buses to rivals, particularly Chinese language ones. Which means that they’re dropping market share steadily in an unforced error.

Why are they selecting this personal objective? As a result of as famous, it’s seductive. They get more cash for every hydrogen electrical bus than for each battery-electric bus, and so they get much more for his or her battery-electric buses than for his or her diesel buses. Additional, Canada paying 50% for the hydrogen buses makes the sticker shock a lot simpler for transit companies in Canada.

However there’s one other issue I hadn’t realized once I revealed on their strategic blunder: they’re the one hydrogen bus producer in Canada. That implies that each transit company in Canada silly sufficient to purchase the useless finish know-how is required to sole supply it from New Flyer. That monopoly in the marketplace implies that they will jack up the costs even additional than is warranted for a product which is far more pricey to purchase, far more pricey to function, far more pricey to keep up and far much less dependable than diesel or battery-electric buses. As I stated, seductive.

Why are they dropping three battery-electric bus gross sales for each hydrogen bus sale? Just a few causes. The primary is that they’re sucking price range that may very well be utilized over extra battery-electric buses into the useless finish of dearer hydrogen buses. The second is that that as a result of they aren’t specializing in the actual long run answer, battery-electric buses, their battery-electric buses are inferior to rivals, particularly Chinese language ones, whereas additionally being dearer. How costly? How does one million Canadian per inferior battery-electric bus sound? The third is that they’re creating severely sad clients within the transit companies that they promote to. Whenever you dissatisfy your purchasers with an costly, inferior product and there are cheaper, higher options in the marketplace, it doesn’t matter how used to you they’re, they will purchase different buses in the long run.

That is all extremely apparent, so why isn’t New Flyer figuring this out? Effectively, it’s as a result of they’re determined. They nearly went bankrupt a few years in the past, partly attributable to COVID and certain partly attributable to Uber’s impression on bus transit within the USA and Canada, and solely $200 million in governmental loans and credit bailed them out. In the meantime, BYD has established a manufacturing facility in California and is profitable orders of a whole bunch of battery-electric buses as a result of its automobiles are cheaper and higher. Existential dread makes individuals and corporations do silly issues, and one of many silly issues for New Flyer is hydrogen gasoline cell buses.

I did say one different factor, didn’t I? The opposite factor is their seat on Board of Administrators of the Canadian City Transit Analysis and Innovation Consortium (CUTRIC). That’s going to chew them due to the unbelievable conflicts of curiosity CUTRIC is enmeshed in, apparently completely deliberately and with none strategic perception. I revealed on this just lately, and I’ll summarize it right here.

• Canada’s Zero Emissions Transit Fund (ZETF) permits grey hydrogen gasoline buses with roughly the greenhouse fuel emissions effectively to wheel of diesel buses, together with pure fuel and hydrogen leakage.
• The ZETF has made CUTRIC the only real group that transit companies can rent to do bus decarbonization research and in addition obtain 80% of the price of the examine from ZETF. Sole sourcing level one.
• CUTRIC’s Board has three corporations which get much more cash if hydrogen buses are chosen, Enbridge with its plans of hydrogen economic system dominance (in addition to its sister members of CUTRIC, Fortis BC and Fortis Alberta), Ballard Energy with its gasoline cells, and New Flyer with its sole-sourced, costly hydrogen buses. Sole sourcing level two.
• CUTRIC creates extremely flawed research just like the one for Brampton that’s off by about $1.5 billion on a $9 billion value workup, which erroneously discover that numerous hydrogen buses are required in transit fleets.
• Transit companies, constrained by this setup, largely have to make use of CUTRIC to do research as a result of organizations that might do good research like Stantec, WSP, or Dunsky can’t compete with 80% reductions. CUTRIC in the meantime, is charging about double the going price for the research it does, and delivering deeply biased, low-quality outcomes that wouldn’t get via high quality management in actual engineering and consulting corporations.
• Transit companies, constrained by this setup, find yourself having to get hydrogen fleets, spending doubtlessly billions of {dollars} on dearer hydrogen buses, dearer hydrogen refueling programs and dearer vitality within the type of hydrogen.
• And the purpose of all this, decarbonizing bus fleets, isn’t achieved to just about the identical extent as battery-electric as a result of grey hydrogen finally ends up getting used.

You’ll notice that the one organizations which aren’t losers on this are the pure fuel transmitters and distributors Enbridge and Fortis, and Ballard Energy. The primary group can’t lose as a result of they perpetuate pushing molecules for vitality with governmental cash and so they defer actual local weather motion.

Ballard can’t lose as a result of its enterprise mannequin is dropping cash for its buyers, having executed so yearly since 2000, a median of $55 million every year and $1.3 billion in complete. Ballard doesn’t care that this can be a useless finish, riddled with conflicts of curiosity, failure of governance, and thermodynamics. That’s a plus for it.

However New Flyer can lose. It really has a useful function sooner or later. It delivers, warranties, and offers components for buses which presumably a whole bunch of thousands and thousands of individuals use yearly throughout North America. It may keep its market share management just by committing to and specializing in battery-electric buses.

As a substitute, it’s following within the footsteps of Quantron. Who’s that, you ask? It’s a now-bankrupt European producer of battery-electric and hydrogen vans of assorted sizes. It didn’t give attention to battery-electric, and in consequence its battery-electric vans, like New Flyer’s buses, had been inferior, with solely 250 km vary in comparison with Daimler’s equal merchandise with 400 km vary, and dearer as effectively, €80,000 vs €60,000, including insult to harm. To get 400 km of vary from a Quantron van, you had to purchase an much more costly gasoline cell car, as soon as once more with governmental subsidies.

IKEA Austria purchased this story. They’d lots of low vary Quantron supply vans. They acquired lots of governmental cash to purchase hydrogen refueling services and Quantron gasoline cell automobiles. Now Quantron is bankrupt. IKEA’s complete battery-electric and gasoline cell fleet has no warranties, no OEM help, no upkeep contracts, and no components provider.

On this story, Quantron is New Flyer and transit companies in North America are IKEA.

So how is Winnipeg complicit in all of this? Effectively, it’s an much more a captive marketplace for New Flyer than the remainder of Canada and the USA as a result of it’s the native agency. There’s no method to purchase something besides New Flyer buses. There’s an in depth — very, very shut — relationship between New Flyer, Winnipeg’s politicians and Winnipeg’s transit group.

It’s so shut, in reality, that Winnipeg didn’t trouble to get CUTRIC with its large 80% ZETF subsidy to do its fleet decarbonization examine. One assumes that the individuals main Winnipeg’s transit group merely requested New Flyer what they need to do, and it instructed them to purchase equal numbers of battery-electric and gasoline cell buses to begin. Now, per council minutes, the gasoline cell buses have been perpetually late, the hydrogen refueling system has been perpetually late, the necessities for security for placing gasoline cell buses inside depots have contributed to $105 million, 50%, value overruns on the depot overhaul, and it’s impacting supply and high quality of really helpful battery-electric buses from New Flyer as effectively.

Winnipeg has utilized for and obtained ZETF approval to purchase New Flyer hydrogen buses that are an enormous a part of New Flyer’s present fiscal, high quality, and supply issues. Winnipeg is actively taking part in New Flyer’s failure.

If Winnipeg’s council had been sensible, they might do the next. They’d attain out to different main New Flyer transit clients in Canada. They’d get all of them on a Zoom name. They’d stare one another within the eyes and agree to not give New Flyer more cash for inferior merchandise. They’d comply with collectively meet with New Flyer’s Board of Administrators and make it clear that they wouldn’t help any extra waste of time or cash on hydrogen buses, and that New Flyer must give attention to battery-electric buses solely. If not, they might shift all of their decarbonized bus orders to the a number of battery-electric solely bus suppliers.

For the following level, Winnipeg can’t be this sensible, however different transit companies in Canada needs to be. They need to band collectively, work with Doug Ford’s administration and invite BYD or Yutong to arrange a battery-electric bus manufacturing facility in Ontario. Winnipeg can’t do that as a result of they might be creating competitors for New Flyer, and that’s politically non-viable, however not one of the different cities and transit companies have New Flyer as a significant native agency.

Winnipeg’s transit management will learn this, I’m 95% positive, just because my collection on CUTRIC, per suggestions from lots of Canadian transit professionals, is making the rounds. A dialog with a Canadian fleet decarbonization skilled at the moment made it clear that the nationwide CUTA transit convention this week included lots of dialogue of the collection, and that lots of CUTRIC’s members had been taking my recommendation and exiting the group.

However that doesn’t imply that Winnipeg’s leaders will internalize and act upon it. They may, as a substitute, flip to their buddies at New Flyer, who will guarantee them that I’m a gadfly, a no one, and incorrect. They usually’ll consider them. In any case, they’re a good, shut knit, cozy group of politicians, bureaucrats, transit executives, and manufacturing executives within the geographic heart of North America. Who am I?

Merely a coastal elite who has assessed each main type of transportation decarbonization, revealed a number of repowering curves via 2100, advises international funding funds and firms on decarbonization methods, and somebody who will get paid some huge cash to talk for an hour on the topic, even over Zoom, by no means thoughts what I cost for displaying up in particular person.

Oh, additionally somebody who loves transit, cares for it, needs it to succeed, and who has used transit on the 4 continents the place he has lived and labored.

Transit issues. I’m a Canadian who has lived, labored, and performed in way more of Canada than most individuals, partly as a result of I’m a Canadian navy brat and partly as a result of I had a significant technological transformation architect, program supervisor, and management function with a giant tech consultancy for years. I’ve run to catch buses, I checked a bus schedule and caught a bus most just lately three days in the past, and I rejoiced once I may faucet my Apple watch to pay on transit in Vancouver, Toronto, and Montreal.

The strategic recommendation I’m offering to Canada’s authorities, Canadian municipalities, CUTRIC, and New Flyer totally free, international corporations and funds pay me some huge cash for yearly. It’s presumably a strategic mistake to provide it away totally free, however my motives are to speed up decarbonization of transit in Canada whereas enhancing ridership reliability and expertise high quality. Proper now, I’m seeing many indicators that I’m driving the dialog in a constructive route.

My collection is a professional bono give-back to the nation and cities I really like. Vancouver and Toronto are my residence cities, having moved to every of them twice. I’ve lived and labored in each different main Canadian metropolis, wandering round them for hours at a time and having fun with their distinctive city flavors. I’ve executed the identical with dozens of worldwide cities, most just lately Brussels, the place I spoke about European competitiveness with China and the USA on stage with a European member of parliament and the vitality minister of a European nation.

Transit issues. Canadian transit is heading down a fork within the path that results in failure, no local weather wins, and misplaced cash. With luck, I’m positioned to nudge Canadian transit companies and corporations again on observe. If not, Canada will throw billions down a hydrogen cash pit, Canadian transit companies will frustrate their riders with unhealthy service, Canadian municipalities will waste lots of their very own effort and tax income, and New Flyer will dissolve into receivership. It’s value my professional bono efforts to keep away from this. I’m joyful to let my worldwide purchasers fund my makes an attempt to forestall Canada happening the incorrect path.